Sales Tax Instructions

Sales Tax Instructions, 2009
was received or the supply made which ever was earlier. There is no difficulty in holding that in
such a case, the amount of consideration received in advance shall be deemed to be the price on
that date of the proportionate quantity of cement and the sales tax should be deposited before 20 th
of succeeding month in the Government treasury instead of the date of delivery of the goods at the
subsequent stage. In other words, we in order to put the matter beyond any ambiguity, have no
hesitation in holding that in such a situation, the date of receipt of amount of consideration in
advance can well be constructed to be the date of sale for the purpose of payment of sales tax.
19. Learned counsel for the respondents-manufacturers submitted that in case
subsequently on the date of supply of the cement, there is variation in the price of the goods or
transaction is cancelled, the right and interest of the manufacturers should be protected.
20. Learned counsel for the appellants however, submitted that there would be no
inconvenience or difficulty in such a situation. He has filed a statement duly signed by Mr.
Muhammad Wali Khan Member (Sales Tax) which is reproduced below:
―CBR understands that an advance in full or part payment received shall be treated as a
supply in terms of section 2(24) to the extent of quality of goods based on the value
prevailing on the date of receipt of the advance / part payment.
The invoice under section 23 shall be issued at the time of receipt of the advance payment
to the extent of the value / quantity f goods, covered by the said advance. The delivery of
said goods may be given at any subsequent time. However, in case of a subsequent
change in the value of goods or a change in rate of tax at the time of the actual delivery,
the increase component of tax or value shall be accounted for by way of a debit / credit
note and sales tax on the changed component only shall be paid with the sales tax return
for that tax period.
In the case the goods being supplied are not divisible (e.g. a car) then the advance
payment received shall be treated as a complete supply to the extent of the payment and
an invoice shall be issued accordingly, showing that it is a part payment. At the time of
receipt of the remaining amount / delivery of goods, the same shall be treated as a
separate supply and invoice will be issued covering the remaining payment.‖
21. In our view, it is complete answer to the argument advanced by the learned
counsel for the manufacturer. In our view, there is no such difficulty in adopting the construction
of the relevant provisions as to date of sale of goods for the purpose of payment of sales tax.
22. For what has been discussed and held before, the interpretation made by the
Lahore High Court is not sustainable.
23. We have been informed that the sales tax in full has been paid along with return
and deposited by the respondents-manufacturers but the same having not been paid within the tax
periods, the next question which arises is whether they were liable to pay additional tax by way of
penalty under section 34 of the Act.
24. Learned counsel for the appellants submitted that under the said provisions of
the Act, additional tax is liable to be paid and there is no provisions wherein the authorities could
waive the same.