Sales Tax Instructions

Sales Tax Instructions, 2009
companies etc; who are otherwise, authorized to deduct advance tax under section 50(4)
of the Income Tax Ordinance, 1979.
2. All persons liable to be registered as manufacturers producers
wholesalers, dealers, distributors, suppliers, importers or retailers are therefore, well
advised to get themselves registered under the Sales Tax Act, 1990 so as to benefit from
the said fiscal monetary and trade advantages.
3. However it appears that there are certain apprehensions in the minds of
taxpayers that the turnover of the persons registered with sales tax department shall be
used for income tax assessments. These apprehensions are not correct. Attention in this
regard is invited to clause (24) of part IV of the Second Schedule to the Income Tax
Ordinance, 1979 which reads as follows:-
that: -
"(24) the provisions of sections 56,65 or 66-A shall not apply to a registered
person under the Sales Tax Act, 1990 deriving income under the head "business
or profession" in respect of an assessment prior to 1999-2000 on account of
suppression or non-declaration of sales detected on the basis of sales tax returns
filed by such persons‖.
4. CBR‘s Income Tax Circular No 10 of 1996 dated 16.07.1996 explains
"Through the insertion of this new clause (i.e. clause 24 cited above) immunity
has been given from re-opening of income tax assessments prior to the year 1999
–2000 to such sales tax payers who declare their correct sales in sales tax returns.
The income tax assessments would therefore not be re-opened for the said year
on account of suppression or non-declaration of sales declared on the basis of
sales tax returns filed by such persons"
5. The aforesaid legal provision and ensuing benefits, privileges and
immunities make it un-ambiguously clear that the advantage of sales tax compliance and
sales tax registration far outweigh the irresponsible campaigns misapprehensions and
misconception against it. All traders businessmen manufacturers, producers, wholesalers,
dealers, distributors, importers, suppliers and retailer of sales taxable goods are
accordingly advised in their own interest to get themselves registered under the Sales Tax
Act, 1990. Non–registration besides creating ineligibility from income tax immunity as
aforesaid would also render the offenders liable to legal actions and added burden of sales
tax by way of additional tax further tax and penalties which are mandatory under the
Sales Tax Act, 1990.
6. The Sales Tax Collectorates, F.P.C.C&I, Chambers of Commerce &
industry, EPB, Trade & Industry, Associations and Groups are also requested to inform
all concerned about the benefits, privileges and advantages of registration and compliance
of sales tax law and procedures made thereunder.
[Rescinded vide STGO No.3 of 2004 dated 12 th June, 2004]
[Issued by the CBR, Islamabad under the signature of Mr. Mumtaz Haider Rizvi, Chief
(Sales Tax).]
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