Sales Tax Instructions

Sales Tax Instructions, 2009
(a) of sub-section (46) of section 2 of the Act. This will remove all
doubts and ambiguities in this regard.
(2) Further Tax.—The rate of ―further tax‖ leviable on the taxable supplies
made to persons other than registered persons has been enhanced from
1% to 3% through an amendment in sub-section (1A) of section 3 of the
Act.
(3) The levy of further tax @ 3% will be applicable on the supplies of goods
chargeable to sales tax on the basis of ―value‖ under sub-section (1) of
section 3, on the basis of their ―retail price‖ under sub-section (2) of
section 3 read with Third Schedule or fixed tax chargeable under subsections
(4) and (5) of section 3.
(4) Extra Amount of Tax.—A new sub-section (5) has been added to section
3 authorizing the Federal Government to levy extra amount of tax (not
exceeding 15%) in addition to the standard rate of 15% and also in
additional to the 3% further tax (where leviable). The first notification
under this sub-section (5) has already been issued by the CBR, Islamabad
under SRO 795(I)/99 dated 30.06.1999, which levies extra amount of
sales tax at 5% on plastic products of the PCT Headings specified
therein. This extra amount of tax is not adjustable and should be
collected from 01.07.1999.
(5) Turnover Tax. – The scope, mode and manner of Turnover Tax has been
modified by substituting section 3A and also by notifying the Turnover
Tax Rules, 1999 under SRO804(I)/99 dated 01.07.1999:-
(i) to include producers and manufacturers and retailers, as well;
(ii) the manufacturers or producers having annual turnover from
Rs.0.5 million to Rs.2.5 million and the retailers having annual
turnover of Rs.1.00 million to Rs. 5.00 million would be enrolled
and charged turnover tax @ 2%;
(iii) manufacturers or producers or retailers who are limited
companies themselves or are owned by limited companies will
stay out of the ambit of Turnover Tax notwithstanding the fact
that they fall within the aforesaid limit of annul turnover;
(iv) The persons under the turnover tax scheme shall be enrolled
under section 3A of the Act read with SRO 804(I)/99 dated
01.07.1999 (i.e. the Turnover Tax Rules, 1999). They should not
be ―registered‖ under Chapter-III of the Sales Tax Act, 1990.
Consequently, they shall pay the ―further tax‖ under section
3(1A) of the Act shall also not be entitled to supply sales taxable
goods to persons making deductions under section 50(4) of the
Income Tax Ordinance, 1979. However, persons falling under
the Turnover Tax Scheme shall have option of voluntary
registration under section 3A(3) to avail the aforesaid benefits of
registration, not hitherto available to enrolled persons.