Sales Tax Instructions

Sales Tax Instructions, 2009
No.1/98, may please be referred to. It is regretted that the fixed sales tax (FST) scheme or
the Special Sales Tax Procedure (SSTP) scheme cannot be revived or extended for the
year 1999-2000.
2. You are advised to impress upon the members of your Association to pay
invoice-based GST in VAT-mode. The Government expects that the Associations shall
extend full cooperation in implementation of GST in VAT-mode. Associations‘
proposals, if any, for simplification of forms and procedures shall be welcome provided it
is within the scope of invoice-based GST system in VAT-mode.
[Issued by the CBR,Islamabad, under the signature of Mr.Muhammad Zahiruddin,
Secretary (STP), being addressed to Mr. G.R. Arshad, Chairman Action Committee, All Pakistan
textile Processing Mills Association, Karachi.]
Copy of letter C. No.R/G-488/99/142, dated 26.07.1999 is reproduced below:-
C. NO.R/G-488/99/142 DATED 26 TH JULY, 1999
Mr. M. Iqbal Farid Chairman,
Central Board of Revenue, Islamabad.
SUBJECT:
SALES TAX ON TEXTILE PROCESSING UNITS
Kindly refer to the various held at Islamabad and Karachi between representatives of
trade bodies and government officials on the above subject. In the meeting held under the
instructions of Finance Minster and Chairman, Export Promotion Bureau on 5 th July with our
representative and also members of other trade bodies great emphasis was placed on registration
with the Sales Tax Department under GST.
It is pertinent to mention here in that all our member units are already registered with the
Sales Tax Department. About 70 of our member units who are dealing with exporters or directly
export their products have already opted for GST. Out of the total membership of 350, the
remaining members also pay Sales Tax but on Fixed. Capacity basis for the last about 10 years.
Out Association has always suggested to the Government that its members are willing to
opt for GST provided the practical difficulties faced by our members in its implementation are
removed. For instance the sectors proceeding the textile processing like, Sizing & Wrapping,
Doubling of yarn, Weaving etc., which are outside the ambit of GST should be brought into the
GST net work so that Textile Processing Units are able to get GST invoices form these sectors.
Similarly the traders for whom processing is done by our members are not registered under GST
and as such are not interested in getting Sales tax invoices from our members, and this chain
upward and downward has to be completed for smooth implementation of GST. We are confident
that your honour will also please judge for yourself whether the implementation of GST by Textile
Processing Units under the circumstances is justified or practicable.
Your honour is also aware that in the meeting hold on 5 th July 1999 and presided over by Mr.
Wajid Jawad, it was decided that the current Sales Tax system will continue in operation till
15.07.99. as we have not received any new instructions in this regard the undersigned in his
capacity as Chairman Action Committee has advised all our members to pay Sales Tax under
GST/FST, as the case may be, on due date in accordance with present practice. This has done to
ensure that revenue collection target of Government does not suffer any shortfall. Your honour is
accordingly requested to issue necessary instructions to all concerned authorities regarding
extension in operation of present system till 31 st July 1999 in order to avoid any audit objection at
a later stage. I will request your honour to consider our case separately from that of other allied
sector of textile industry e.g. sizing, Doubling, Weaving, Wholesale etc., as we are already
registered under Sales Tax Act and are regularly discharging our sales tax liability. The only
difference is that we are paying sales tax under Capacity System which was worked out after