Sales Tax Instructions

Sales Tax Instructions, 2009
I am directed to refer to Board‘s letter C. No.1/73-STT/96, dated 24.06.1998 and
dated 8.7.1999 (copies enclosed) on the above subject and to say that the Board, vide its
letter dated 24.6.1998, had issued instructions that in view of difficulties faced by the
Sugar Industry the amount of sales tax due on bagasse may be recovered in installments
spread on two years. The Collectors were required to be in touch with the Sugar Mills for
payment of installments. The Board had also further directed that the case for waiver of
additional tax will be considered as soon as the sugar mills clear their arrears. However,
Board vide its letter dated 8.7.1999 also conveyed that in view of ECC decision in para A
(v) of case No.ECC/217/18/98, dated 26.11.1998 outcome of the Court‘s decisions may
be awaited and that recovery of sales tax on the subject item may not be enforced until
the announcement of judgment of appeal by the Supreme Court subject to the condition
that the sales tax paid/recovered should not be refunded.
2. You are requested to intimate mills-wise latest position of arrears of sales
tax on bagasse in the enclosed format by the 6 th November, 1999.
3. This also dispose-off Collector of Sales Tax, Hyderabad‘s letter C.
No.19-ST/Misc/Sugar/CE/98/4408, dated 26.10.1999, who should send similar report.
[Issued by the CBR, Islamabad, under the signature of Mr.Muhammad Zahiruddin,
Secretary (STT),addressed to the Collector of Sales Tax, Lahore / Gujranwala / Faisalabad
/Hyderabad /Multan /Peshawar/ Mirpur (AJ&K) and others].
Copy of Letter No.1/73-STT/96, dated 8 th July, 1999 is reproduced below:-
C. NO.1/73-STT/9 DATED 8 TH JULY, 1999
SUBJECT:
LIABILITIES OF SALES TAX ON BAGGASE
I am directed to refer to your letter IV-D(8)Adj/54/98/2736, dated 21.06.1999 on the above subject
and to say that sales tax was payable on ―baggase‖ even if used as fuel for the manufacturer of
the then exempt ―sugar‖ during the year 1996-97.
2. The levy was challenged by the sugar mills vide W.P. No.259/98 and 6 other similar
petitions which were decided by the Lahore High Court in favour of the department. The
concerned sugar mills have filed appeals in the Honourable Supreme Court of Pakistan against
the said judgment.
3. In terms of the ECC decision in para A(v) of case No.ECC/217/18/98, dated 26.11.1998
―the CBR should wait the outcome of the Court decision on payment of sales tax on baggase used
as fuel.‖
4. Accordingly, coercive recovery measures may not be made for the recovery of the sales
tax dues on baggase for the year 1996-97, until the Supreme Court announces the judgment in
appeal. However, sales tax paid/recovered shall not be refunded.
[Issued by the CBR, Islamabad, under the signature of Mr. Abdul Basit Chaudhry, Second
Secretary (Sales Tax), addressed to Mr. Muhamamd Azhar Iftikhar, Collector of Sales Tax,
Faisalabad.]Copy of letter No.1/73-STT/96, dated 24 th June, 1998 is reproduced below:-
C. NO.1/73-STT/96 DATED 24 TH JUNE, 1998