Sales Tax Instructions

Sales Tax Instructions, 2009
3. It will be appreciated, if the above instructions are circulated to the head
of Departments/Organizations working under your Ministry/Division.
With regards,
[Issued by the Cabinet Division Islamabad under the signature of Mr. Zafar Iqbal, Joint
Secretary (IMP) addressed to the Secretaries/Additional Secretaries Incharge of
Ministries/Divisions, Islamabad/ Rawalpindi.]
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U.O.No.3(13)STM/2000 DATED 1 ST FEBRUARY, 2000
SUBJECT:
REQUEST FOR MEETING OF ALL PAKISTAN CLOTH
EXPORTERS ASSOCIATION, FAISALABAD WITH THE
CHIEF EXECUTIVE OF PAKISTAN
Reference Ministry of Commerce‘s letter No. 2(1)/2000-T.O.I., dated 28.01.2000
on the above subject (copy enclosed).
2. Comments on sales tax related problems pointed out by All Pakistan
Cloth Exporters Association are enclosed for onward submission to the Ministry of
Commerce.
3. This issue with the approval of Member (Sales Tax).
[Issued by CBR., Islamabad under the signature of Mr. Akhtar Zaman Khattak, Secretary
(STM), addressed to the Chief (TP), C.B.R., Islamabad, with reference to Ministry of Commerce
letter No.2(1)/2000-T.O.I., dated 28.01.2000]. Copy of the letter is reproduced below:-
SUBJECT:
PROBLEMS CONFRONTED BY EXPORTERS PROBLEMS:
COMMENTS BY S.T.WING OF CBR.
II. (a) Sales Tax Refund.—Exporters were being allowed refund against 100% Export
Production. Later this facility was restrained to the extent of amount of sales tax on
goods actually exported.
Refund of sales tax paid on the raw materials (input tax) used in the manufacture of
goods meant for export actually becomes due only when goods are physically exported.
In order to facilitate the exporters (particularly commercial exporters), refund of input
tax was allowed in the beginning of VAT-mode of sales tax during July, 1996 on the
goods which were lying in stock and not actually exported. However, cases of abuse of
this facility were detected wherein the stock had been sold in the local market and the
amount of refund obtained from the sales tax Department was actually used for business
purposes. This led to the withdrawal of the facility and imposing of restrictions of
allowed refund to the extent of goods actually exported. On the pressure of the business
community, the then Government allowed the facility temporarily which is still continuing
in the form of administrative instructions, although, the refund rules did not permit it.
This is leading to audit objections. Actually, the administrative instructions which are at
variance with the notified rules need to be withdrawn.
II. (b) Delay in Verification of Raw Material Invoices.—Faisalabad Collectorate has
sent raw material purchase invoices of exporters for verification to Lahore and Karachi.
Nearly 30,000 invoices are pending verification. Till the verification of these invoices no
refund is issued to exporters. Huge amounts of exporters are stuck up in sales tax and
they are unable to execute more export.