Sales Tax Instructions

Sales Tax Instructions, 2009
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General
( PERVAIZ MUSHARAF )
President
C.No.3(54)STP/99 DATED 6 TH SEPTEMBER, 2001
SUBJECT:-
LEVY OF SALES TAX ON DISPOSAL OF ASSETS.
I am directed to refer to the subject cited above and to say that it has come to the
notice of the Board that in some cases sales tax is not being charged on the disposal of
assets, including old and used plant and machinery, vehicles and scrap, by the registered
persons, on the ground that such disposal is not part of the ‗regular and continuous
business activity‘ of that registered person, and that it is ‗not a frequent and constant‘
taxable supply by such person.
2. It is clarified that sales tax is to be charged, levied and paid on all taxable
supplies made by a registered person under section 3 of the Sales Tax Act, 1990 read
with sub-section (33), (35), (39) and (41) of section 2 ibid. There is no legal provision
excluding the sale of old plant and machinery, vehicles or scrap, etc. from the purview of
taxable supply. The Sales Tax Act, 1990 makes no distinction between goods supplied by
a registered person ‗in the normal and continuous course of business activity‘ as a
‗frequent and constant supply‘ or otherwise, and there can be no exemption on
presumptions.
3. The Collectorates are therefore advised to recover sales tax on all such
supplies, and to immediately file appeals in case any orders to the contrary have been