Sales Tax Instructions

Sales Tax Instructions, 2009
account of the buyer in order to claim input tax on refund thereon. In case of credit
transactions, such payment has to be made within 120 days.
2. In the circumstances mentioned in your letter, L/C is established through
a bank on DA basis from a local supplier, the bank makes payment to the suppliers
immediately, but you make payment to the bank after 150 days. It is thus clear that
payment is being made to the supplier through banking channels from your business
account within 120 days. The arrangement with the bank to pay the bank after 140 days is
not restricted by section 73 of the Sales Tax Act, 1990, as it constitutes a form of
loan/credit agreement with the bank.
[Issued by the CBR, Islamabad under the signature of Dr. Ashfaq Ahmed Tunio, Secretary (ST-
L&P) addressed to M/s S.G. Group of Companies, Karachi. Copy endorsed to all the Collectors of Sales Tax
alongwith copy of fax message for information].
********
C.No.1(16)STR/2000 DATED 22 ND SEPTEMBER, 2001
SUBJECT:- ADJUSTMENT OF INPUT TAX PAID ON SERVICES
PROVIDED BY CLEARING AGENTS.
I am directed to refer to your letter No.Ref.MF/S.TAX/2001 dated 17 th July, 2001
on the subject cited above and to say that sales tax is an indirect tax, the burden of which
is passed on to the consumer. Thus, while the liability to pay sales tax into the Treasury is
on the registered person by virtue of subsections (3) and (3A) of section 3 of the Sales
Tax Act, 1990, he charges the amount of sales tax from the buyer his tax invoice issued
under section 23 ibid.