Sales Tax Instructions

Sales Tax Instructions, 2009
987(I)/99, dated 30 th October, 1999, the importer or purchaser of the locally
manufactured machinery is required to submit an indemnity bond to the Collector of
Customs or Sales Tax, as the case may be, binding himself to pay sales tax and additional
tax in case of his failure to fulfil the conditions specified in the notification. The
indemnity bond shall not be discharged till the submission of installation-cum-production
certificate.
2. Under sub-section (3) of section 3 of the Sales Tax Act, 1990, the
liability to pay sales tax is on the importer or the supplier. However, under sub-section
(4) ibid, the Federal Government is empowered to specify the goods in respect of which
the liability to pay tax shall be of the person receiving the supply. In case of SRO
987(I)/99, the purchaser takes upon himself the liability to pay the tax in case the
conditions of the notification are not fulfilled. Since the liability is upon the purchaser it
would be possible to effect recovery from him only when the indemnity bond is
submitted to the Collectorate where he is registered. Therefore, the indemnity bond
should be furnished to the Collectorate where the purchaser is registered. A copy of the
indemnity bond and the subsequent installation certificate should however, be furnished
to the supplier and the Collectorate where the supplier is registered, for information, and
record and audit purposes.
[Issued by the CBR, Islamabad under the signature of Dr. Ashfaq Ahmed Tunio,
Secretary (ST-L&P) addressed to the Collector of Sales Tax Hyderabad. Copy endorsed to all
other Collectors of Sales Tax.]
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C.No.3(16)STP/2000 DATED 8 TH OCTOBER, 2001