Sales Tax Instructions

Sales Tax Instructions, 2009
claim adjustment of input tax paid by them to cooking oil / ghee manufacturers /
suppliers.
2. In terms of notification SRO 24(I)/2006 dated 07-01-2006, the
manufacturers of edible oil/ghee are required to pay federal excise duty @ Re.1/kg in lieu
of duty payable at production or manufacturing stage. Accordingly, the transaction value
at which the commodity is supplied also includes the component of duty paid at import
stage as well as that paid in lieu of duty payable on value addition. Resultantly, the
invoice issued by the manufacturers/ suppliers of cooking oil / ghee does not mention the
amount of duty separately, thereby adjustment thereof is not available to the purchasers.
3. After having examined the issue in detail, the Board is pleased to clarify
that in cases where cooking oil / ghee is supplied to manufacturers of other items in
which the said commodity is used as an input, the manufacturer supplier of cooking oil /
ghee shall issue sales tax invoice, in the format appended as Annex-A, indicating the total
value of supply (inclusive of duty) and mention the component of excise duty (paid a
import stage as well as Re.1 per kg paid in lieu of duty payable on value addition) by
using the formula of tax fraction i.e. 15/115 X value of supply. Further, such invoice shall
be issued only to the registered manufacturers engaged in making taxable supplies of
goods in which cooking oil / ghee is used as an input. In case supplies are made to
persons other than registered manufacturers, invoice shall be issued in the format as at
Annex-B. Further, the manufacturers as noted above shall also furnish a summary of all
such invoices in the format as in Annex-C by the 20 th of the following month to the
Collector concerned.
4. In order to circumvent the possible misuse of the facility, the Collectors
are advised to closely monitor the input tax adjustment claimed by the purchasers and
where any abnormal increase in adjustment vis-à-vis. The adjustment claimed during
corresponding period of last fiscal year is noticed, thorough audit of the concerned
manufacturer shall be carried out immediately to determine its actual tax liability.
[See also letter C. No. 1(3) CEB/04 dated 23 rd January, 2008]
[Issued by the CBR, Sales Tax & Federal Excise Wing, under the signature of Mr. Abdul
Hameed Memon, Secretary (ST-FE-L&P), addressed to the Collector, Large Taxpayers Unit,
Karachi / (Enforcement)/ (Audit), Lahore, the Collector, Sales Tax & Federal Excise, Karachi
(Enf)/ (HQ)/ (Audit)/ Lahore/ Faisalabad/ Gujranwala/ Rawalpindi/ Peshawar and the Collector
Customs, ST & FE, Hyderabad/ Multan/ Quetta. Copy to Mr. Maqsood Ismail, Chairman,
Pakistan Biscuit & Confectionery Manufacturers Association, Karachi with reference to his letter
dated 21-03-2006 and Dr. Ghulam M. Samdani, Secretary, PVMA, Islamabad.]
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Annex-A
SALES TAX INVOICE
(to be issued by manufacturers of cooking oil / ghee to the registered manufacturers)
Sr. No._____________
Dated_____________
Supplier‘s Name Buyer‘s Name &