Sales Tax Instructions

Sales Tax Instructions, 2009
Currently, dairy products including milk, desi ghee, whey, yogurt, etc.
enjoy sales tax exemption under the Sixth Schedule thereby sales tax
paid on the inputs consumed in manufacture thereof is not adjustable.
Thus, adding to the cost of dairy products.
Zero-rating of sales tax on dairy products would enable the
manufacturers to offset the impact of tax paid on inputs and resultantly
lower the cost of these products. Dried milk without addition of sugar or
any other sweetener would continue to remain exempt.
Likewise, zero-rating of sales tax on stationery items like pens, lead
pencils and children colors would reduce the cost of these items by
taking off the burden of tax there from without depriving the
manufacturers of these items from the facility of input tax adjustment.
Enforced through Notification SRO 548(I)/2006 dated 05.06.2006,
effective from the 5 th June, 2006.
• Providing sales tax zero-rating on import and supply of trucks and dumpers
of g.v.w. of 5 tones and above.
Impact of sales tax would be withdrawn. Simultaneously, adjustment of
tax paid on inputs used in the manufacture of such vehicles would be
available to the manufacturers.
The measure would promote heavier transport vehicles required in
construction and allied industry.
Enforced through Notification SRO 548(I)/2006 dated 05.06.2006,
effective from the 5 th June, 2006.
• Levying upfront single stage sales tax on 30% value addition on import of
pesticides.
Dealers and distributors are mostly out of tax net. Hence, pocketing sales
tax despite recovering it from the farmers.
The measure is aimed to provide pesticides to the farmers at reduced
price, besides capturing the revenue of value addition of subsequent
stages.
Enforced through Notification SRO 553(I)/2006 dated 05.06.2006,
effective from the 5 th June, 2006.