Sales Tax Instructions

Sales Tax Instructions, 2009
By virtue of the amendment, the wholesalers while making supplies to
the persons, other than Government departments, who are deducting
income tax at source, shall be required to pay sales tax on such supplies.
Enforced through amendment in clause (47) of section 2 of the Sales
Tax Act, 1990. Effective from the 1 st July, 2006.
• Amending the Excise legislation to restrict the Collector (Appeals) to
remand back a case for de-novo consideration.
The measure aimed at synchronizing the excise with the sales tax
legislation, besides expediting the disposal of cases pending appeals
before the Collector (Appeals).
Enforced through amendment in section 33 of section 2 of the
Federal Excise Act, 2005. Effective from the 1 st July, 2006.
• Identifying the scope of plant, machinery and equipment for sales tax zerorating.
Import and supply of plant, machinery & equipment was zero-rated in
the Budget 2004-05, while parts thereof were also zero-rated
subsequently in 2005-06 with a view to promote the growth of capital
goods‘ manufacturing.
In order to remove the anomaly and confusion regarding extent of zerorating,
Chapters 84, 85 & 90 of the Pakistan Customs Tariff have been
explicitly specified for sales tax zero-rating purposes and a consolidated
notification is being issued.
Sales tax notifications SR 527(I)/2005 and SRO 530(I)/2005 would
remain operative.
Enforced through Customs Notification SRO 575(I)/2006 dated
06.06.2006, effective from 6 th June, 2006.
• Collection of sales tax on accrual basis from WAPDA.
Presently, sales tax on supply of electric power by WAPDA is levied on
cash collection basis i.e. sales tax becomes due on payment of bill
amount by the consumers. Whereas, KESC pays sales tax on billing
basis.