Sales Tax Instructions

Sales Tax Instructions, 2009
of 50% of its production in first ten years or attains a minimum value addition of 40%
while making taxable supplies made from imported plant/machinery.
2. In order to resolve the disputes arising out of the aforesaid notification, a
scheme was later announced by the Government whereby the importers who made
imports under SRO 27(I)/98 were given an option to pay customs duty @ 1% per year of
default, upto a maximum of 5%, with a commitment that payment of customs duty on
these lines will be considered as full & final discharge of the entire liability. Accordingly,
customs SRO 455(I)/2004 dated 12.06.2004 was issued.
3. Since, SRO 455(I)/04 did not cover/embed section 13 of the Sales Tax
Act, 1990, therefore, on the advice of Law and Justice Division, another sales tax
notification SRO 501(I)/2006 dated 31.05.2006 was issued, whereby sales tax exemption
on plant, machinery and equipment imported under SRO 27(I)/98 was granted to all those
manufacturers who had failed to comply with the conditions of SRO 27(I)/98 and had
paid customs duty at concessionary rate under SRO 455(I)/04.
4. The Law and Justice Division also advised that all the sales tax demands
raised on account of failure to fulfill the condition laid down in notification SRO 27(I)/98
dated 17.01.1998 should be withdrawn, including the cases made out by different field
formations demanding payment of sales tax on 40% value addition against local supplies
and any amounts of sales tax recovered from such importers-cum-manufacturers in
consequence of demands should be refunded.
5. The Board is, therefore, pleased to direct that all the sales tax related
contravention cases instituted on account of failure to fulfill the condition laid down in
notification SRO 27(I)/98 dated 17.01.1998 should be withdrawn, including the cases
made out by different field formations demanding payment of sales tax on 40% value
addition against local supplies.
6. This decision shall also apply to the cases where demands have been
established through quasi-judicial orders. Any amount of sales tax recovered from such
importers-cum-manufacturers in consequence of the demands raised by the department
shall be refunded to them subject to the condition that such amounts are verifiable,
identifiable and relatable to such transactions and such payment had not already been
adjusted by the registered person against his output tax liability.
[Issued by the CBR, Islamabad, under the signature of Mr. Abdul Hameed Memon,
Secretary (ST&FE-L&P) and copy endorsed to Secretary, Law and Justice Division with
reference to Law, Justice and Human Rights Division‘s C. No. 1553/2005-Law(I) dated 7 th March,
2006 and subsequent U.O. No. 1167/06 dated 15.05.2006, all Collectors of Sales Tax and Federal
Excise & all Collectors of Customs
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C.NO.3(1)STL&P/03 DATED 7 TH SEPTEMBER, 2006
SUBJECT:
RELEASE OF BANK GUARANTEE