Sales Tax Instructions

Sales Tax Instructions, 2009
[Issued by CBR, under the signature of Mr. Aftab Ahmad Razzaqi, Secretary Tariff
(ST&FE-Budget), addressed to the Collector of Customs, Peshawar/Rawalpindi /Lahore/
Faisalabad/Sambrial/Multan/Hyderabad/Quetta & Port Qasim/Preventive/ Appraisement &
Model Customs Collectorate, Karachi.]
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C.NO. 1(33)STR/99 DATED 11 TH OCTOBER, 2006
SUBJECT:
UCH POWER LIMITED – NOTICE FOR RECOVERY UNDER
SECTION 48 OF THE SALES TAX ACT, 1990
I am directed to refer to your letter dated 5.12.2001 on the above subject and to
state that:
(i)
(ii)
(iii)
(iv)
Rule 4(3) of SRO 124(I)/2000 dated 15.3.2000 deals with the valuation
of electric power and says that in case of IPPs (including HUBCO &
KAPCO), the value of the supply of electric power will be ―energy
purchase price‖ only and any amount received in excess thereof on
account of capacity purchase price, energy price premium, excess bonus,
supplement changes etc. shall not be treated as component of value of
supply;
The provisions of rule 4(3) deal with dispute of price between
WAPDA/KESC and IPPs. The upshot of these provisos is that if
WAPDA or KESC disputes and does not pay any amount, it shall issue a
certificate, which shall be treated as Credit Note for IPP for the purpose
of section 9 and similarly, if IPP receives any amount from WAPDDA or
KESC for any other tax period (due to price-related dispute), IPP shall
pay tax on such amount in the return for the tax period in which such
amount is received;
Rule 5(1) of above SRO allows WAPDA and KESC to deposit sales tax
on ―collection basis‖. No such facility has been provided or is available
to IPPS or captive power units; and
Rules 5 and 6 speak of WAPDA & KESC only and do not mention any
thing about IPPs or captive power units, which mean that for the purpose
of filing of return and determination of sales tax liability by IPPs or
Captive Power Units to any other person engaged in the generation,
transmission, distribution and supply of electricity, the standard
provisions of section 26 and 7 of the Sales Tax Act, 1990 shall apply.
Hence for the purpose of payment of sales tax, all the supplies made
during a tax period will have to be accounted for by IPPs, CPUs or other
person (other than WAPDA & KESC) in the tax return regardless
whether or not price / value of supplies has been received from the buyer.