Sales Tax Instructions

IMPORTERS.
Sales Tax Instructions, 2009
I am directed to refer to the Collectorate‘s letter No.SI/MISC/01/2004/ DCA-
Import dated 20.12.2006 on the subject noted above.
2. The issue of sales tax registration of importers has been re-examined in
the Board. The clarification issued vide C.No.3(62)STP/1997 (Pt-I) dated 27.05.2003
after due consultation of the Law, Justice & Human Rights Division, reflects the correct
legal position. As per rule 4 of Sales Tax Rules, 2006, every importer engaged in making
taxable supplies in Pakistan in the course or furtherance of any taxable activity is required
to be registered. If a person is engaged in making exempt supplies in Pakistan, he is still
conducting taxable activity in accordance with the definition of this term. Therefore, if
such person imports taxable goods and puts the same to business / non-business use, he is
making a taxable supply and both the conditions for registration are fulfilled and such a
person is required to be registered. On the other hand, a commercial importer importing
exclusively exempt goods, although carrying on a taxable activity, does not make a
taxable supply and such person fulfils only one condition and is not required to be
registered. Similarly, persons like diplomats, government departments etc are not
engaged in taxable activity and they are not required to be registered irrespective of the
fact that they are importing taxable or exempt goods. In view of above discussion, read
with the sub-sections (33), (35) and (41) of section 2 of the Sales Tax Act, 1990, the
Board is pleased to advise that the following categories of importers as cited in the
Collectorate‘s above said letter are not required to be registered provided they are not
engaged in any other taxable activity relating to taxable supplies or taxable services:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Educational institutions
Government departments
Foreign embassies / consulates
Persons importing vehicles under baggage or gift schemes
importer of gift or equipment for personal use on one time basis
an importer engaged exclusively in trading/ import of exempted goods
3. However, the sales tax law applies to importers of FATA or PATA as
long as they are carrying on taxable activity in ‗tariff area‘ of Pakistan. Even if such
importers are making supplies of taxable goods to FATA / PATA, such supplies are to be
treated as taxable supplies made in Pakistan because FATA / PATA are part of Pakistan
and because these supplies originate from the tariff area. As regards the donations
specified in Chapter 99 of PCT, the importer is not required to be registered if he is not
carrying on a taxable activity in Pakistan.
4. It is further clarified that the clarification as above deals only with the
requirement of registration and is not to be confused with the requirement of payment of
sales tax at import stage on all goods that are not expressly exempted from such payment.