Sales Tax Instructions

Sales Tax Instructions, 2009
[Issued by the Government of Pakistan, Revenue Division, C. B. R. (ST & FE Wing),
Islamabad, under the signature of Mr.Wajid Ali Secretary (ST & FE-Budget)]
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C. NO.5/8-STB/2005 DATED 6 TH FEBRUARY, 2007
SUBJECT: SANCTION OF REFUND OF INPUT TAX PAID ON IMPORT OF
RAW MATERIALS/PLANT AND MACHINERY
SUBSEQUENTLY SUPPLIED @ ZERO PERCENT.
I am directed to refer to Collectorate of Sales Tax and Federal Excise, Lahore‘s
letter C. No. T030406100172/627 dated 23.09.2006 on the subject cited above and to
clarify that under section 10 of the Sales Tax Act, 1990, if the input tax during a tax
period exceeds the output tax the same is refundable to the registered person. Therefore,
sales tax paid prior to zero-rating at import stage shall be refundable if the supply was
subsequently made @ zero-percent provided the refund accrues under section 10 of the
Sales Tax Act, 1990 i.e. in relation to a tax period, the total deduction of input tax
exceeds the output tax. Therefore, instead of entertaining a separate refund claim for such
transaction, the case should be processed under provisions of SRO 666(I)/2005 dated
30.06.2005 which allows for adjustment of excess input tax for three months before the
same is refunded.
2. Regarding the issue of refund against local supplies made by five zerorated
sectors, the same has been clarified through Sales Tax General Order No.2/2007.
[Issued by the Government of Pakistan, Revenue Division, C. B. R. (ST & FE Wing),
Islamabad, under the signature of Mr. Wajid Ali Secretary (ST & FE-Budget) addressed to the
Collector, Sales Tax & Federal Excise, Lahore]
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C. NO.1 (56)/STM/2006 DATED 8 TH FEBRUARY, 2007
SUBJECT:
SIMPLIFYING OF REFUND PROCEDURE ON PACKING
MATERIAL USED IN EXPORTED GOODS AND SUPPLY OF
ZERO-RATED GOODS.
I am directed to refer to the Collectorate of ST&FE, Faisalabad,s letter
C.No.STR/FTR/10/06/10611 dated 02.02.2007 on the subject cited above and to clarify
that for the purposes of determining the quantum of refund claimed vis-à-vis value of
zero-rated supplies, the amount of refund claimed on account of packing material & such
other residual inputs (excluding the amount of refund claimed on account of utilities)
shall be taken into consideration.
2. It is also clarified that the value of all zero-rated supplies i.e. export sales
as well as local zero-rated supplies shall be taken into account to determine as to whether
or not the refund claimed by manufacturer-cum-exporters dealing in five zero-rated