Sales Tax Instructions

Sales Tax Instructions, 2009
[Issued by the CBR, Islamabad, under the signature of Mr. Asif Abbas, Second Secretary
(ST-Budget), addressed to Mr. Liaqat Ali Gill, Proprietor, M/s Spectrum Lines, 69-Z, 1 st Floor,
Commercial Area, Phase-III, DHA, Lahore Cantt]
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C.NO.1(4)STT/2005 (Vol-II) DATED 11 TH DECEMBER, 2007
SUBJECT:
EXEMPTION FROM GENERAL SALES TAX AS ZERO RATED
SUPPLIES FOR SALES TAX.
I am directed to refer to your letter ISL 07/1596-JJA/AHU dated 23 rd October,
2007 on the subject cited above and to say that taxable supplies made by registered
persons to the recognized NGOs including ICRC against international tender are exempt
vide SRO274(I)/2006 dated 21 st March, 2006 read with section 13 of Sales Tax Act,
1990. However all the supplies made against international tenders are currently zero-rated
in terms of S.No.4 of Fifth Schedule to the Sales Tax Act, 1990.
[Issued by the CBR, Islamabad, under the signature of Mr. Rizwan Salabat Second
Secretary Tariff (ST&FE). Addressed to Jean- Lou Jacquier, Administrative Co-ordinator,
International Committee of the Red Cross (ICRC), House No.12, Street. 83, G-6/4, Islamabad.]
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C. No.1/33-STB/2004 (main) DATED 13 TH DECEMBER, 2007
SUBJECT:
CLARIFICATION REGARDING LEVY OF GST AGAINST
CONTRACT WITH SPECIFIC REFERENCE TO PETROLEUM
EXPLORATION COMPANIES WORKING IN JOINT VENTURE
I am directed to refer to your letter C. No. MOL-SNGPL-ST/2007 dated
10.12.2007 on the subject cited above and to say that the services of construction and
civil works do not attract the levy of sales tax as already clarified by the Board vide Sales
Tax Circular 2 of 2006 dated 20.03.2006.
2. As regards the question of leviability of sales tax on goods consumed
during the execution of the services, it is held that all civil works contracts shall be out of
the ambit of chargeability of sales tax which fulfill the following criteria listed below:
(a)
(b)
(c)
(d)
the sales tax has been paid by the contractor at the time of procurement
of goods;
no supply of same state goods takes place and the goods supplied are
consumed in civil works/repair e.g. paint consumed in white washing;
no value addition is made as far as the goods are concerned: the contract
consist of charges for services rendered and value of goods on actual
basis;
the activities/services of the contractors are not taxable: no sales tax is
leviable on the goods supplied in the course or furtherance of nontaxable
activity as per provisions of section 3 of the Act; and