Sales Tax Instructions

Sales Tax Instructions, 2009
Retailers having turnover between Rs. 10 million to Rs. 20 million are also been allowed
to keep simplified records as prescribed in the ‗Turnover Tax Rules, 1999‘.
How do I calculate the tax element of sales?
There are a number of different ways you can use to calculate the component of tax.
These are set out in the Retail Tax Rules 1998. If all of your sales are taxable, then the
calculation of the tax element of your total sales will be as follows.
Monthly Sales = Rs 460,000
Rate of sales tax @ 15%
Tax element is = 460,000 x 15 / 115 = Rs. 60,000.
When and how do I file my tax return?
When you have registered or enrolled, each month you have to calculate the amount of
tax due, complete a sales tax return and then deposit both the return and the tax due with
the designated branches of National Bank of Pakistan.
You must file your sales tax return and pay the tax due by the 15th of the next month
following the tax period. For example, for the month of July, your return must be filed
by the 15th of August.
Who should register for Sales Tax?
Should I register for Sales Tax.
If you are supplying taxable goods or services, you must register for Sales Tax if :
• you are a manufacturer or retailer and your turnover is Rs.2.5 million
for manufacturers & Rs. 20 million for retailers or greater;
• you are an importer, wholesaler, dealer or distributor;
• you are an exporter.
You may also apply for voluntary registration below the above mentioned threshold.
What is the Threshold ?
Threshold is the annual turnover above which a person is required to register. This means
that only those whose turnover exceeds the threshold needs to be registered.
Presently, the annual threshold has been set at
Are all supplies taxable ?
• Rs. 2.5 million and above for manufacturers, and
• Rs. 20 million and above for retailers.
No. The supply of certain goods is exempt. The following list gives examples of some
goods that are exempt.