Sales Tax Instructions

Sales Tax Instructions, 2009
(ii)
The concerned Collector, if he is satisfied that the manufacturer is, prima
facie, eligible for exemption will make a reference to the Board giving
necessary details;
(iii)
(iv)
(v)
CBR will, thereupon, request all the Collectors of CE & ST to furnish the
information to CBR in terms of condition (III) of the aforesaid
notification;
The replies received from the Collectors will be passed on to the
concerned Collector;
The formal order will be issued by the concerned Collector after
satisfying himself that all the conditions laid down in the notification are
fully met;
(vi) The copies of the above order will be furnished to, inter-alia, all the
Collectors of CE & ST and CBR.
[Issued by the CBR, Islamabad under the signature of Mr. Muhammad Saeed, Secretary
(ST) addressed to all the Collectors.]
[REDUNDANT]
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SALES TAX CIRCULAR NO. 2 OF 1990 DATE 21 ST JANUARY, 1990
SUBJECT:- REFUND/ADJUSTMENT OF SALES TAX PAID ON PARTLY
MANUFACTURED GOODS.
Attention is invited to Section 27 of the Sales Tax Act, 1951 which provides that
where partly manufactured goods are purchased by a manufacturer and tax has been paid
on those goods on importation or on any previous sale, a refund of the amount of the tax
so paid shall be made to the manufacturer. A question has arisen as to whether or not a
manufacturer is entitled to claim refund/adjustment of tax paid on raw materials which
are used to produce an exempt item and that item is further employed in the production of
taxable goods.
2. The question has been examined in the Board. It is ruled that:-
(i)
(ii)
(iii)
If a manufacturer imports or purchases raw-materials which are
chargeable to tax and employs the same in the manufacture of an exempt
item and that item is further consumed in the same unit in the production
of taxable goods he is entitled to seek refund/adjustment of tax paid on
the materials to the extent that the same have been used in the
production of taxable goods.
If he makes a supply of goods which are exempt from payment of sales
tax he cannot claim refund/adjustment of tax paid on raw materials
used in the production of those exempt goods.
If a manufacturer purchases exempt goods which have been produced out
of tax paid raw materials and consumes those exempt goods in the