Sales Tax Instructions

Sales Tax Instructions, 2009
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SALES TAX CIRCULAR NO. 6 OF 1990
C. No. 9(7)-ST/87 DATED 12TH SEPTEMBER, 1990
SUBJECT:- REFUND / ADJUSMENT OF SALES TAX PAID ON PACKING
MATERIALS USED IN THE MANUFACTURE OF TAXABLE
GOODS.
Attention is invited to section 27 of the Sales Tax Act, 1951 which provides for
refund of sales tax paid on ―partly manufactured goods‖ which is defined to be ―only
goods which are to be incorporated into and form a constituent or component part of an
article which is subject to tax‖. Accordingly, sales tax paid on goods which are further
used in the manufacture of taxable goods is allowed. A questions has arisen as to whether
or not labels and packing materials (such as boxes, cartons etc.) are also ‗partly
manufactured goods‘ and that refund/adjustment of tax paid on such packing materials is
to be refunded/adjusted subject to fulfillment of conditions laid down in section 27 ibid.
2. The question has been examined in the Board and it is found that Sindh High
Court in the case of Commissioner of Sales Tax (East) Karachi Vs. M/s. Allied Trading
Corporation Ltd. has answered the question in affirmative. Relevant portion of the
judgment is reproduced below :-
― The question is whether the labels used by the assessee for the purpose of
affixing on battery cells, and the cartons used as packing material for the sale of
assessee‘s products were partly manufactured goods and as such the component
part of article manufactured and sold by the assesses? The respondent was
entitled to refund as it has satisfied all the conditions necessary for claiming such
a refund. We, therefore, answer the question in affirmative‖.
3. In view of the above, it is directed that refund/adjustment of sales tax paid on
packing materials may be allowed. While doing so, sales tax officers may ensure that all
the conditions prescribed in the Sales Tax Act, 1951 are complied with by the
manufacturers.
[Issued by the CBR., Islamabad, under the signature of Mr.Muhammad Saeed, Secretary (Sales
Tax)]
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C. NO.9(14)-ST/87 DATED 25 TH SEPTEMBER, 1990
SUBJECT:- REFUND OF SALES TAX ON LIQUID GLUCOSE
I am directed to refer to your letter No. CCL/90/D/236, dated 4 th July, 1990 on
the subject noted above and to say that under section 27(1) of the Sales Tax Act, 1951 it
is the buyer of partly manufactured goods who is entitled to seek a refund of the amount