Sales Tax Instructions

Sales Tax Instructions, 2009
component parts of machinery from the levy of sales tax, provided that the articles are
identifiable as intended for use only with machinery. The definition of machinery is as
under:-
―Machinery operated by power of any description such as is used in any
industrial process, including the generation, transmission and distribution of
power, or used in processes directly connected with the extraction of minerals
and timber, construction of buildings, roads, dams, bridges and similar structures
and the manufacture of goods.‖
3. Keeping in view the above only such electric motors shall be entitled to
sales tax exemption which are identifiable as intended for use with machinery. The
machinery should be such as is used in any industrial process including the generation,
transmission and distribution of power, or used in process directly connected with the
extraction of minerals and timbers, construction of building, roads, dams, bridges and
similar structure and the manufacture of goods.
4. Judged on this criteria the electric motors used in domestic water pumps,
air conditioners, refrigerators, water coolers, exhaust fans, concrete mixtures, electric lifts
and irrigation pumps etc., shall stand excluded from the purview of sales tax exemption
under SRO 600(I)/90 dated 7th June, 1990 (copy enclosed).
5. The Collectors should conclude decisions in the light of above mentioned
criteria with regard to the admissibility or otherwise of exemption of sales tax on electric
motors.
[see also C. No.9(98)-ST/72, dated 8 th May, 1993 and superseded by C. No.9(98)-ST /72, dated
20 th July, 1993]
[Issued by the CBR., Islamabad, under the signature of Mr. Aijaz Ali Jafri, Second
Secretary,(SST.II), addressed to the Collector, Central Excise & Sales Tax, Karachi/ Lahore; and
the collector, customs, Central Excise & Sales Tax, Hyderabad/ Rawalpindi/ Peshawar/
Multan/Quetta].
Copy of Notification No. S.R.O. 600(I)/90, dated 7 th June, 1990 is reproduced below :-
Notification No. S.R.O. 600(I)/90, dated 7 th June, 1990. -- In exercise of the power
conferred by section 7 of the Sales Tax Act, 1951, (III or 1951), and in supersession of this
Ministry‘s Notification No. S.R.O. 697(I)77, dated 4 th August, 1977, the Federal Government is
pleased to direct that the article produced or manufacture in Pakistan falling under heading
numbers of the first Schedule of Customs Act, 1969 (IV of 1969), specified in the table below
which are machinery or component parts of machinery as hereinafter defined, shall be exempt
from the tax payable under the said Act :
Provided that, the articles are identifiable as intended for use only with machinery.
Definition of machinery:
(i)
Machinery operated by power of any description (excluding agricultural
machinery or implements imported into Pakistan) such as is used in any