Sales Tax Instructions

Sales Tax Instructions, 2009
C.No.1/43-STR/96 DATED 13 TH JUNE, 1996
SUBJECT:- SALES TAX BUDGET INSTRUCTIONS 1996-1997.
Substantial changes have been introduced in the sales tax regime. Salient features
of the sales tax budgetary measures for 1996-97 are given below for guidance:-
PART- A
REVENUE MEASURES
(I) DOMESTIC
Note:- [All changes on domestic side shall take effect on 1.7.1996. This
includes the change of standard rate from 15% to 18% and higher rate from 20% to
23%. All previous exemptions will also continue upto 30 th June, 1996].
(i)
(ii)
Withdrawal of Exemption:-- All general and sector specific exemptions
are being withdrawn w.e.f 1.7.1996 except those on unprocessed
foodstuff, fertilizer, pesticides, sugar, edible oils/ ghee, POL products
etc. which are subject to petroleum development surcharge. A list of
major items on which sales tax (domestic) will be leviable at the standard
rate of 18% w.e.f 1.7.1996 is given in annex to these instructions. It is
not an exhaustive list.
Exemptions made part of the Act in the form of schedule.—The
withdrawal of aforesaid domestic exemptions will become effective from
1.7.1996. The exemptions which will continue even after 1.7.1996 have
been made part of the Act in the form
of the sixth Schedule.
(iii) Goods chargeable to tax at a higher rate.—Last year sales tax on
certain selected raw materials was raised to 20%. The list is being
expanded to include some more items and rate is being raised to 23%.
The items added are plastic raw materials, iron & steel scrap, galvanized
& stainless steel sheets/plates/coils, HR/CR sheets/plates, flat-rolled
products of iron or non-alloy steel, clad, plated or coated, flat rolled
products of stainless steel or other alloy steel, amine-function and
oxygen function amino-compounds.
(iv) Tax @ 5% on sensitive items.—Some sensitive items (e.g. medicines &
their raw materials) are being taxed at the concessional rate of 5% with
provision to claim full input adjustment. The list is given in the Second
Schedule to the Act.
(v)
Restoration of standard rate on 14 selected items.—In the budget
1995-96, sales tax on 14 selected items was reduced to 10%. The sales
tax on these items is now being restored to the standard rate. Therefore,
SRO 515(I)/95 is being rescinded.
(vi) Items assessable on retail price.—At present 43 items are liable to tax
on the basis of retail price. The list is being curtailed. The items which
will remain liable to tax on the basis of retail price are given in the Third
Schedule to the Act.
(vii) Area specific exemption.— Factories set up in NWFP and