Income Tax Bar Association Karachi
WORKSHOP ON SALES TAX
Pearl Continental Hotel, Karachi
21 – 22 July 2005
Income Tax Bar
Association
Karachi
DETERMINATION OF TAX
LIABILITY
&
BOOK KEEPING, RECORDS
AND RETURNS
Workshop
on Sales Tax
By
MEHMOOD A. RAZZAK
Partner
Mehmood Idrees Masood & Co.
Pearl Continental
21-22 July 2005
2
DETERMINATION OF TAX LIABILITY (SECTION-7)
Income Tax Bar
Association
Karachi
Workshop
on Sales Tax
Pearl Continental
21-22 July 2005

Basic Concept of VAT mode - deduction of tax paid (input
tax) from the tax charged (output tax) and pay the difference
to the ex-chequer.

Claim the refund (newly inserted concept) in case the
difference is negative.

Only a registered person is entitled to such adjustment. A
person who is liable to be registered but not registered shall
not be so entitled. (section2(25)).

Both input tax paid or payable (accrued) shall be
admissible.

Input tax should relate to goods used in supplies made or
to be made.
3
DETERMINATION OF TAX LIABILITY (SECTION-7)
Income Tax Bar
Association
Karachi
(Contd…)
 Out of tax period input tax adjustment allowed for preceding
twelve tax periods - the reasons for delayed adjustment
required to be specified in the revised return.
 In order to claim adjustment, the registered person should
hold.
Workshop
on Sales Tax
 Valid Tax Invoice - for locally purchased goods.
 Bill of entry or Goods Declaration - for imported goods.
 Treasury challan - for goods purchased in auction.
Pearl Continental
21-22 July 2005
4
TAX CREDIT NOT ALLOWED – SECTION-8
Income Tax Bar
Association
Karachi
 Input tax paid on goods used or to be used for any purpose
other than for the manufacture or production or supply of
taxable goods shall not be allowed.
 Or any other goods which the Federal Government may so
declare i.e., vehicles, food and beverages, garments,
Workshop
on Sales Tax
fabrics, consumption on entertainment, gifts and give-away
acquired otherwise as stock-in-trade.
 Certain prescribed items, if sold to un-registered persons,
will not entitle the registered person to claim input tax e.g.
polypropylene
Pearl Continental
21-22 July 2005
granules,
artificial
filament,
sugar,
air
conditioning plant.
5
TAX CREDIT NOT ALLOWED – SECTION-8
Income Tax Bar
Association
Karachi
(Contd…)
 Extra tax charged under Section 3 (5) shall also not be
allowed.
 Input tax paid on fake invoices shall be inadmissible.
 If the registered person fails to provide requisite information
Workshop
on Sales Tax
as prescribed by the Board, he will be barred from adjusting
input tax.
 Input tax relating to taxable supplies only shall be allowed (Apportionment of Input Tax).
Pearl Continental
21-22 July 2005
6
DEBIT AND CREDIT NOTES ADJUSTMENTS – SECTION-9
 Debit and credit note adjustments are allowed in cases of
Income Tax Bar
Association
Karachi
Workshop
on Sales Tax





Cancellation of supply
Return of goods
Change in the nature of supply
Change in the value of supply
Or in any event where the amount as per the tax invoice
or the return needs to be modified
 The time limit allowed for such adjustment is 180 days from
the date of supply, extendable for further 180 days by the
collector on specific request.
 Goods unfit for consumption, returned by the buyer should
be destroyed only after obtaining permission from the
collector and yet under the supervision of sales tax officer.
Pearl Continental
21-22 July 2005
 The credit notes must be issued immediately upon receipt of
the returned goods and the debit notes.
7
INADMISSIBLE TRANSACTIONS – SECTION-73
 This section is directly related to section 7.
Income Tax Bar
Association
Karachi
 Transaction value exceeding Rs. 50,000 should be made
through Crossed banking instrument
 It should evidence the transfer of the amount in favour of
supplier from the business account of the buyer.
 Online transfer of payment from the business account as
well as payment through credit card will also be admissible.
Workshop
on Sales Tax
 Payments against utility bills are excluded.
 Any payment made otherwise shall not be admissible.
 Maximum period of settling the transaction is 180 days.
 The amount so received should be deposited in supplier’s
business account in order to enable the supplier to claim
input tax adjustment.
Pearl Continental
21-22 July 2005
 These business accounts should be declared by the
registered persons to their relevant collectors.
8
OTHER FEATURES OF THE REGIME – SECTION-73
Income Tax Bar
Association
Karachi
 Supply to un-registered persons or that of exempt supply
shall remain un-effected.
 Settlement of credit balance in kind shall remain unaffected
provided the legal documentation of the property should be
Workshop
on Sales Tax
transferred in the name of supplier, proper entry in books of
accounts has been made and amount of sales tax is
transferred as per the provision of this section.
 This condition of 180 days is not applicable in case of
imports and goods exported out of Pakistan.
Pearl Continental
21-22 July 2005
9
SALES TAX ON ADVANCES
Income Tax Bar
Association
Karachi
 Time of supply is earlier of the delivery of goods or amount
received.
 Serially numbered “Advance Payment Receipt” should be
issued and tax shall be levied at the time of receiving
advance payment.
Workshop
on Sales Tax
 Sale tax invoice may be issued at the time of delivery. No
tax shall be payable at the time of issuance of sales tax
invoice.
 Advance Payment Receipt shall be treated as a tax invoice.
Pearl Continental
21-22 July 2005
 Any subsequent adjustment can be incorporated through
credit note and time limit of 180 days shall not apply.
10
RETURNS
Income Tax Bar
Association
Karachi
After having discussed the determination of tax liability, let us
have a look at the prescribed format of monthly return.
Workshop
on Sales Tax
Pearl Continental
21-22 July 2005
11
RETURNS
(Contd…)
GOVERNMENT OF PAKISTAN
SALES TAX RETURN CUM PAYMENT CHALLAN
Income Tax Bar
Association
Karachi
(For registered persons other than those falling
under Minimum Value Addition regime)
Regular 5
Revised 5
[Pl. tick the relevant box]
Tax Period
(1) Sales Tax Registration No.
(2) National Tax Number
-
(3) Name
(4) Address
(5) SUPPLIES - O UTPUT TAX
Value
Rate
O utput Tax
(Rs.)
Value
Rate
Input Tax
(Rs.)
a) Taxable supplies
b) Supplies to DTRE registered persons
c) Zero rated supplies - Domestic
d) Zero rated supplies - Exports
e) Exempt supplies
Total Sales
f) Less Adjustment for Credit Notes (U/S. 9)
Net Sales
(6) PURCHASES - INPUT TAX
a) Purchases - Domestic
b) Purchases - Imported
c) Utilities :
Workshop
on Sales Tax
i) Electricity
ii) Gas
iii) Telephone
d) Exempt purchases/Imports
e) Local Zero rated purchases
f) Purchases under DTRE scheme
g) Input tax from previous tax period (if any)
Total purchases
h) Less Adjustment for Debit Notes (U/S. 9)
Net purchases
(7) Net Sales Tax Payable (5-6)
(8) Sales Tax Refundable (6-5)
(9) Sales Tax Arrears:
i) Principal Amount
ii) Default Surcharge
iii) Penalty
(10) TO TAL SALES TAX PAYABLE (Including Arrears) [7 + 9 (i to iii)]
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
*
*
*
Rs.
Rs.
Rs.
02200000 Sales Tax
02250000 Sales Tax on services collected on behalf of Provincial Government.
02260000 Central Excise Duty on services collected in the manner of Sales Tax
DECLARATION :- I declare that the entries in this return are true and correct.
Name :
NIC :
Pearl Continental
21-22 July 2005
Signature w ith Stamp
Designition :
Date
Note: Amounts of Arrears (Col. 9) are not adjustable against refundable amount.
NIL filers may file Return at any designated NBP Branch or respective Collectorate.
For Bank Use
Serial No.
Amount Received
Amount in Words
Bank Officer's Signature
Bank's Stamp
12
TYPE OF RETURNS
Section
Income Tax Bar
Association
Karachi
Workshop
on Sales Tax
Types of Returns
26
Monthly Return
To be filed by importer, manufacturers, wholesalers,
distributors and importers
26AA
Retail Tax Return
To be filed by a Retailer
27
Special Return
To be filed by such person containing such information
as specified by the Board or the Counter
28
Final Return
To be filed by the person who has applied for
de-registration
NIL RETURNS
Is a return indicating no sales tax is payable
NULL RETURN
Is a nil return indicating zero transaction and
ultimately zero amount of tax payable or refundable
Nil returns may be filed in duplicate at Nil Return Receipt
Counters in the collectorate, instead of designated banks.
Summary of Sales & Purchases
Pearl Continental
21-22 July 2005
Every registered engaged in import or supply of goods other than
specified zero-rated goods (i.e. blended or man-made cotton
yarn, textile fabrics and made-ups, garments, leather goods and
footwear, carpets, surgical and sports goods) shall furnish
statement of sales and purchases in the prescribed format
13
alongwith the return.
GENERAL REQUIREMENTS OF LAW
Income Tax Bar
Association
Karachi
Every registered person is required to maintain the following
records at his business premises or registered office:
 Supplies, indicating particulars of good supplied and that of
the buyer(s).
 Purchases with all the above particulars and details.
Workshop
on Sales Tax
 Zero - rated and exempt supplies.
 Imports
 Invoices, credit notes, debit notes, bank statement, banking
instruments, inventory records, utility bills, payroll and wages
records, rental agreements, sale-purchase agreements and
lease agreements.
Pearl Continental
21-22 July 2005
 Any other records as specified by the Board.
14
TAX INVOICES – SECTION-23
Income Tax Bar
Association
Karachi
Every tax invoice issued by the registered person at the time of
supply should contain the following particulars:
 Name, address and registration number of the supplier
 Name, address and registration number of the recipient
Workshop
on Sales Tax
 Date of issue of invoice
 Description and quantity of goods
 Value exclusive of tax
 Amount of sales tax
Pearl Continental
21-22 July 2005
 Value inclusive of sales tax
15
SALES TAX ON RETAIL PRICE
SECTION-3 (2) (a) THIRD SCHEDULE
Income Tax Bar
Association
Karachi
Workshop
on Sales Tax
Pearl Continental
21-22 July 2005
 Following items as specified in the Third Schedule shall be
subject to levy of 15% sales tax on ultimate retail price:














Fruit and vegetable juices
Ice cream
Aerated waters on beverages
Syrups and squashes
Cigarettes
Toilet and laundry soaps
Detergents
Shampoo
Tooth paste and shaving creams
Perfumes and cosmetics
Biscuits and confectionary
Tea
Power drinks and milky drinks
Footwears
16
SALES TAX ON RETAIL PRICE
SECTION-3 (2) (a) THIRD SCHEDULE
Income Tax Bar
Association
Karachi
(Contd…)
 Only a manufacturer is required to charge sales tax on retail
price.
 The amount of sales tax shall be prominently printed on
each article package, container or label.
Workshop
on Sales Tax
 Manufacturers of biscuits shall levy 15% sales tax on exfactory price plus 15% sales tax on minimum value addition
of 12% in lieu of sales tax payable on the basis of retail
price.
Pearl Continental
21-22 July 2005
17
RETENTION OF RECORDS – SECTION-24
Income Tax Bar
Association
Karachi
The records should be retained for a period of three years after
the end of tax period to which they relate. However, the sales
tax officer is still empowered u/s 36 to serve show cause notice
Workshop
on Sales Tax
within five years of the relevant date for the purpose of recovery
of tax not levied, short levied or erroneously refunded.
Pearl Continental
21-22 July 2005
18
MAINTENANCE OF E-RECORDS, FILLING OF
E-RETURNS AND E-INVOICING
Income Tax Bar
Association
Karachi
Workshop
on Sales Tax
Pearl Continental
21-22 July 2005

Maintenance of records on computer is allowed subject to
accessibility, availability of hard copies and having parallel
back up of softcopy.

Issuance of e-invoices is also allowed vide special
procedure rule.

E-invoicing basically means absolute elimination of paper
work as far as invoicing is concerned.

Prior approval from the relevant collector is mandatory.

Authenticity of the origin and integrity of the data should be
guaranteed e.g. through electronic signature or electronic
data interchange (EDI).

A copy of invoice should be simultaneously transmitted to
the collector electronically.

A disaster recovery plan should be in place.

Both the buyer and seller should have
infrastructure to cater with the e-invoicing.
adequate
19
RETAILER – GENERAL – SECTION-3AA
Income Tax Bar
Association
Karachi
Workshop
on Sales Tax

A retailer having turnover of Rs. 5 million and above is
required to be registered and charge sales tax @ 15%.

Minimum value addition should be 10% other than on
supply of motorcycle, rubber tyres, mild steel products,
domestic electrical appliances, sanitary wares etc., where it
range between 3% to 4%.

Records to be maintained
 Cash memos (to be issued if specifically required by
the buyer).
 Purchases

Pearl Continental
21-22 July 2005
Audit once a year with exclusion of retailers declaring
minimum 6% increase his total purchases.
20
RETAILER – GENERAL – SECTION-3AA
(Contd…)
Income Tax Bar
Association
Karachi
Workshop
on Sales Tax
Pearl Continental
21-22 July 2005
21
RETAILER OF SPECIFIED GOODS – SECTION-3AA
Income Tax Bar
Association
Karachi
Workshop
on Sales Tax
Pearl Continental
21-22 July 2005

Specified goods means textile fabrics, textile made-ups,
garments and articles of textile including house textile,
articles of leather, carpets and surgical goods.

Threshold of Rs. 5 million turnover is applicable in this case
also. (Turnover of specified goods).

The applicable rate under this scheme is 3% ad valorem
(2% sales tax and 1% income tax) a final discharge of tax
liability.

In case of corporate retailers 1/3 shall be treated as
advance tax adjustable against final tax liability.

No adjustment of input tax is allowed.

Similarly tax charged by a retailer under this scheme shall
also be disallowed as input adjustment in the hand of the
buyer.

The question of a retailer falling under this scheme shall be
decided by the collector or Board, as the case may be.

The rule is silent on the issue of audit.
22
RETAILER OF SPECIFIED GOODS - SECTION-3AA
(Contd…)
Income Tax Bar
Association
Karachi
Workshop
on Sales Tax
Pearl Continental
21-22 July 2005
23
COMMERCIAL IMPORTERS
Income Tax Bar
Association
Karachi
 Input tax is payable on assessed value @ 15%
 Sales Tax @ 15% is payable on minimum value addition at
the time of making payment of Custom Duty and Sales Tax as
above.
 Minimum value addition shall be taken as higher of 10% or
that of preceding year.
Workshop
on Sales Tax
 Payment of Sales Tax on minimum value addition shall entitle
exemption from audit.
 The format of return for a commercial importer is prescribed
which differs slightly from the normal return
 In addition, he has to file a statement of value addition for
imported and domestic purchases of at the end of the
Financial Year
Pearl Continental
21-22 July 2005
 A separate challan is prescribed for a commercial importer for
payment of sales tax on value addition.
24
COMMERCIAL IMPORTERS
(Contd…)
GOVERNMENT OF PAKISTAN
Annex-B
[See rule 12]
Regular Revised
Sales Tax Return - cum - Payment Challan for
COMMERCIAL IMPORTERS
Note: In case of revised return,insert
date of initial return.
--
Pl. tick the relevant box
--
Please see the instructions on the reverse before you fill this return
Income Tax Bar
Association
Karachi
(01) Sales Tax
Registration No.
(03) Name
(05)
Sales
(a) Taxable Supplies
Exports/ Zero-rated
Supplies
Supplies to DTRE
Registered Persons
(b)
(c)
(d)
(06)
Taxable Purchases
(Domestic)
Exempt Purchases/
Imports
(d)
Rs.
Rate
15%
Rs.
Rs.
15%
Rs.
Rs.
15%
Rs.
TOTAL
Rs.
Arrears / recoveries.
Rs.
15%
(08) Penalty
Rs.
(09) Default Surcharge
(10) Net amount payable
(including,
arrears,
default
surcharge
and penalties)
Declaration
SALES TAX PAID (Input Tax)
Rs.
(6A) Sales tax on value
addition already paid Rs.
on Treasury Challans
(07)
SALES TAX DUE (Output Tax)
Rs.
0%
VALUE (Excluding Sales Tax)
All other Purchases
Year
0%
Rs.
Rs.
(b)
15%
Rs.
TOTAL
Taxable Imports
Rate
VALUE (Excluding Sales Tax)
Rs.
Rs.
Purchases
-Month
(04) Tax period
Exempt Supplies
(a)
(c)
Workshop
on Sales Tax
(02) N.T.N #
Rs.
Rs.
Rs.
TOTAL SALES TAX PAYABLE [5- (6+ 6A) +(7+8+9)]
Rs.
Head of Account
0220000 Sales Tax
I declare that the entries in this return
are true and correct.
Signature
Name
Stamp
N.I.C #
--
-Date
Designation
Pearl Continental
21-22 July 2005
For Bank use
Serial No..........................................
Amount in words..................................................................
.............................................................................................
Bank Officer’s
signature .............................................................................
Amount
Received
Day
Month
Year
Rs.
Bank’s
Stamp
25
JEWELLERS
 Minimum threshold of Rs. 5 million is applicable.
Income Tax Bar
Association
Karachi
 Jewelers, other than zarqar, are required to pay sales tax on
services only i.e. Sale Price minus cost of gold or silver.
 Value addition on account of services should not be less than
10%.
 Zarqar is a person who is engaged in the making process
only and not in the sale of jewelry.
 No adjustment of input tax is allowed.
Workshop
on Sales Tax
 Sales tax invoice, in case of jewelers, has also been
prescribed.
 The following records are prescribed to be maintained by a
jeweler.
 Register of goods dispatched / sold
 Sales tax invoices
Pearl Continental
21-22 July 2005
 Utility bills, rent receipts, wage payment records and proof of
all other business expenditures
 Monthly returns
 Purchase invoices / memos etc.
26
JEWELLERS
(Contd…)
GOVERNMENT OF PAKISTAN
Annex-B
[See rule- 27(2)]
Sales Tax Return - cum - Payment Challan
FOR JEWELLERS
Note: In case of revised return,insert
date of initial return.
Regular Revised
--
Pl. tick the relevant box
--
Please see the instructions on the reverse before you fill this return
Income Tax Bar
Association
Karachi
(01) Sales Tax
Registration No.
(02) N.T.N #
(03) Name of Jeweller
(05)
(04) Tax period
Sales
VALUE (Excluding Sales Tax)
(a)
Total value of Supplies
Rs.
(b)
Total value of exempt
Gold / Silver
Total taxable value
( 5a - 5b ) and tax
Rs.
(c)
(06)
Purchases
(b) Taxable Purchases
Workshop
on Sales Tax
Purchases
Rate
Rs.
15%
Rate
VALUE (Excluding Sales Tax)
(a) Taxable Imports
Exempt
(c) imports
/
Total
Rs.
15%
Rs.
15%
Rs.
0%
Rs.
(10)
Net amount payable
(including, arrears,
default surcharge
and penalties)
(08) Penalty for
late filing
TOTAL SALES TAX PAYABLE [ 5c+7+8 ]
SALES TAX DUE (Output Tax)
Rs.
SALES TAX PAID (Input Tax)
Rs.
Rs.
Head of Account
0220000 Sales Tax
Rs.
Refund claimed
Declaration
Year
Rs.
(07) Arrears/default
surcharge / recoveries Rs.
pointed out by audit
(09)
-Month
I declare that the entries in this return
are true and correct.
Signature
Name
Stamp
N.I.C #
--
-Date
Designation
Pearl Continental
21-22 July 2005
For Bank use
Serial No..........................................
Amount in words..................................................................
.............................................................................................
Bank Officer’s
signature .............................................................................
Amount
Received
Day
Month
Year
Rs.
Bank’s
Stamp
27
ELECTRIC POWER COMPANIES
Income Tax Bar
Association
Karachi
 Value of supply shall be the amount received by the company
(IPP, HUBCO, KAPCO) on account of Energy Purchase Price
only.
 Value of supply for KESC, WAPDA etc., shall be price of
electric power including charges, surcharges, late payment
Workshop
on Sales Tax
surcharges, rents, commissions, duties taxes etc..
 WAPDA and KESC shall deposit tax on collection basis.
 WAPDA and KESC shall adjust input tax paid relating to
purchases of previous tax period.
Pearl Continental
21-22 July 2005
 Others will follow the normal course.
28
ELECTRIC POWER COMPANIES
Income Tax Bar
Association
Karachi
(Contd…)
 The registered consumer shall be entitled to claim input tax
paid on electricity, evidenced by the electricity bill, which
should contain registration number and business address of
the consumer.
 WAPDA and KESC are required to submit returns by 21st of
Workshop
on Sales Tax
the following month.
 IPPs shall file returns by 25th of the following month
 Other persons engaged in supply of electric power shall file
returns by 15th of the following month
Pearl Continental
21-22 July 2005
 There are no specific requirements with respect to book
keeping.
29
NATURAL GAS COMPANIES
 The rule also applies to persons involved in the supply of
CNG and LPG.
Income Tax Bar
Association
Karachi
 The return shall be filed by 15th of the following month except
in case of companies supplying directly to consumers
charging bill on monthly basis, the return shall be filed by 15th
of the second following month.
 The sales tax is chargeable at open market price even if
supplied free of charge.
Workshop
on Sales Tax
 No specific conditions with respect to input tax adjustments in
the hand of Gas Companies.
 The consumer can adjust input tax on payment basis,
irrespective of the tax period.
 The bill should contain registration number and business
address of the consumer in order to constitute a valid invoice.
 No specific conditions with respect to record keeping.
Pearl Continental
21-22 July 2005
 Gas transmission and distribution companies are not required
to maintain records of daily stocks and sales.
30
SUPPLY OF SUGAR TO TRADING CORPORATION
OF PAKISTAN (TCP)
Income Tax Bar
Association
Karachi
 TCP will pay only value of sugar to the mills at the time of
successful grant of tender.
 The mill will issue a sales tax invoice at the time of actual
delivery. At this time, TCP will pay the amount of Sales Tax to
the mill.
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on Sales Tax
 In case of delivery for export, mill will issue zero-rated tax
invoices.
 The mill will disclose its activities in the month of issuing
invoices.
Pearl Continental
21-22 July 2005
 This rule deviates from basic principles of charging sales tax,
tax period and filing of return.
31
SUPPLY OF FOOD
 This rule applies to:
Income Tax Bar
Association
Karachi
Workshop
on Sales Tax

Every person or establishment supplying food, drinks
and other eatables to canteens, messes or to any
organization, institution or person.

Clubs, caterer, hotel or restaurants (other than those
located in hotels), etc..
 The rate of tax is 15% (tax fraction).
 Minimum threshold of Rs. 5 million is applicable.
 Due date for filing return is 15th of the next month.
Pearl Continental
21-22 July 2005
 In case of clubs charging bill on monthly basis, due date of
filing returns is 15th of the second following month.
32
SUPPLY OF FOOD
Income Tax Bar
Association
Karachi
(Contd…)
 No specific conditions with respect to input tax adjustment.
 All prescribed records shall be maintained with addition of
menu card showing prices of cash item or combination of
food.
Workshop
on Sales Tax
 The price as per menu card shall be inclusive of sales tax.
 Use of Fiscal Electronic Cash Register or issuance of
computerized invoices also allowed.
Pearl Continental
21-22 July 2005
 Daily gross take should be recorded and maintained.
33
SUPPLY OF FOOD
(Contd…)
ANNEX-A
[See rule 53(3)]
Income Tax Bar
Association
Karachi
SALES TAX INVOICE (BILL)
Sales Tax Registration No._______________
M/s.
—————————————————————————————————
(NAME & ADDRESS OF SUPPLIER OF FOOD)
Workshop
on Sales Tax
Book No.________________
Invoice No. ______________________
Table/Room No.__________
Date__________
Time _________
PARTICULARS OF FOOD SUPPLIED/SOLD
S. No.
Item
Quantity
Rate
(Rs.)
Amount
charged (Rs.)
TOTAL :
Pearl Continental
21-22 July 2005
(NB: This invoice / bill includes amount of sales tax).
Signature of Authorised Person
34
TAXABLE SERVICES
Income Tax Bar
Association
Karachi
 This rule applies to advertisers, courier companies, custom
house agents, hotels, ship-chandlers and stevedores.
 No minimum threshold with respect to turnover is available.
 Sales tax @ 15% is leviable.
Workshop
on Sales Tax
 Due date of filing return is 15th of the following month.
 No specific conditions with respect to input tax adjustment.
 No specific requirement with respect to maintenance of
records.
Pearl Continental
21-22 July 2005
 Records are record should be retained for a period of 5 years.
35
SPECIFIC PROVISION
Income Tax Bar
Association
Karachi
Workshop
on Sales Tax
 Value of supply for custom-house agent shall be the amount
received for providing services only. It shall be exclusive of
any amount received on account of transportation,
demurrage, wharfage, duties, excise, etc., which the agent
pays on behalf of his clients.
 Minimum values of various services offered by custom house
agents are prescribed ranging from Rs. 500 to Rs. 2000.
 Sales tax numbers and licenses number should be quoted on
Goods Declaration.
 Photocopy of last month’s return should also be appended
with Goods Declaration.
Pearl Continental
21-22 July 2005
 Sales tax charged by the agent is adjustable as input tax in
the hand of the client.
36
SHIP-CHANDLERS
Income Tax Bar
Association
Karachi
 Value of supply shall be the amount received on account of
services provided only.
 It shall be exclusive of any amount received as reimbursement of payments made on behalf of the client.
Workshop
on Sales Tax
Pearl Continental
21-22 July 2005
37
STEEL MELTERS AND RE-ROLLERS
Income Tax Bar
Association
Karachi
 Sales Tax @ 15% is leviable.
 Production of steel melter shall be calculated at the rate of
one metric ton ignotes or billets per 800 units of electricity
consumed.
Workshop
on Sales Tax
 Minimum value addition shall be Rs. 3200 per metric ton
where the sales tax invoice of local scrap is not available.
 Minimum value addition shall be Rs. 2200 per metric ton
where the sales tax invoices or GD (for imported) scrap is
available. Adjustment of input tax u/s 7 is allowed.
Pearl Continental
21-22 July 2005
38
STEEL MELTERS AND RE-ROLLERS
(Contd…)
 In case of combination of scrap (i.e. imported, with invoice
Income Tax Bar
Association
Karachi
and without invoice) the liability shall be determined
proportionately.
 Production of steel re-roller shall be calculated at the rate of
one metric ton MS product per 130 units of electricity
consumed.
Workshop
on Sales Tax
 Minimum value addition in case of re-rollers shall be Rs. 535
per metric ton.
 No specific requirements with respect to maintenance of
records or filing of return.
Pearl Continental
21-22 July 2005
 Detail of production in prescribed format is required to be
submitted alongwith the return.
39