Sales Tax

 

Sales Tax Ready Reference

June 12, 2008 Update

 This update covers:-

-Budget SROs dated June 11, 2008: 523 to 542, 547 to 552;

-Finance Bill 2008;

-Budget Speech;

-Notes on Clauses of Finance Bill; and

-Salient Features of the Budget.

These are briefly explained as under:–

Part III – Notifications

1.    On page 7, SRO 609(I)/2004 dated July 16, 2004 has been deleted, having been rescinded by SRO 534(I)/2008 dated June 11, 2008. This fixed the minimum value for phosphatic fertilizers.

2.    On page 9, SRO 544(I)/2006 dated June 5, 2006 has been deleted, having been rescinded by SRO 531(I)/2008 dated June 11, 2008. This fixed the value of local coal at Rs. 670 pmt. In its place on page 8, is reproduced SRO 532(I)/2008 dated June 11, 2008 fixing the minimum value of taxable supply of local coal at Rs. 1,000 per tonne.

3.    On page 11, SRO 644(I)/2007 has been amended by SRO 537(I)/2008 dated June 11, 2008 to increase the special rates on import or supply of certain goods from 20% to 21% and from 17.5% to 18.5%.

4.    On page 18 onwards, SRO 509(I)/2007 has been amended by SRO 538(I)/2008 dated June 11, 2008. This is re: zero-rating for import and supply of various items.

5.    On pages 20 to 20P the following SROs have been deleted having been rescinded by SRO 550(I)/2008 dated June 11, 2008 (remaining matter has been re-arranged and pages have been renumbered):-

Rescinded

SRO Nos.            Subject

343(I)/2002            Exports by manufacturers, taxable & exempt goods

515(I)/2005            Zero-rating for cotton-seed etc.

527(I)/2005            Zero-rating for RM etc. for making plant & machinery

530(I)/2005            Zero-rating for import or supply of plant & machinery

531(I)/2005            Zero-rating for RM from local vendors by tractor manf.

537(I)/2005            Zero-rating for import and supply of soya bean meal

548(I)/2006            Zero-rating for Dairy & Stationery products and Trucks

551(I)/2006            Zero-rating for supply of compost (non-chemical fertilizer)

1204(I)/2006            Fat filled milk

1270(I)/2006            Import and supply of buses and special taxis

                    462(I)/2007               Zero-rating for sewing machines, bicycles, stationery.

6.    On page 20D, SRO 863(I)/2007 has been amended by SRO 540(I)/2008 dated June 11, 2008 to include acetic acid in the list of items for zero-rating of import of raw materials etc. for their manufacture.

7.    On page 20R, SRO 549(I)/2008 dated June 11, 2008 has been reproduced. This provides for zero-rating of various imports.

8.    On page 29D, SRO 645(I)/2007 dated June 27, 2007 has been deleted, having been rescinded by SRO 523(I)/2008 dated June 11, 2008. Thus abolishing the 17% fixed tax regime for commercial importers w.e.f. July 1, 2008.

9.    On pages 29A, SRO 645(I)/2006 dated June 21, 2006 has been deleted, having been rescinded by SRO 533(I)/2008 dated June 11, 2008. This abolishes the 30% value addition on import and supply of pesticides.

10.    On page 30B, SRO 647(I)/2007 has been amended by SRO 529(I)/2008 dated June 11, 2008. This is regarding exclusions from provision for adjustment of input tax upto 90% of output tax for electrical energy sector, petroleum, fertilizer, commercial importers, etc. etc.

11.    On page 35, SRO 559(I)/2006 dated June 5, 2006 has been deleted, having been rescinded by SRO 528(I)/2008 dated June 11, 2008. Thus abolishing the requirement for furnishing of summary of purchases and sales by manufacturers and suppliers of items including yarns, leather, carpets, surgicals and sports goods.

12.    On pages 36, SRO 543(I)/2006 dated June 5, 2006 has been deleted, having been rescinded by SRO 527(I)/2008 dated June 11, 2008. This abolishes the requirement of furnishing of summary of production and supplies by manufacturers and suppliers of sugar, tea, cigarettes, aerated waters, cements, and vehicles.

13.    On pages 50B to 50E, 54D and 54E, SROs 556(I)/2006, 29(I)/2007, 993(I)/2007, 995(I)/2007, 996(I)/2007, 1069(I)/2007, 1197(I)/2007, 66(I)/2008, 100(I)/2008, 220(I)/2008 and 222(I)/2008 have been deleted, having been rescinded by SRO 548(I)/2008. These SROs are re: appointment of officers with reference to various Regional Tax Offices, simultaneously a consolidated SRO 547(I)/2008 has been issued.

14.    On page 51, SRO 727(I)/2003 dated July 24, 2003 has been deleted, having been rescinded by SRO 548(I)/2008 dated June 11, 2008. The SRO was for appointment of Cost Accountants and Auditors of CBR as officers of Sales Tax.

15.    On page 54E, SRO 547(I)/2008 dated June 11, 2008 has been reproduced. This is for appointments of officers of Sales Tax and Federal Excise with reference to the various Regional Tax Offices.

16.    On page 58B(viii), SRO 524(I)/2008 dated June 11, 2008 has been reproduced. This provides a general amnesty by exemption to unregistered persons from sales tax, default surcharge and penalty for sales made prior to June 11, 2008 if they apply for registration by July 31, 2008 and thereafter file sales tax returns regularly and pay taxes due.

Part IV – Exemptions

17.   On pages 5, 7, 8, 9, 11, 12, 13, 14, 26, 32, 33, 34, 36, 37, 38, 41, 42, 47, 48, 50, 53, the following SROs have been deleted having been rescinded by SRO 552(I)/2008 dated June 11, 2008:-

            Rescinded

            SRO No.            Subject

608(I)/1997           Import by manufacturers for international tenders

614(I)/2000           Exemption to stocks declared upto October 15, 2000

675(I)/2000           Amnesty to distributors

714(I)/2000           CNG kits and components for vehicles

90(I)/2001             Machinery and goods by units in Export Processing Zones

91(I)/2001             Exemptions for leather industry

392(I)/2001           Amnesty for arrears of tax

395(I)/2001           Amnesty for various textile units’ tax arrears

456(I)/2001           Import of pharmaceutical raw materials

207(I)/2002            Import and supply of ships’ floating crafts

474(I)/2002            Imports of canola seed

555(I)/2002            Exemption to pharmaceutical products

267(I)/2003            Exemption to fertilizer plant and machinery

345(I)/2003            Exemption for dry fruits imported from Afghanistan

455(I)/2003            Exemption for Auto Spare Parts imported for PM sect.

591(I)/2003            Edible oil extracted from imported oil seeds

874(I)/2003            Import of equipments for PM House security

875(I)/2003            Import of equipment for President House security

890(I)/2003            Supply of milk

1024(I)/2003          Imported oilseeds, meant for sowing

16(I)/2004              Import of 30 Walkie Talkie sets by IB

217(I)/2004            Equipment imported by Intelligence Bureau

218(I)/2004            Equipment imported by Intelligence Bureau

234(I)/2004            Equipment for PM’s Security

673(I)/2005            Exemption to pharmaceutical raw materials

1035(I)/2005            Supply of goods for earthquake victims

501(I)/2006            Relief to manufacturers failing export targets

552(I)/2006            Supply of milk

758(I)/2006            Commercial catalogues, exemption to imports         

953(I)/2006            Posters etc. for earthquake victims

1205(I)/2006          Import and supply of iodized salt

135(I)/2008            Exemption to Margarine

                    193(I)/2008            Exemption on Certain Agricultural Tractors.

18.    On page 9, SRO 541(I)/2006 dated June 5, 2006 has been deleted, having been rescinded by SRO 541(I)/2008 dated June 11, 2008, thus withdrawing the concessional tax package of Rs. 500 at the time of activation in lieu of customs duty and sales tax on import of mobile telephone sets. In its place on page 8, SRO 542(I)/2008 dated June 11, 2008 has been reproduced to provide a similar package which would now cover only sales tax against Rs. 500 at the time of activation.

19.    On page 31, SRO 535(I)/2008 dated June 11, 2008 has been reproduced. This provides exemption on import and supply of various fertilizers.

20.    On page 32, SRO 536(I)/2008 dated June 11, 2008 has been reproduced. This provides exemption on import and supply of various active ingredients for pesticides.

21.    On page 35, SRO 539(I)/2008 dated June 11, 2008 has been reproduced. This exempts raw materials imported for manufacture of for manufacture of dextrose and saline infusion giving sets.

22.    On page 38, SRO 551(I)/2008 dated June 11, 2008 has been reproduced. This exempts various goods.

Part V – Rules

23.    On pages 1 onwards, a number of amendments have been made in the Sales Tax Rules, 2006 by SRO 530(I)/2008 dated June 11, 2008.

24.    Pages 77 and 78, containing the Refund of Sales Tax (On Export of Specified Goods) Rules 2006 have been deleted. These Rules have been rescinded by SRO 526(I)/2008 dated June 11, 2008.

Part VA – Special Procedure Rules

25.    On page 5 onwards, a number of amendments have been made in the Sales Tax Special Procedure Rules 2007 w.e.f. July 1, 2008 by SRO 525(I)/2008 dated June 11, 2008.

26.    Page 43, containing the Processing of Refund Claims of Large Taxpayers Rules 2007 has been deleted. These Rules have been rescinded by SRO 526(I)/2008 dated June 11, 2008.

Part IX – Budget Instructions

27.    On page 111 to 121, extract from Finance Bill, 2008 has been reproduced.

28.    On page 123, extract from Budget Speech, 2008 has been reproduced.

29.    On page 125 to 128, extracts from the Notes on Clauses of the Finance Bill, 2008 have been reproduced.

30.    On page 129 to 133, extract from the Salient Features of the Budget, 2008 has been reproduced.