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GOVERNMENT OF
REVENUE DIVISION
CENTRAL BOARD OF REVENUE
***
NOTIFICATION
(Sales Tax )
S.R.O. 485(I)/2004.—In exercise of the powers conferred by clause (xxi) of sub-section (2) of section 37 of the Central Excises Act, 1944 (I of 1944), section 219 of the Customs Act, 1969 (IV of 1969), section 50 of the Sales Tax Act, 1990, read with sub-section (2) of section 8, section 9, 14, 21 and 28, clause (c) of sub-section (1) of section 22, section 26, sub-section (6) of section 47A, and sections 48 and 52 thereof, the Central Board of Revenue is pleased to make the following rules namely:-
1. Short title, application and commencement.—(1) These Rules may be called the Sales Tax Rules, 2004.
(2) They shall be applicable to the persons prescribed in the respective chapters.
(3) They shall come into force on the first day of July, 2004, except chapter V, which shall come into force on such date as is notified by the Central Board of Revenue by notification in the official Gazette.
CHAPTER I
REGISTRATION, VOLUNTARY
REGISTRATION
AND DE-REGISTRATION
2. Application.—The provisions of this chapter shall apply to the following persons, namely:—
(a) a person required to be registered under the Act;
(b) a person required, under any other Federal or Provincial law, to be registered for the purpose of any duty or tax collected or paid as if it were sales tax under the Act;
(c) a person who opts for voluntary registration;
(d) a person who is subject to compulsory registration;
(e) a person who is already registered and requires a change in the name, address or other particulars of registration;
(f) a person who is blacklisted or whose registration is suspended; and
(g) a person who is required to be de-registered.
3. Definitions.—(1) Unless there is anything repugnant in the subject or context, for the purposes of this chapter,—
(a) "Act" means the Sales Tax Act, 1990;
(b) “Annex” means an annex appended to this chapter;
(c) “Central Registration Office“ means the office established for the purposes of centralized sales tax registration;
(d) “Collector” means the Collector of Sales Tax having jurisdiction;
(e) “Local Registration Office“ means the Collectorate of Sales Tax having jurisdiction;
(f) "prescribed form" means the S.T. series of forms prescribed under this chapter;
(g) "registration certificate" means a certificate of registration in the form set out at Annex B;
(h) “STARR system” means the Sales Tax Automated Refund Repository computer system; and
(i) “transmit” means the transmission of data between Central Registration Office and Local Registration Office, through electronic or any other means.
(2) Any terms or expressions used but not defined here shall have the same meaning as are assigned to them under the Act.
4. Requirement of registration.—The following persons engaged in making of taxable supplies in Pakistan (including zero-rated supplies) in the course or furtherance of any taxable activity carried on by them, if not already registered, are required to be registered under the Act and this chapter, namely:—
(a) a manufacturer whose annual turnover from taxable supplies, made in any period during the last twelve months ending any period, exceeds five million rupees;
(b) a retailer whose value of supplies, in any period during the last twelve months ending any period, exceeds five million rupees;
(c) an importer;
(d) a wholesaler (including dealer) and distributor; and
(e) a person required, under any other Federal or Provincial law, to be registered for the purpose of any duty or tax collected or paid as if it were a levy of sales tax to be collected under the Act;
5. Application for registration.—(1) A person required to be registered under the Act or this chapter shall, before making any taxable supplies, apply for registration in the prescribed form S.T.-1, which shall be submitted, duly filled in as per instructions printed thereon, through registered mail (acknowledgment due), or through courier service, to the Local Registration Office having jurisdiction–
(a) in case of a corporate person, that is, a listed public limited company or an unlisted public limited company or a private limited company, the place where the registered office is located; and
(b) in case of a non-corporate person, the place where the business is actually carried on:
Provided that a non-corporate person, having a single manufacturing unit, whose business premises and manufacturing unit are located in different areas, shall apply to the Collector of the area in whose jurisdiction his manufacturing unit is located:
Provided further that a corporate person shall have the option to apply for transfer of registration to the Local Registration Office having jurisdiction where the place of business is located:
Provided further that, from such date as may be specified by the Board, the application for registration may be submitted electronically.
(2) Where an applicant has unsold or un-used stocks of tax-paid inputs on which he desires to claim the benefit of section 59 of the Act, he shall declare such stocks to the Collector in a statement in the form set out at Annex A, to be appended with his application for registration.
(3) Where the application for registration is complete in all respects, the Local Registration Office shall transmit the same to the Central Registration Office.
(4) The Central Registration Office, after conducting such verification, inquiry or investigation as is deemed necessary, may register the applicant and issue a certificate of registration containing the registration number to the applicant in the form as set out in Annex B.
6. Voluntary registration.—(1) A person who makes or intends to make taxable supplies but is not required to be registered under this Act, may make an application for registration to the Local Registration Office in the prescribed form S.T.-1, in the manner prescribed by rule 5.
(2) The Central Registration Office may register the applicant after such verification, inquiry or investigation as is deemed necessary and a certificate of registration containing his registration number shall be issued to the applicant in the form as set out in Annex B.
(3) A person who applies for voluntary registration shall observe and be bound by all the provisions of the Act and rules made thereunder.
7. Compulsory registration.—(1) If a person, who is required to be registered under this Act, does not apply for registration and the Local Registration Office or any other office as may be authorised by the Central Board of Revenue or the Collector in this behalf, after such inquiry as deemed appropriate, is satisfied that such person is required to be registered, it shall submit a written report to the Local Registration Office.
(2) On receipt of such report, the Local Registration Office shall issue notice to such person in the form set out in Annex C.
(3) In case the Local Registration Office receives a written reply from the said person within the time specified in notice, contesting his liability to be registered, the Local Registration Office shall grant such person opportunity of personal hearing, if so desired by the person, and shall thereafter pass an order whether or not such person is liable to compulsory registration. A copy of the said order shall invariably be given to the said person.
(4) Where the person to whom a notice is given under sub-rule (2), does not respond within the time specified in notice, the Local Registration Office shall transmit the particulars of the person to the Central Registration Office, which shall compulsorily register the said person and allot him a registration number which shall be delivered to the said person either in person through Local Registration Office or through registered mail (acknowledgement due) or through courier service.
(5) A compulsory registered person is required to comply with all the provisions of the Act and rules made thereunder from the date of compulsory registration, and in case of failure to do so, the Local Registration Office may issue notice under section 25 of the Act for production of records or documents and appearance in person to assess the amount of sales tax payable under the provisions of section 11 of the Act, and take any other action as required under the law against such person.
Provided that if it is subsequently established that a person was not liable to be registered but was wrongly registered under this rule due to inadvertence, error or misconstruction, the Central Registration Office, on the recommendation of the Local Registration Office, shall cancel such registration and such person shall, subject to the provisions of section 3B of the Act, not be liable to pay any tax, additional tax or penalty under any of the provisions of the Act or rules made thereunder.
8. Change in the particulars of registration.—(1) In case there is a change in the name, address or other particulars as stated in the registration application or certificate, the registered person shall notify the change in the prescribed form S.T.-2 to the Local Registration Office within fourteen days of such change.
9. Transfer of Registration.—(1) The Central Registration Office may, subject to such conditions, limitations or restrictions as it may deem fit to impose, by an order, transfer the registration of a registered person from the jurisdiction of one Collector to another Collector or, as the case may be, to the Director General of Large Taxpayers Unit.
(2) On transfer of registration,—
(a) all the records and responsibilities relating to such registered person shall be transferred to the Collector or, as the case may be, to the Director General of Large Taxpayers Unit in whose jurisdiction the registration has been so transferred; and
(b) notwithstanding the actions already taken, being taken or otherwise pending immediately before the transfer in respect of such registered person under any of the provisions of the Act or the rules made thereunder in the Collectorate from where his registration has been transferred, the Collector, or as the case may be, the Director General of Large Tax Payers Unit, in whose jurisdiction the registration is so transferred shall exercise the jurisdiction over such person in the manner as if he always had such jurisdiction.
(3) In case of transfer of registration, the Central Registration Office shall issue a new certificate of registration to the taxpayer in lieu of the previous certificate, and such new certificate shall contain a reference to the previous certificate of registration.
(4) In case a registered person intends to shift his business activity from the jurisdiction of one Collector to another, or he has any other valid reason for such transfer, he shall apply to the Central Registration Office for transfer of his registration and the provisions of this rule shall, mutatis mutandis, apply to such cases.
10. De-registration.—(1) Every registered person who ceases to carry on his business or whose supplies become exempt from tax, shall apply to the Local Registration Office for cancellation of his registration in form S.T.-3, and the Local Registration Office, may recommend to the Central Registration Office to cancel the registration of that person from such date as may be specified, but not later than three months from the date of such application or the date all the dues outstanding against such person are deposited by him, whichever is the later:
(2) A registered person whose total taxable turnover during the last twelve months remains below the limit specified in sub-rule (2), may apply to the Local Registration Office for de-registration in form as set out at S.T.-3.
(3) The Local Registration Office, upon completion of any audit or inquiry which may have been initiated consequent upon the application of the registered person for deregistration shall direct the applicant to discharge any outstanding liability which may have been raised therein by filing a final return under the provision of section 28.
(4) If a registered person fails to file tax return under section 26 for six consecutive months, the Local Registration Office may, without prejudice to any action that may be taken under any other provision of the Act, after issuing a notice in writing and after giving an opportunity of being heard to such person, recommend to the Central Registration Office for cancellation of the registration after satisfying itself that no tax liability is outstanding against such person.
(5) The obligations and liabilities of the person whose registration is cancelled under sub-section (1) relating to the period when he conducted business as a registered person shall not be affected by the fact that his registration has been cancelled or that he has ceased to be a registered person.
11. Blacklisting and suspension of registration.—(1) Where a Collector has reasons to believe that a registered person is found to have issued fake invoices, or evaded tax or has committed tax fraud, he may, after confirming the facts and the veracity of the information and giving opportunity to such person to clarify his position, blacklist such person or suspend his registration.
(2) The order for blacklisting or suspending the registration of a registered person shall be in writing and a copy thereof shall be communicated to the registered person, the Central Registration Office and to the STARR system.
(3) The inquiry in such cases shall be completed within ninety days, and show cause notice for recovery of any evaded amount of tax and for contravention of the provisions of the Act may be issued within ninety days of completion of inquiry:
Provided that where the records required for completion of the inquiry are not produced by the registered person or his suppliers, the period of ninety days for completion of the inquiry shall be deemed to have been extended.
(4) In case a registered person, who has been blacklisted or whose registration has been suspended under sub-section (1) without getting an opportunity of being heard, approaches the Collector for withdrawing the order for blacklisting or suspension of registration, the Collector may, after conducting such inquiry as he may deem fit, including consultation with the concerned trade association or body, withdraw such order subject to his satisfaction that such person is not engaged in the activities specified in sub-rule (1).
CHAPTER II
FILING OF MONTHLY
RETURNS
12. Application.—The provisions of this chapter shall apply to all registered persons required to file a return under section 26 of the Sales Tax Act, 1990.
13. Definitions.—In this chapter, unless there is anything repugnant in the subject or context,-
(a) "Act" means the Sales Tax Act, 1990;
(b) "Agreement" means the agreement executed between the Board and the Bank for the purposes of payment of tax and submission of tax returns;
(c)
"Bank" means the National Bank of
(d) “Collectorate” means the Collectorate of Sales Tax having jurisdiction;
(e) "nil return" means a return indicating that no sales tax is payable by the registered person in respect of the tax period to which the tax return relates;
(f) "return" means the sales tax return-cum-payment challan in the form as annexed to this chapter; and
(g) “transmit” means to transmit data through a computer network or connection or otherwise.
(2) All other terms and expressions used but not defined in this chapter shall have the same meanings as are assigned to them under the Act.
14. Filing of Returns.—(1) Every registered person shall file the return in triplicate, in accordance with the instructions printed on its reverse, in a Bank located in the jurisdiction of the Collectorate where he is registered:
Provided that a person registered in the jurisdiction of a Large Taxpayer Unit, shall at the time of filing his return, legibly and conspicuously indicate the expression "LTU" on the top right corner of the return.
Provided further that registered persons working under a special procedure notified under section 71 of the Act by the Federal Government wherein a separate return form is prescribed, shall file returns in such form and in such manner as may be prescribed therein.
(2) The registered person shall deposit the amount of sales tax due for the tax period at the time of filing of return in the Bank.
(3) In case no amount of sales tax is payable by the registered person, he may file a nil return without depositing any amount in the Bank, or in accordance with chapter I of the Sales Tax Special Procedures, 2004.
15. Receipt of return by the Bank.—(1) The Bank official shall ensure that the particulars entered in all the three copies of the return are identical and that the amount deposited by the registered person tallies with the amount indicated as "TOTAL SALES TAX PAYABLE" in the return, and shall thereafter sign and stamp the return indicating the date of payment of tax and submission of tax return.
(2) The Bank shall forward the original copy of the return to the concerned Collectorate of Sales Tax or the Large Taxpayers Unit, as the case may be, and the duplicate shall be delivered to the registered person as a token of receipt of payment of sales tax and filing of return and the third copy shall be retained by the Bank for its record.
(3) In case of payment through cheque, pay order or bank draft, the Bank will receive the return in triplicate along with the instrument of payment for the amount of tax payable indicated in the return and issue a provisional acknowledgement receipt to the registered person.
(4) On clearance of the instrument, the Bank official shall sign and stamp the return indicating the date on which payment is received by the Bank. In cases where the payments are received through pay order or bank draft, the bank shall affix two stamps on the return indicating the date on which the pay order or bank draft was received for clearing and the date on which the pay order or bank draft was cleared for payment by transfer.
(5) The date of payment, in case of payment through cash or cheque, shall be treated as the date on which the payment is received by the bank. In case of payment through pay order or Bank draft, the date on which the pay order or Bank draft is tendered at the Bank counter shall be treated as the date of payment and where the pay order or Bank draft, so tendered at the Bank counter, is not cleared on its first presentation for Bank clearing, the registered person shall, without prejudice to any other action, be liable to pay additional tax and penalties prescribed under the Act for late payment of sales tax.
16. Payment of service charges to the Bank.—(1) The Bank shall charge ten rupees per return (including nil returns) as service charges from the Collectorates having jurisdiction in the area where the bank branches are located.
(2) For the purpose of claiming service charges referred to in sub-rule (1), the Manager of the main branch of the Bank shall submit the claim to the Assistant Collector, Assessment and Processing Division of the concerned Collectorate in the first week of the following month supported by a statement indicating date, number of returns received, number of returns submitted to the Collectorate, amount of sales tax collected and amount of sales tax deposited in the State Bank of Pakistan.
(3) The Assistant Collector, Assessment and Processing Division shall verify the statement submitted under sub-rule (2) from the Accounts Section of the Collectorate and from his own record. If the claim is found to be in order and the Assistant Collector is satisfied that the Bank has fulfilled its responsibility under clauses (iv), (vi) a and b of the Agreement, he shall sanction the claim and issue a cheque within a week from the date of submission of the claim, provided that in case of delay by the Collectorate, it shall pay a penalty @ 15% per annum for the amount late sanctioned.
(4) If the Bank fails to fulfill the conditions specified in clause (iv), clause (vi), a, or b of the Agreement, the Assistant Collector shall deduct the amount of penalty leviable thereunder on the Bank at the rate of 15% per annum against the amount late deposited in the State Bank of Pakistan from the service charges admissible to the Bank.
(5) If the returns are not submitted to the Collectorate within forty-eight hours of the receipt thereof returns in the designated branches of the Bank, the service charges in respect of the returns submitted late shall also be deducted and the remaining amount, if any, shall be sanctioned by the Assistant Collector and cheque therefore will be issued to the Bank.
(6) For deduction of any amount under sub-rule (4), the Assistant Collector shall intimate the Bank the reasons thereof within seven days of deduction.
(7) Where it is not clear as to whether deduction should be made, the Assistant Collector shall require the Bank for clarification before taking a decision.
(8) All public holidays and the number of days the Collectorate is prevented from functioning due to the factors beyond its control, shall be excluded while calculating delay in sanctioning the claim for service charges.
(9) Where the Assistant Collector requires any clarification from the Bank, the time taken by the Bank for this purpose shall be excluded from the time specified for sanctioning the service charges claim.
17.
Electronic filing of return and transmission of
data from bank.—Notwithstanding
anything contained in this chapter, the Board may, by an order, specify the
manner and procedure for filing of return by electronic means, and may also
specify the manner and particulars of the data relating to sales tax returns
received by the Bank which shall be transmitted to the Collectorate or to the
LTU, as the case may be.
CHAPTER III
CREDIT
AND DEBIT NOTE AND
DESTRUCTION
OF GOODS
18.
Application.–The provisions of this chapter apply where a
registered person has issued a tax invoice in respect of a supply made by him
and as a result of any of the events specified in section 9 of the Sales Tax
Act, 1990, the amount shown in the tax invoice or the return needs to be
modified.
19.
Issuance
of Credit and Debit Note.–(1)
Where a registered person has made a supply, and such supply or part thereof is
cancelled or returned or its value is changed within one hundred and eighty
days of such supply, the seller shall issue a Credit Note (in duplicate) in
respect of such supply or part thereof, indicating its value determined on the
basis of the value of such supply as shown in the tax invoice issued by the
supplier, the amount of sales tax paid thereon, and number and date of the
original tax invoice.
Provided that the
Collector may, at the request of the supplier, in specific cases, by giving
reasons in writing, extend the period of one hundred and eighty days by a
further one hundred and eighty days.
(2) The original copy of the
Credit Note shall be sent to the buyer and the duplicate copy shall be retained
for record.
(3) In case of return of goods by the buyer,
the buyer shall issue a Debit Note (in duplicate) in respect of such goods,
indicating their value, amount of sales tax charged thereon at the time of
their supply and the number and date of the tax invoice which was issued by the
supplier in respect of these goods, and shall send the original copy to the
supplier and retain the duplicate copy for his own record.
(4) In the case of supply of goods to an
unregistered person, sub-rule (2) shall not apply.
20.
Adjustment
of input and output tax.–(1) The buyer shall not be entitled to claim
input tax in respect of the supply which has been cancelled or returned to the
supplier or in respect of the amount of tax reduced.
(2)
Where the buyer has already
claimed input credit in respect of these goods, he shall reduce the amount of
input tax to that extent in his return for the tax period in which the supply
was cancelled, returned or modified.
(3)
The supplier shall on the
basis of the Credit Note issued by him, correspondingly reduce the amount of
output tax in his return for the tax period in which the supply or payment
thereof was received by him.
(4)
Where the goods relating to
such supply are subsequently supplied to the original buyer or some other
person with or without carrying out any repairs, the supplier shall charge
sales tax thereon in the normal manner and account for it in his return for the
period in which these goods were supplied.
21.
Destruction
of goods.–Where any goods are
returned by the buyer on the ground that the same are unfit for consumption and
are required to be destroyed by the supplier, the goods shall be destroyed after
obtaining permission from the Collector of Sales Tax having jurisdiction, and
under the supervision of an officer of Sales Tax not below the rank of an
Assistant Collector as may be deputed by the Collector for the purpose.
CHAPTER
IV
APPORTIONMENT OF INPUT
TAX
22.
Application.—The provisions of this
chapter shall apply to the registered persons who make taxable and exempt
supplies simultaneously.
23.
Definitions.—For the purpose of this chapter,—
(a)
"Act"
means the Sales Tax Act, 1990; and
(b)
"residual
input tax" means the amount of tax paid on raw materials, components and
capital goods being used for making taxable as well as exempt supplies but does
not include the input tax paid on raw materials used wholly for making taxable
or exempt supplies.