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020711
GOVERNMENT
OF PAKISTAN (REVENUE DIVISION) CENTRAL BOARD OF REVENUE (SALES TAX WING)
SALES TAX RULING/INSTRUCTIONS No. 49/2002
C. No. 3(15)STP/99.Vol-I
Date: 11th July, 2002.
To: 1. The Collector,
Collectorate of Sales Tax & Central Excise,
Karachi (East/West)/Lahore/Gujranwala/Rawalpindi/Peshawar.
2. The Collector,
Collectorate of Customs, Sales Tax &, Central Excise,
Hyderabad, Multan, Quetta.
3. The Collector,
Collectorate of Sales Tax,
Faisalabad.
Subject:
Refund Of Sales Tax On Packing Material Used In Rice Exported From Pakistan.
I am directed to refer to the
subject cited above and to say that after issuance of Board’s Ruling/Instructions No.
16/2002, dated 25.02.2002 and 28/2002, dated 08.04.2002 a number of representations have
been received from various quarters regarding refund of sales tax on packing material used
in exported rice. Consequently, the entire issue has been reexamined in the Board, keeping
in view the difficulties of the exporters, the policy of the Government not to levy tax on
exported goods and Board’s letters C. No. 2(98)STP/95, dated 27.08.1998 and
15.09.1998 (copies enclosed).
3. Globally, sales tax (VAT) is collected under the ‘principle of
destination’ to avoid double taxation of exported goods. In Pakistan, temporary
import of raw materials and packing material is allowed for the purpose of promoting
exports. Under the DTRE scheme, exporters can import or purchase locally goods for use in
the manufacture of exportable goods without payment of duties or sales tax. Thus, there is
a general policy not to levy sales tax on exported goods.
4. Under the Sales Tax Act, 1990, the charging sections (sections 3, 3-A and 4) are
independent of each other. The Federal Government can grant exemption from the tax under
section 13 on supply or import of goods, notwithstanding the provisions of section 3 of
the Act. Thus the provisions of section 13 are not applicable on the goods subjected to
zero-rate of tax under section 4. Even otherwise, under section 13(4) of the Act, a person
who does not desire to avail any tax exemption can apply for voluntary registration and
pay sales tax under the provisions of section 3. An exporter of exempt goods who obtains
sales tax registration may be considered to have opted to pay tax under section 13(4),
thus availing zero-rating under section 4.
5. In view of the above considerations, Board is pleased to direct that all goods,
whether taxable under section 3 or exempt under section 13 are to be subjected at
zero-rate of sales tax on their export as per provisions of section 4 of the Act. Payment
of refund shall be governed under SRO 417(I)/2000, dated 20.06.2000. The aforementioned
rulings may therefore, be treated as modified accordingly, and the past practice of
sanction of sales tax refund to sales tax registered exporters on the packing material
used in packing of exported rice may be continued.
(Dr. Ashfaq Ahmed Tunio)
Secretary (ST L&P)
GOVERNMENT
OF PAKISTAN CENTRAL BOARD OF REVENUE
(Sales Tax Wing)
C.No.2 (98) STP/95
Islamabad, the 27th August, 1998.
To: The Collector of Sales
tax (West)
St. 18/A, Block 6,
NIPA Chowrangi,
Universty Road,
Gulshan-e-Iqbal KARACHI.
Subject: -
REFUND CLAIM UNDER SECTION 10 OF SALES TAX ACT, 1990.
I am directed to refer to
Collectorate of Sales Tax (West) Karachi ’ s letter No. 16/12-S. Tax (W) tech/98,
dated 11th July, 1998, on the above subject and to say that, in terms of section 2(16) of
the Sales Tax Act, 1990. the process of “manufacture” includes packaging,
re-packing or preparation of goods in any other manner.
2. Since the commodities (fish/rice) are reported to have been packed in the material
for which zero-rating has been claimed, it is to be considered as a manufacturing activity
and liable to sales tax/ zero-rating in term of relevant provisions of the Act, whichever
applicable. The Board, therefore, confirm the viewpoint of the Collectorate in this
regard.
(Muhammad Tahir)
Secretary (STP)
GOVERNMENT
OF PAKISTAN CENTRAL BOARD OF REVENUE
C.No.2 (98) STP/95.pt.
Islamabad, the 15th September, 1998.
To: The Collector
Collectorate of Sales Tax,
House No. 90, Street No. 96,
I-8/4 ISLAMABAD
Subject: -
CLARIFICATION REGARDING ADMISSIBILITY OF REFUND.
I am directed to refer to
Collectorate of Sales Tax Rawalpindi’s letter No. ST/R/8/342/97/1290 dated 25.8.1998
on the above subject to say that since M/s Olympics Socks and Textile (Pvt) Ltd., are not
availing area-related exemption and are registered with sales tax department, they are
entitled to zero-rate their exports.
2. Packaging is covered by the definition of manufacture. M/s Dune International
(Pvt) Ltd, a registered person, are also entitled for refund of sales tax paid on packing
material used for packing of rice exported of Pakistan.
(Muhammad Tahir)
Secretary (STP)
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