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020713
GOVERNMENT
OF PAKISTAN REVENUE DIVISION CENTRAL BOARD OF REVENUE (SALES TAX WING)
Sales Tax Ruling/Instruction No.53/2002
C.No.3(36)STP/99(Pt-1).
Islamabad, the 13th July, 2002.
To: M/s Mahboob Sheikh & Co.,
Chartered Accountants,
Near Auto Plaza, Dera Adda,
L.M.Q. Road,
Multan
Subject:-
CLARIFICATION IN RESPECT OF SECTION 73 OF THE SALES TAX ACT, 1990.
I am directed to refer to your
letter dated 06.03.2002 on the subject cited above and to say that the issue relating to
payment by ‘crossed travelers cheques’ has been examined in the Board.
2. Under section 73 of the Sales Tax Act, 1990, input tax credit is admissible in
case of transactions exceeding Rs.50,000 (excluding utility bills) when payment is made
through a crossed cheque, crossed bank draft, pay order or any other banking instrument
showing transfer of payment from the business account of the buyer in favour of the
seller. Therefore, crossed travelers cheques would be acceptable for the purpose of
section 73 only if they fulfill the said requirements, i.e.:-
(i) issuance from the business account of the buyer; and
(ii) crossed in the name of the seller.
3. Travelers cheques, whether crossed or otherwise, which do not fulfill the above
requirements cannot be accepted for taking input adjustment under section 73.
(DR. ASHFAQ AHMED TUNIO)
Secretary (ST-L&P)
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