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030512
Sales Tax Ruling/
Instruction No.11/2003
GOVERNMENT OF PAKISTAN
REVENUE DIVISION
CENTRAL BOARD OF REVENUE
(SALES TAX WING)
C.No.3(19)STP/2000
Islamabad, the 12th May, 2003.
To:
The Collectors,
Sales Tax & Central Excise,
Peshawar, Lahore, Rawalpindi,
Karachi (East), Karachi (West), Gujranwala.
The Collectors,
Customs, Sales Tax & Central Excise,
Hyderabad, Multan, Quetta.
The Collector,
Collectorate of Sales Tax,
Faisalabad.
The Collector of Sales Tax,
Office of the Director General,
Large Taxpayers Units,
KARACHI.
Subject:- LEVY OF SALES TAX ON VALUE INCLUSIVE OF WITHHOLDING TAX PAID AT IMPORT
STAGE AS FULL AND FINAL LIABILITY OF INCOME TAX.
The Central Board of Revenue had in consultation with Justice Division issued a
letter No. 3(19)STP/2000 dated 27.02.2001, that Withholding Tax on the charges
of gas, being adjustable, was not liable to sales tax as per provisions of
section 2(46) of the Sales Tax Act, 1990. Later on, with reference to
clarification sought by certain Associations of importers, the Board vide letter
C.NO. 3(19)STP/2000 dated 23.07.2001 also applied this ruling in case of
importers who pay Withholding Tax (Income Tax) as full and final liability of
income tax at the time of import.
2. A number of registered persons invited the attention of Central Board of
Revenue to the defination of value of supply mentioned in clause (a) of section
2(46) of the Sales Tax Act, 1990, vide which the value of supply means the
consideration in money including all Federal and Provincial duties & taxes. They
contended that the clarification issued by the Board vide C.No.3(19)STP/2000
dated 23.07.2001 was not legally tenable as the Withholding Tax paid by the
importers at the import stage was full and final liability of Income Tax and was
to be included in the value of supply as per above referred provisions of the
Sales Tax Act, 1990. Accordingly, a reference was sent to the Justice Division
which after a proper examination has ruled that sales tax in terms of section
2(46) of the Sales Tax Act, 1990, is leviable on the value of supply inclusive
of non-adjustable Withholding Tax paid as full and final liability, under the
Income Tax Ordinance, on goods at import stage. In view of this contention of
the Justice Division, the Central Board of Revenue is pleased to withdraw its
letter No. 3(19)STP/2000 dated 23.07.2001 and rules that sales tax is leviable
on value of supply which includes all Federal, (Withholding Tax etc), Provincial
and other taxes at import or any subsequent stage of transaction of imported
goods.
(Dr. Kamal Azhar Minhas)
Secretary (ST-L&P)
Tel: 9205311, Fax: 9215418
E-mail:stp@cbr.gov.pk
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