Zero Rating of Hand-Knotted Carpets Rules, 2001
28th November, 2001
In exercise of the powers conferred by section 71 of the Sales Tax Act, 1990, the Federal Government is pleased to make the following rules, namely :-
1. Short title, application and commencement.-
(1) These rules may be called the Zero-rating of Hand-Knotted Carpets Rules, 2001.
(2) They shall apply to supplies of hand-knotted carpets by registered persons to foreign nationals against payment in foreign exchange through a foreign credit card for subsequent export as personal baggage of the foreign nationals.
(3) They shall come into force at once.
(1) In these rules, unless there is anything repugnant in the subject or context,-
(a) "Act" means the Sales Tax Act, 1990;
(b) "Carpet" means a hand-knotted carpet of Pakistan origin;
(c) "foreign currency" means foreign currency as defined in clause (c) of section 2 of the Foreign Exchange Regulation Act, 1947 (VII of 1947);
(d) "foreign credit card" means a credit card issued outside Pakistan by a foreign bank or foreign credit card company, payment of which is made in foreign exchange;
(e) "foreign national" means a person who has nationality other than of Pakistan, and holds a valid foreign passport at the time of visit to pakistan;
(f) "foreign passport" means a valid passport of a country other than Pakistan;
(g) "Import and Export Procedure Order" means the Import and Export Procedure Order for the time being in force, issued by the Ministry of Commerce, Government of Pakistan;
(h) "registered supplier" means a person registered under the Act, making supplies of hand-knotted carpets of Pakistan origin;
(i) "valid identification" means an officially issued document or card such as an identity, a driving license or service card, bearing a paragraph by which the holder thereof can be positively identified;
(j) "zero-rated invoice" means a zero-rated invoice issued under sub-rule (20) of rule 4.
3. Supply deemed to be export.-
A supply of carpet under these rules shall be deemed to be an export for the purposes of section 4 of the Act, provided the procedure prescribed in these rules is observed and foreign currency against the supply is received in terms of rule 6.
4. Issuance of zero-rated tax invoice.-
(1) Any foreign national desirous of taking a zero-rated supply of carpets from a registered supplier shall make payment in foreign currency through a foreign credit card and present his foreign passport or valid identification to the supplier for noting the particulars in the invoice.
(2) The supplier shall issue a zero-rated tax invoice, mentioning therein the name, address and passport number of the foreign buyer, price of each carpet in foreign currency, the number of the foreign credit card and the name of its issuing authority besides the particulars required under section 23 of the Act.
(3) The foreign national shall sign a receipt-cum-undertaking in the form as set out in the Annexure to these rules.