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Sales Tax Special Procedures Rules, 2004


CONTENTS

Preamble and Rule 1

CHAPTER I SPECIAL PROCEDURE FOR FILING OF NIL RETURNS

CHAPTER II SPECIAL PROCEDURE FOR PAYMENT OF SALES TAX BY COMMERCIAL IMPORTERS ON VALUE ADDITION

CHAPTER III SPECIAL PROCEDURE FOR PAYMENT OF RETAIL TAX

CHAPTER IV SPECIAL PROCEDURE FOR PAYMENT OF SALES TAX BY JEWELLERS

CHAPTER V SPECIAL PROCEDURE FOR COLLECTION AND PAYMENT OF SALES TAX ON ELECTRIC POWER

CHAPTER VI SPECIAL PROCEDURE FOR COLLECTION AND PAYMENT OF SALES TAX ON NATURAL GAS

CHAPTER VII SPECIAL PROCEDURE FOR SUPPLY OF GINNED COTTON

CHAPTER VIII SPECIAL PROCEDURE FOR THE SPINNING INDUSTRY

CHAPTER IX SPECIAL PROCEDURE FOR SUPPLY OF SUGAR TO TRADING CORPORATION OF PAKISTAN

CHAPTER X SPECIAL PROCEDURE FOR PAYMENT OF SALES TAX ON SUPPLY OF FOOD

CHAPTER XI SPECIAL PROCEDURE FOR PERSONS PROVIDING OR RENDERING TAXABLE SERVICES

CHAPTER XII SPECIAL PROCEDURE FOR PAYMENT OF SALES TAX BY STEEL MELTERS AND RE-ROLLERS

CHAPTER XIII SPECIAL PROCEDURE FOR THE SHIP-BREAKING INDUSTRY

CHAPTER XIV SPECIAL PROCEDURE FOR ZERO-RATING OF HAND-KNOTTED CARPETS

Preamble and Rule 1

THE

SALES TAX SPECIAL PROCEDURES RULES, 2004

12th June, 2004

In exercise of the powers conferred by section 71 of the Sales Tax Act, 1990, read with clause (9) of section 2, sections 3, 3AA and 4, sub-section (2) of section 6, section 7A, clause (b) of sub-section (1) of section 8, clause (a) of sub-section (2) of section 13, sections 26AA and 34A, and the first and second provisos to section 45 thereof, the Federal Government is pleased to make the following rules, namely:—

1. Short title, application and commencement.¾(1) These rules may be called the Sales Tax Special Procedures Rules, 2004.

(2) They shall apply to such persons as are specified in the respective Chapter.

(3) These shall come into force on and from the 1st July, 2004, except Chapter VII, which shall come into force with immediate effect.

CHAPTER I SPECIAL PROCEDURE FOR FILING OF NIL RETURNS

1. Application : —The provisions of this Chapter shall apply to every registered person who files a nil return for any tax period.

2. Definitions : —(1) In this Chapter, unless there is anything repugnant in the subject or context,—

(a) “Act” means the Sales Tax Act, 1990;

(b) “Computer Section” means Computer Section of the Collectorate;

(c) “Collectorate” means the office of the Collector having jurisdiction;

(d) “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 return relates, and includes a null return and a return where carry-forward or refund is claimed;

(e) “Nil Return Receipt Counter” means a counter set up in the Collectorate for the purpose of receiving nil returns; and

(f) “null return” means a return which indicates that no transaction was made by the registered person during the tax period and no amount of tax is to be paid, refunded or carried forward.

(2) The words and expressions used, but not defined herein, shall have the same meaning as assigned to them in the Act.

3. Setting up of Nil Return Receipt Counters : —(1) The Collector of Sales Tax may set up one or more Nil Return Receipt Counters, in such offices of the Collectorate as he may deem necessary, to receive nil returns from registered persons which come under the jurisdiction of that Collectorate.

(2) The Collector of Sales Tax shall ensure that the location and timings of the Nil Return Receipt Counters are publicized in newspapers and displayed at a prominent place in the Collectorate.

4. Filing of nil returns in the Collectorate : —Every registered person intending to file a nil return under section 26 of the Act may, in lieu of filing a nil return under Chapter II of the Sales Tax Rules, 2004, file the nil return, in duplicate, in the form as set out in the Annexure to this Chapter, not later than the due date, at a Nil Return Receipt Counter in the Collectorate where he is registered.

5. Receipt of Nil Returns by the Collectorate : —(1) Before receiving a nil return at the Nil Return Receipt Counter, it shall be ensured by the person receiving the nil return that all the particulars entered in both of the copies of the nil return are identical and shall thereafter sign and stamp both copies of the nil return indicating the date of submission of the nil return.

(2) The person receiving a nil return shall immediately forward the original copy of the nil return to the Computer Section and give the duplicate copy thereof, duly signed, stamped and indicating the date of submission, to the registered person as a receipt of filing of the return.

6. Computer feeding : —All nil returns received in the Computer Section will be entered into the computer without delay, provided that priority shall be given to feeding of returns of refund claimants.

CHAPTER II SPECIAL PROCEDURE FOR PAYMENT OF SALES TAX BY COMMERCIAL IMPORTERS ON VALUE ADDITION

1. Application : —The provisions of this Chapter shall apply to persons registered exclusively as commercial importers under the Act.

2. Definitions.¾(1) In this Chapter, unless there is anything repugnant in the subject or context,—

(a) “Act” means the Sales Tax Act, 1990;

(b) “Annex” means an Annex to this Chapter;

(c) “challan” means the payment challan specified in Annex ‘A’ to this Chapter;

(d) “commercial importer” means a person registered as a commercial importer under the Act;

(e) “assessed import value” means the value of imported goods determined under section 25 or 25B of the Customs Act, 1969 (IV of 1969), including the amount of customs duties and central excise duty, if any, levied thereon;

(f) “return” means the return-cum-payment challan specified in Annex ‘B’ to this Chapter;

(g) “statement” means the summary statement in the form specified in Annex ‘C’ to this Chapter;

(h) “value addition” means the difference between the assessed import value and the value of supply for which the goods, in the same state, are supplied, expressed as a percentage over the assessed import value, and calculated in the manner specified in rule 10; and

(i) “year” means a period of twelve continuous months.

(2) The words and expressions used but not defined herein shall have the same meaning as assigned to them in the Act.

3. Payment of Sales Tax on value addition : —(1) A commercial importer shall pay sales tax on supplies of imported goods, at the rate specified in sub-section (1) of section 3 of the Act, on a value addition of not less than fourteen per cent, through a challan in triplicate, at the same time as making payment of customs duty and sales tax in the bill of entry for such imported goods, calculated as shown in the Example.

Provided that in case the value addition of such commercial importer during any period in the preceding year was higher than fourteen per cent, he shall pay sales tax on supplies of imported goods on such higher value addition, in the manner specified in this sub-rule.

EXAMPLE

(a)

Value of imported goods determined under

section 25 or 25B of the Customs Act, 1969

= Rs. 100.00

(b)

Customs duty ( @20% )

= Rs. 20.00

(c)

Assessed import value ( = a + b )

= Rs. 120.00

(d)

Sales tax ( @15% ) payable on bill of entry

= Rs. 18.00

(e)

Value of supplies, with value addition of 14%

[ = c + ( c x 14 ¸100) ]

= Rs. 136.80

(f)

Value addition on which sales tax is payable

( = e – c )

= Rs. 16.80

(g)

Sales tax on value addition ( = f x 15 ¸100 )

(payable on treasury challan)

= Rs. 2.52

(2) The Bank shall send the original copy of the challan to the Collector of Sales Tax having jurisdiction, retain the duplicate copy for its record, and return the triplicate copy to the commercial importer, duly signed and stamped as acknowledgment of payment of the amount indicated.

4. Invoices and records.¾ A commercial importer shall issue a tax invoice for every supply made by him in the manner prescribed in section 23 of the Act and shall maintain records as prescribed under the Act.

5. Filing of Return.¾ A commercial importer shall file sales tax return for a tax period in the form prescribed in Annex ‘B’.

6. Statement of value addition.¾A commercial importer shall furnish to the Collector, by the 15th day of the month following the completion of every year of working under these rules, a statement in the form at Annex ’C’, after payment of the balance amount of tax, if any, payable on value addition for the year, calculated in manner specified in the statement.

7. Exemption from audit.¾A commercial importer who pays sales tax on value addition basis as prescribed under these rules for a year shall not be subjected to any audit for that year, and detailed audit shall be conducted of a commercial importer who pays sales tax in any manner other than prescribed in these rules.

Annex ‘A’

[See rule 10(1)]

CHALLAN FOR PAYMENT OF SALES TAX ON

VALUE ADDITION BY A COMMERCIAL IMPORTER

Sales Tax Registration No.:__________________________________________

Name:___________________________________________________________

Bill of Entry/Goods Declaration No. and date:____________________________

IGM No. and date:__________________________________________________

Index No.:________________________________________________________

Assessed import value

(value for sales tax purposes): Rs. ____________________________________

Sales tax paid on bill of entry: Rs. _____________________________________

Value addition (minimum 14%): Rs. ____________________________________

Sales tax payable on value addition, and deposited in bank:

Rs.______________________________________________________________

Signature:__________________________________

Name:_____________________________________

NIC No.:____________________________________

Date:______________________________________

FOR BANK USE: S. No. ________________

Received an amount of Rs.:__________________________________________

In words: Rupees:__________________________________________________

(Head of account: ‘020000-Sales Tax’)

Bank officer’s signature:_____________________________________________

Date:____________________________________________________________

Bank stamp:______________________________________________________



Annex ‘C’

[See rule 13]

STATEMENT OF VALUE ADDITION

OF A COMMERCIAL IMPORTER

Sales Tax Registration No.:__________________________________________

Name:___________________________________________________________

Address:_________________________________________________________

Telephone No.:______________________ Fax:__________________________

For the year from ______________(month/year) to ____________ (month/year)

1. Opening stock Rs. _______________________

2. Total imports during the year Rs. _______________________

3. Total purchases during the year Rs. _______________________

4. Closing stock Rs. _______________________

5. Total sales during the year Rs. _______________________

6. Cost of sales ( = 1 + 2 + 3 – 4 ) Rs. _______________________

7. Value addition ( = 5 – 6) / 6 ) x 100 ) Rs. _______________________

8. Tax payable on value addition

( = 7 x 0.14 x 0.15 ) Rs. _______________________

9. Sale tax paid during the year Rs. _______________________

10. Tax payable ( = 8 – 9 ) Rs. _______________________

11. Balance amount paid vide challan No. and date _____________________

Signature:__________________________________

Name:_____________________________________

Designation:_________________________________

NIC Card No.:_______________________________

Date:______________________________________

CHAPTER III SPECIAL PROCEDURE FOR PAYMENT OF RETAIL TAX

1. Application : –The provisions of this Chapter shall apply to persons registered exclusively as retailers under the Act.

2. Definitions : —(1) In this Chapter, unless there is anything repugnant in the subject or context,—

(a) “Act” means the Sales Tax Act, 1990;

(b) “Annex” means an Annex appended to these rules;

(c) “application” means application for registration as a taxpayer for retail tax as specified in Form S.T.-1 annexed to Chapter I of the Sales Tax Rules, 2004;

(d) “return” means retail tax return-cum-payment challan as specified in Annex ‘A’; and

(e) “value addition” means difference between the value of supply for which the goods are acquired and the value of supply for which the goods are supplied, where for a particular tax period –

(i) the value of supply for which the goods are supplied shall be the sum of the values of all the sales made by the retailer during the tax period; and

(ii) the value of supply for which the goods are acquired shall be the sum of the values indicated in all the invoices, bills, vouchers, cash payment slips and cash memos of goods purchased by the retailer in the tax period.

(2) All other terms and expressions used but not defined herein shall have the same meaning as assigned to them in the Act.

3. Registration of retailer : —(1) Every person liable to be registered as a retailer shall, if not already registered, make an application for registration to the Collector having jurisdiction in the area where his business premises are located, in the manner prescribed in Chapter I of the Sales Tax Rules, 2004.

(2) In case a retailer operates different branches, divisions or retail outlets at more than one place, he shall apply for registration to the Collector having jurisdiction over the place where the head office is located.

(3) The Collector shall, having satisfied himself with the requisite information provided in the application for registration, register the applicant as retailer and issue registration certificate accordingly.

4. Furnishing of returns and payment of retail tax : —(1) A retailer shall deposit the return for a tax period in a designated branch of the National Bank of Pakistan for the tax period in the manner specified in section 26AA of the Act and Chapter II of the Sales Tax Rules, 2004 made thereunder.

5. Determination of sales tax liability : —Supplies made during a tax period by a retailer shall be charged to tax at the rate specified under sub-section (1) of section 3 of the Act on the basis of the value addition:

Provided that the value addition, in percentage terms, shall not be less than fifteen per cent of the total value of purchases made during the said tax period.

6. Record keeping and invoicing : —(1) A retailer shall issue cash memo for each supply in the form as set out at Annex ‘B’ and shall maintain the following records, namely:—

(a) record of purchases indicating description, quantity and value of goods purchased and the name and address of the seller; and

(b) record of sales indicating description, quantity and value of goods sold.

7. Audit : —(1) Audit of the records for verification of minimum value addition and correct payment of sales tax on monthly basis shall be conducted once in a year.

(2) Notwithstanding the provisions of sub-rule (1), a retailer who declares a minimum increase of six per cent in his total sales in a year over the sales declared in the preceding year, shall not be subjected to routine audit.

(3) Notwithstanding the provisions of sub-rule (2), if the Collector has reasons to believe that the retailer has committed a tax fraud or violated any of the provisions of these rules, he may order for audit of the retailer.



ANNEX ‘B’

[See rule 20(1)]

CASH MEMO / INVOICE

Serial No._______

Sales Tax Registration No._______________

M/s. …….(Sellers’ Name)……

(……Seller’s’ Address……)

Tel:

Fax:

Buyer’s Name & :________________________________________________

Address ________________________________________________

________________________________________________

S.No.

Description

Unit

Price

Quantity / No./

Weight / Volume

Amount

TOTAL

Signature of authorized person

CHAPTER IV SPECIAL PROCEDURE FOR PAYMENT OF SALES TAX BY JEWELLERS
1. Application : —The provisions of this Chapter shall apply to the jewellers, goldsmiths and other persons engaged in the manufacture or supply of jewellery whether on ownership basis or on labour or service charges basis, and to persons engaged in the supply of ready-made jewellery.

2. Definitions : —(1) In this Chapter, unless there is anything repugnant in the subject or context,—

(a) ”Act” means the Sales Tax Act, 1990;

(b) “Annex” means an Annex to this Chapter;

(c) “jeweller” means any person engaged in the supply of jewellery as a manufacturer, wholesaler or retailer, but does not include a zargar;

(d) “jewellery” includes ornaments and articles of adornment made of gold, silver, precious and semi-precious metals, precious or semi-precious stones, gems or any other such materials;

(e) “manufacture” means the process of making of jewellery or the carrying out of any process in the making or in connection with making of jewellery and includes repair of jewellery; and

(f) “zargar” means any person who is engaged in the making of jewellery or carrying out any related process on labour charge basis and is not involved in the sale of jewellery to ordinary consumers.

(2) All other expressions and words used but not defined in this Chapter shall have the same meanings as are assigned to them under the Act.

3. Registration : —(1) Every jeweller engaged in the business of manufacturing or supplying jewellery shall, if not already registered, apply to the Collector of Sales Tax having jurisdiction for registration under section 14 of the Act read with Chapter 1 of the Sales Tax Rules, 2004.

(2) The exemption available to manufacturers and retailers having annual turnover less than that specified in item No. 42 of the Sixth Schedule to the Act, shall be available to jewellers.

(3) A zargar shall not be required to be registered if he is not engaged in the sale of jewellery to ordinary consumers.

4. Exemption : —In respect of his output tax liabilities, a registered jeweller shall be entitled to exemption equal to the amount of sales tax as is in excess of sales tax chargeable on the difference between sale price of jewellery, excluding amount of sales tax, and the value of exempt gold or silver used therein provided that,—

(a) such difference is in no case less than ten per cent of the sale price excluding the amount of tax; and

(b) the labour charges incurred in the making of the jewellery and the price of precious or semi-precious stones and gems, if used, is included in the sale price for the purpose of assessment of tax.

5. Payment of tax : —(1) A jeweller shall pay sales tax at the rate specified in sub-section (1) of section 3 of the Act on the following basis, namely:-

(i) in case of a jeweller working on labour (making) charges basis, on the amount of labour (making) charges received by him:

Example : — A jeweller receives material from a customer for manufacturing jewellery, on which he charges ten thousand rupees as labour (making) charges. Sales tax payable on this amount shall be Rs. 10,000 x 15/100 = Rs. 1500; and

(ii) in case a jeweller making or supplying jewellery wholly or partly from exempt unworked gold or silver purchased or owned by him, sales tax shall be paid on the differential amount determined in accordance with the provisions of rule 25.

Example : — A jeweller purchases exempt unworked gold for eight thousand rupees and after manufacturing jewellery sells the same at value of ten thousand rupees. Difference between sale value and value of exempt gold used is Rs. 10,000 – Rs. 8,000 = Rs. 2,000. Sales tax shall be payable on this differential amount, i.e., Rs. 2000 x 15/100 = Rs. 300.

(2) A registered jeweller shall not be entitled to take adjustment of any input tax or claim any refund of sales tax.

6. Invoices and returns : —(1) A registered jeweller shall issue in English or in Urdu language tax invoices in the form as set out at Annex ‘A’.

(2) A registered jeweller shall file monthly returns in the form as set out in Annex ‘B’.

7. Record keeping : — A registered jeweller shall keep the following record, namely:—

(a) register in the form as set out in Annex ‘C’ to this Chapter in English or in Urdu language;

(b) copies of sales tax invoices issued under sub-rule (1) of rule 27;

(c) electricity bills, telephone bills, rent receipts, wage payment receipts and proof, if any, of all such other expenditures as relate to business activity;

(d) copies of monthly returns filed in the Bank; and

(e) purchase invoices, purchase memos or receipts in any form, if any, received on purchase of raw materials and other inputs.

8. Audit : —Audit of a person registered under this Chapter shall be conducted in usual manner under the Act, but the auditors shall not require the registered jewellers to furnish any document or record other than the ones specified in this Chapter.

9. Responsibility of Jewellers’ Association : —The concerned Jewellers Association or Trade Body shall be responsible to ensure that all its member jewellers having turnover above the threshold for exemption are registered, and the concerned office bearer shall be personally responsible if, at any later stage, it is found that the turnover of any jeweller certified by him as less than the aforesaid threshold was actually above such threshold.

10. Miscellaneous : —All provisions of the Act and the rules made thereunder, insofar as these are not inconsistent with this Chapter shall, mutatis mutandis, apply to the jewellers registered under this Chapter.


ANNEX ‘A’

[See rule 27(1)]

SALES TAX INVOICE

S. No. _________ Date: ________

( Jeweller’s Name )

( ….Address ….)

( ….Tel. No. / Fax No. …..)

Sales Tax Registration No.: __________________

Buyer’s name and address: __________________________________________

________________________________________________________________

S. No.

Description

Quantity / Weight

Price

(per gm)

Price

(1)

(2)

(3)

(4)

(5)

Grams

Milligrams

Total

Less:

Exempt Gold/Silver used

Value for sales tax purposes

Sales Tax @ 15%

Total sale price

Signature of authorised person

ANNEX ‘C’

[See rule 28(a)]

FORM OF REGISTER

TO BE MAINTAINED BY A REGISTERED JEWELLER

GOODS DISPATCHED/SOLD

S. No.

Date.

Tax invoice No.

Brief particulars of goods sold.

Name of buyer.

(1)

(2)

(3)

(4)

(5)

Weight.

Total sale price.

Value of exempt gold/silver.

Value for sales tax purpose.

Amount of sales tax @15%.

(6)

(7)

(8)

(9)

(10)

CHAPTER V SPECIAL PROCEDURE FOR COLLECTION AND PAYMENT OF SALES TAX ON ELECTRIC POWER

1. Application : —The provisions of this Chapter shall apply for collection and payment of sales tax on electric power imported, generated, produced, transmitted and supplied by electricity generation, transmission and distribution companies licensed under the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of 1997), including their distributors, dealers and agents, or by any other person dealing in importation, generation, production, transmission, distribution and supply of electric power.

2. Definitions : —(1) In this Chapter unless there is anything repugnant in the subject or context,

(a) “Act” means the Sales Tax Act, 1990;

(b) Authority” means the National Electric Power Regulatory Authority established under section 3 of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of 1997);

(c) “consumer” means a person or his successor-in-interest who purchases or receives electric power for consumption and not for delivery or re-sale to others and includes a person who owns or occupies a premises where electric power is supplied;

(d) “registered consumer” means a consumer registered under the Act;

(e) “distribution” means the ownership, operation, management or control of distribution facilities for the movement or delivery or sale to consumers of electric power but shall not include the ownership, operation, management and control of distribution facilities located on private property and used solely to move or deliver electric power to the person, owning, operating, managing and controlling those facilities or to tenants thereof shall not constitute distribution;

(f) “distribution company” means a person engaged in the distribution of electric power;

(g) “electric power” means electrical power supplied by a person to a consumer;

(h) “generation” includes the ownership, operation, management or control of generation facilities for delivery or sale of electric power and not solely for consumption by the person owning, operating, managing and controlling those facilities;

(i) “HUBCO” means the Hub Power Company Limited;

(j) “KAPCO” means the Kot Addu Power Company Limited;

(k) “KESC” means the Karachi Electric Supply Corporation;

(l) “IPP” means an Independent Power Producer established in private sector operating under a license issued by the Authority for the purpose of generation, transmission, distribution and sale of electric power, and governed by various Implementation Agreements executed between the Islamic Republic of Pakistan and such Independent Power Producer and includes HUBCO and KAPCO;

(m) “person” means an electricity generation, transmission and distribution company licensed by the Authority and includes a distributor, dealer and agent of such a company, an Independent Power Producer, a Public Sector Project, Private Sector Project, or any other person dealing in importation, generation, production, transmission, distribution and supply of electric power;

(n) “Private Sector Project” means a facility for generation, transmission or distribution of electric power constructed, owned, managed or controlled by any one or more organizations or companies incorporated under the Companies Ordinance, 1984 (XLVIII of 1984);

(o) “Public Sector Project” means a facility for generation, transmission or distribution of electric power constructed, owned, managed or controlled by the Federal Government, a Provincial Government, a local authority or any body owned or controlled by any such Government or authority;

(p) “transmission” means the ownership, operation, management or control of transmission facilities; and

(q) “WAPDA” means the Pakistan Water and Power Development Authority established under the Pakistan Water and Power Development Authority Act, 1958 (W. P. Act XXXI of 1958).

(2) All other words and expressions used, but not defined herein shall have the meanings assigned to them in the Act.

3. Registration : —Every person who supplies electric power, if not already registered, shall get registration under section 14 of the Act read with Chapter I of the Sales Tax Rules, 2004.

4. Levy and collection of sales tax : —(1) Every person who supplies electric power shall collect sales tax at the rate specified in sub-section (1) of section 3 of the Act.

(2) Subject to sub-rule (3), sales tax on electric power shall be levied and collected at the following stages, namely :—

(a) in case of its importation, the responsibility to pay sales tax shall be of the importer, and the value thereof shall be the value as determined under section 25 or, as the case may be, section 25B of the Customs Act, 1969 (IV of 1969), including the amount of customs duties and central excise duties levied thereon; and

(b) in case of generation, transmission, distribution and supply of electric power by a public sector project (for example WAPDA, KESC, etc.), a private sector project including an IPP, a Captive Power Unit or any other person, the responsibility to collect sales tax shall be of the person making the supply, and the value shall be the price of electric power including all charges, surcharges, rents, commissions and all duties and taxes whether local, Provincial or Federal, but excluding the amount of sales tax, as provided in clause (46) of section 2 of the Act.

(3) In case of an IPP, HUBCO or KAPCO, the value of supply shall be the amount received by such IPP or, as the case may be, HUBCO or KAPCO, on account of Energy Purchase Price only and any amount in excess of Energy Purchase Price received on account of Capacity Purchase Price, Energy Price Premium, Excess Bonus, Supplemental Charges, etc., shall not be deemed as a component of the value of supply, notwithstanding anything contained in clause (46) of section 2 of the Act:

Provided that in case WAPDA or KESC disputes any amount, WAPDA or, as the case may be, KESC, shall issue a certificate showing such amount and the tax involved therein and such certificate shall be deemed to be a Credit Note for the IPP for the purposes of section 9 of the Act, and shall be accounted for in the return for the tax period in which such Credit Note is issued.

Provided further that in case an IPP, for the like reasons, receives any amount from WAPDA or KESC in respect of supply made during any pervious tax period, tax on such amount shall be accounted for in the return for the period in which it is received.

5. Filing of returns and deposit of sales tax : — (1) In case of WAPDA and KESC, sales tax levied and collected under rule 35 during a tax period shall be deposited on cash-collection basis.

(2) WAPDA and KESC shall submit the monthly return as prescribed under section 26 of the Act, by the 21st day of the month following the month in which sales tax has been collected. The tax due shall be deposited in the Government Treasury under the relevant head “0220000-Sales Tax” along with the prescribed return in a designated branch of National Bank of Pakistan.

(3) In case of an IPP, the due date for the purpose of filing monthly sales tax return and for payment of sales tax shall be the 25th day of the month following the month to which the sales tax invoice relates.

(4) Any person other than an IPP, WAPDA or KESC, who supplies electric power shall file a monthly sales tax return under section 26 of the Act and Chapter II of the Sales Tax Rules, 2004 and deposit the amount of sales tax payable for the tax period by the due date.

6. Determination of sales tax liability in respect of WAPDA and KESC : —(1) Any person, except WAPDA and KESC, who supplies electric power shall be entitled to claim admissible input tax adjustment in the manner specified in section 7 of the Act, read with section 8 thereof.

(2) WAPDA and KESC shall be entitled to claim admissible input tax adjustment against sales tax paid on their taxable purchases made in the month immediately preceding the tax period:

Provided that no input tax adjustment shall be admissible to WAPDA and KESC on account of the sales tax paid on the taxable purchases made before the 1st January, 2000.

7. Input tax adjustment : —(1) In case of registered consumers the electric power bill issued by distribution company shall be treated as a tax invoice as defined in clause (40) of section 2 of the Act.

(2) Subject to sub-rule (3), registered consumers shall be entitled to claim input tax adjustment against such invoice in the tax period in which the bill is paid as per the provisions of section 7 and 8 of the Act provided the bill contains registration number and address of the business premises declared to the Collector of the such consumer.

(3) In case a registered consumer is consuming electric power for both the taxable as well as non-taxable activity, he shall ascertain the correct amount of electric power consumed in taxable activity and adjust the input tax in accordance with the Chapter IV of the Sales Tax Rules, 2004.

8. Record keeping and invoicing : —(1) Every person who supplies electric power shall maintain records as prescribed under section 22 of the Act or any notification issued thereunder.

(2) Every person who supplies or distributes electric power shall print in his bill or invoice, as the case may be, registration number of the consumer and rate and amount of sales tax required to be charged by him under sub-section (1) of section 3 of the Act.

(3) Every person who supplies electric power and uses computerized accounting system may issue a computer generated sales tax invoice and keep their record on the computer in the prescribed format.

9. Penalty : —(1) Non-issuance of electric power bill for a tax period or any inordinate delay in the issuance of such bill by the electric power transmission and distribution companies or by any registered person engaged in the supply of electric power shall attract penalties under the relevant provisions of the Act.

(2) If the tax is not paid within the date due as provided under rule 36, the registered person shall be liable to pay additional tax and any other penalty prescribed in the Act.

CHAPTER VI SPECIAL PROCEDURE FOR COLLECTION AND PAYMENT OF SALES TAX ON NATURAL GAS

1. Application : —The provisions of this Chapter shall apply for collection and payment of Sales Tax on Natural Gas including Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) imported, produced, transmitted and supplied by gas well-head companies and gas transmission and distribution companies licensed under the Natural Gas Rules, 1960, including their distributors, dealers, sales agents, retailers or by any other person hereinafter called the “person” for the purposes of this Chapter and dealing in importation, production or distribution and supply of Natural Gas including Compressed Natural Gas and Liquefied Petroleum Gas.

2. Definitions : —(1) In this Chapter unless there is anything repugnant in the subject or context,—

(a) ”Act” means the Sales Tax Act, 1990;

(b) “CNG station” means any place or premises from where CNG is supplied to or filled in cylinders or tankers;

(c) ”gas bill” means the bill of charges issued by the gas transmission and distribution companies to their consumers pertaining to a tax period for natural gas supplied by them;

(d) “natural gas” means the gas obtained from bore-holes and wells whether unmixed or mixed with artificial gas consisting primarily of hydrocarbons whether gaseous or liquid in form, which are not oils and includes liquefied petroleum gas (LPG) and compressed natural gas (CNG);

(e) “LPG dealer” means any person authorized by the gas transmission and distribution company or by any other person to be a distributor or supplier who deals in the sales of LPG to any consumer whether in containers or otherwise; and

(f) “transmission and distribution company” means a person holding a licence for the transmission and distribution of natural gas whether imported or from various bore-holes or wells situated in Pakistan (e.g. Sui Southern Gas Pipelines Limited and Sui Northern Gas Pipelines Limited).

(2) All other words and expressions used, but not herein defined shall have the meanings assigned to them in the Act.

3. Levy and collection : —(1) Every person who supplies natural gas shall be liable to registration and shall charge and pay sales tax at the rate specified in sub-section (1) of section 3 of the Act.

(2) Sales tax on natural gas shall be levied and collected at the following stages and in the following manners, namely:—

(a) in case of its importation, the responsibility to pay sales tax shall be of the importer, who shall pay in the manner prescribed in sub-section (1) of section 6 of the Act, and the value thereof shall be the value as determined under section 25 or 25B of the Customs Act, 1969 (IV of 1969), read with section 31A thereof, including the amount of customs duties and central excise duties levied thereon;

(b) in case of production and supply from the bore-holes and wells, the person responsible to charge and pay sales tax shall be the person making the supply at the bore-holes or the well-heads. The value for the purposes of levy of sales tax shall include price of natural gas, charges, rents, commissions and all duties and taxes, local Provincial and Federal, but excluding the amount of sales tax, as provided in clause (46) of section 2 of the Act;

(c) in case of supply of natural gas by a gas transmission and distribution company, the person responsible to charge, collect and deposit sales tax shall be the gas transmission and distribution company and the value for the purpose of tax shall be the total amount billed including price of natural gas, charges, rents, commissions and all duties and taxes, local, Provincial and Federal, but excluding the amount of sales tax as provided in clause (46) of section 2 of the Act;

(d) in case of supply of CNG, the person responsible to charge, collect and pay sales tax shall be the person supplying the gas to its customers and consumers, and the value of supply in case of CNG shall include the price of CNG, charges, rents, commissions and all duties and taxes, local, Provincial and Federal, but excluding the amount of sales tax as provided in clause (46) of section 2 of the Act;

(e) in case of supply of LPG, the person responsible to charge, collect and deposit sales tax shall be the person who is a manufacturer, dealer, distributor or a retailer of LPG and the value of LPG for the purposes of levy of sales tax shall include price of LPG, charges, rents, commissions and all duties and taxes, local, Provincial and Federal, but excluding the amount of sales tax as provided in clause (46) of section 2 of the Act.

4. Record keeping and invoicing : —(1) Every person supplying or distributing natural gas , shall print in his bill or invoice, as the case may be, the rate and amount of sales tax required to be charged by him under sub-section (1) of section 3 of the Act.

(2) The registered person shall submit monthly return as prescribed in the Act. The tax due shall be deposited in the Government Treasury under the relevant head “0220000-Sales Tax” by the 15th day of the month following the month in which the gas has been supplied, provided that in case of gas supplied by gas companies to its consumers directly, and charges are billed on a monthly basis, the date shall be the 15th day of the second month following the month in which supplies were made.

(3) If the supplies are made free of charge or for some other consideration or a consideration which is lower than the billed or invoiced prices, the sales tax shall be charged as if it were supplied at open market price in terms of sub-clause (a) of clause (46) of section 2 of the Act.

(4) The registered person shall be entitled for input tax credit for tax paid on his purchases for making taxable supplies against output tax payable subject to the limitations and restrictions imposed under section 8 of the Act and the notifications issued thereunder:

Provided that the input tax credit shall be admissible for the amount of tax which was paid on the purchases made during that tax period for which return is being submitted:

Provided further that the registered consumers shall be entitled to claim input tax adjustment against such bill in the tax period in which the bill is paid as per the provisions of sections 7 and 8 of the Act, subject to the condition that the bill contains registration number and address of the business premises declared to the Collector by such consumer.

(5) Where the said person is engaged in making taxable supplies as well as exempt supplies, the input tax credit shall be allowed as per Chapter IV of the Sales Tax Rules, 2004.

(6) The registered person shall issue a serially numbered sales tax invoice for every supply made by him, provided that in respect of supplies made by gas transmission and distribution companies, the monthly gas bills issued shall be deemed to be tax invoices in terms of section 23 of the Act. The monthly gas bill issued to a registered person shall contain the registration number of that consumer.

(7) The registered persons supplying natural gas using computerized accounting system may, issue computer-generated sales tax invoices and keep their record on computer in the prescribed format.

(8) The registered person supplying natural gas shall maintain records as prescribed under section 22 of the Act, including record of daily stocks and sales, stating therein quantity and value of the gas supplied and amount of sales tax charged thereon, provided that gas transmission and distribution companies shall not be required to maintain records of daily stocks and sales.

CHAPTER VII SPECIAL PROCEDURE FOR SUPPLY OF GINNED COTTON

1. Application : —The provisions of this Chapter shall apply to cotton ginners, ginning units, and persons involved in the purchase, supply and export of ginned cotton.

2. Definitions.¾For the purposes of this Chapter,—

(a) “Act” means the Sales Tax Act, 1990;

(b) “ginning” means the process of manufacture of ginned cotton;

(c) “ginning unit” means any factory or manufacturing unit engaged in ginning and pressing of cotton; and

(d) “ginner” means a person who is engaged in the manufacture and supply of ginned cotton.

3. Registration.¾(1) A ginner shall, if not already registered under the Act, apply for registration under section 14 of Act read with Chapter I of the Sales Tax Rules, 2004, to the Collector having jurisdiction in the area where the ginning unit is situated.

(2) Where a ginner is operating more than one ginning units or a composite unit dealing in ginning and spinning together or is engaged in any other taxable activity, whether ginning or other taxable activities are carried out in the same premises or not, such ginner shall apply for registration separately in accordance with sub-rule (1) for each ginning unit and separately for other taxable activity.

4. Notice to be given by ginner.¾A ginner shall notify the Collector in writing about the commencement and cessation of ginning, one day prior to such commencement, or as the case may be, cessation.

5. Tax rate.¾Supply of ginned cotton shall be zero-rated subject to the procedure specified in rules 50 and 51 of these rules.

6. Tax invoice and returns.¾Subject to the procedure specified in these rules, a ginner or any other person making supply of ginned cotton shall issue a tax invoice under section 23 of the Act for each supply of taxable goods, indicating all the particulars specified in the said section, including the full name and complete address of the buyer, registration number of the buyer, if any, the quantity and value of supply, and the rate and amount of tax involved, if any, on such supply.

7. Manner of supply of ginned cotton.¾(1) The ginner shall deliver ginned cotton against a serially numbered delivery note or gate pass to the buyer, indicating the quantity of ginned cotton sold, the full name and complete address of the buyer and his registration number.

(2) The buyer shall, after receipt of the ginned cotton, settle the terms about the quantity and value of ginned cotton with the ginner within six days of the date of dispatch of ginned cotton from the ginning unit, and indicate the changes in the quantity and value (if any) on the reverse side of copies of the delivery note or gate pass issued by the ginner.

(3) The ginner shall then, within seven days, issue the prescribed zero-rated sales tax invoice for the quantity and value of the ginned cotton agreed between the ginner and the buyer, which shall be issued bearing the date on which the ginned cotton was dispatched against the delivery note or gate pass and shall bear a cross reference to the said delivery note or gate pass.

(4) The ginner shall maintain proper record of all such supplies made and shall furnish the details of all supplies of cotton made by him during a month to the Collector, in the format given below, by the 15th day of the month succeeding the month in which the supplies were made:-

STATEMENT OF SUPPLY OF GINNED COTTON

Name of Ginner___________­­_________________________________________

Address__________________________________________________________

Registration No.___________________________________________________

Month___________________________________________________________

S. No.

Invoice number and date

Name of buyer and his registration No. (if any)

Complete address of buyer

Quantity of supply

Value of supply

(1)

(2)

(3)

(4)

(5)

(6)

(5) Supply of ginned cotton made by a person other than a ginner shall be made in the same manner as specified in sub-rule (1) to (4), and all the provisions of this Chapter shall be applicable to such person mutatis mutandis.

8. Maintenance of records.¾A ginner shall maintain the records specified in the Act and the Rules made thereunder.

9. Adjustment of input tax.¾A person making zero-rated supplies of ginned cotton may claim adjustment of input tax on his taxable purchases in accordance with provisions of sections 7 and 8 of the Act, and in case the input tax exceeds the output tax, he may claim refund in terms of section 10 of the Act and Chapter V of the Sales Tax Rules, 2004.

10. Effect of failure to observe this special procedure.¾(1) In case any supply of ginned cotton is made in a manner other than as specified in this Chapter, sales tax shall be chargeable thereon at the rate specified in sub-section (1) of section 3 of the Act.

(2) In case any goods are not accounted for by a person making supplies of ginned cotton, he shall be liable to pay sales tax thereon at the rate specified in sub-section (1) of section 3 of the Act, along with additional tax and penalty under the Act.

CHAPTER VIII SPECIAL PROCEDURE FOR THE SPINNING INDUSTRY

1. Application.¾The provisions of this Chapter shall apply to the spinners and spinning units manufacturing and producing cotton yarns and blended yarns falling under Chapters 52 and 55 of the First Schedule to the Customs Act, 1969 (IV of 1969).

2. Definitions.¾(1) In this Chapter unless there is anything repugnant in the subject or context,—

(a) “Act” means the Sales Tax Act, 1990;

(b) “spinning” means the process of manufacture or production of cotton or blended yarns;

(c) “spinning unit” means a factory or manufacturing or production unit engaged in spinning; and

(d) “spinner” means a person who is engaged in the manufacture and supply of cotton yarns or blended yarns.

(2) The words and expressions used, but not defined herein, shall have the meaning assigned to them in the Act.

3. Registration : — (1) A spinner shall apply and obtain registration, if not already registered, in accordance with the provisions of section 14 of the Act read with Chapter I of the Sales Tax Rules, 2004 made thereunder.

(2) Where a spinner conducts taxable activity through distinct or different branches, divisions, storage places, sales depots or manufacturing units, he shall inform the Collector of Sales Tax having jurisdiction about the address, nature of taxable activity, phone number and fax number of every such premises of his branches, divisions, storage places, sales depots and manufacturing units, and the details so furnished shall be mentioned in the registration certificate and also entered in the computer profile of the spinner.

(3) In case of a registration certificate issued prior to issuance of these Rules, the spinner shall give the information specified in sub-rule (2) to the Collector within ten days, and shall get the same entered in his registration certificate.

4. Maintenance of records : — The registered spinner shall, in addition to the records prescribed under the Act, maintain the following records, namely:-

(a) raw material register in the format prescribed in Annex ‘A’;

(b) daily production register and finished goods register in the format prescribed in Annex ‘B’;

(c) transit note in the format prescribed in Annex ‘C’; and

(d) delivery note in the format prescribed in Annex ‘D’.

5. Movement of goods : —(1) Yarn shall be removed from the registered spinning unit—

(a) to the branches, divisions, storage places, sales depots and other manufacturing units of the spinner or amongst the aforesaid of the same registered spinner or to any other person for further processing against a “Transit Note” as prescribed at Annex ‘C’; and

(b) from its branches, divisions, storage places, sales depots or other manufacturing units to any other person against a “Delivery Note” as prescribed at Annex ‘D’.

(2) The Transit Note or the Delivery Note shall be in duplicate, serially-numbered and in bound book form. The movement and disposal of the Transit Note and the Delivery Note shall be as hereunder:-

(a) the original copy shall accompany the consignment from consignor’s premises to consignee’s premises;

(b) the duplicate copy shall form part of the bound book and shall be kept in record;

(c) a separate Transit Note or Delivery Note shall be issued in respect of each vehicle or other means of conveyance. If a single vehicle is carrying goods for more than one consignee, separate Notes shall be prepared for each consignee; and

(d) the Transit Note and Delivery Note shall be prepared immediately before commencement of loading on the vehicle or the conveyance.

6. Tax invoice : —(1) The spinner or its branches, divisions, sales depots, storage places shall issue a tax invoice on the supply of taxable goods in accordance with section 23 of the Act.

(2) The spinner shall give delivery of yarn to the buyer after issue of tax invoice and the tax invoice number and date shall be duly entered on the Delivery Note.

7. Tax returns : —The spinner shall file his tax returns on the prescribed forms in the prescribed manner and by the prescribed date under the Act.

8. Provisions of Act to apply : —All provisions of the Act and the rules made thereunder, in so far as these are not inconsistent with this Chapter shall, mutatis mutandis, apply to the spinners under this Chapter.

Annex ‘A’

[See rule 58(a)]

FORM OF RAW MATERIAL REGISTER

NAME OF REGISTERED PERSON:__________________________________

ADDRESS: ______________________________________________________

REGISTRATION NUMBER:__________________________________________

TYPE OF MATERIAL: ___________

(1)

(2)

(3)

Date

Receipt of Raw Material

Total in Hand

From whom received

(2a)

Quantity

No. of Packages

(3a)

Quantity

(Kgs.)

(3b)

No. of Packages

(2b)

Quantity

(Kgs.)

(2c)

(4)

(5)

(6)

Issue of Raw Material

Closing Balance

Remarks

For Removal out of Factory

For the process of Manufacture

No. of Packages

(5a)

Quantity (Kgs.)

(5b)

No. of Packages

(4a)

Quantity (Kgs.)

(4b)

No. of Packages

(4c)

Quantity (Kgs.)

(4d)


Annex ‘B’

[See rule 58(b)]

FORM OF DAILY PRODUCTION AND FINISHED GOODS REGISTER

NAME OF REGISTERED PERSON:__________________________________

ADDRESS: ______________________________________________________

REGISTRATION NUMBER:__________________________________________

TYPE OF MATERIAL: ___________

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2020-04-10T16:44:02+05:00