The Sales Tax Act, 1990 (Act No. III of 1951 as Amended by Act VII of 1990)

The Sales Tax Act, 1990
(Act No. III of 1951 as Amended by Act VII of 1990)
The Sales Tax Act, 1990
1
INDEX
Chapter I ................................................................................................................. 8
PRELIMINARY ............................................................................................... 8
1. Short title, extent and commencement.- .................................................... 8
2. Definitions.― ................................................................................................. 8
Chapter-II ............................................................................................................. 22
SCOPE AND PAYMENT OF TAX .................................................... 22
3. Scope of tax.— ............................................................................................ 22
4. Zero rating.— .............................................................................................. 26
5. Change in the rate of tax.— ...................................................................... 27
6. Time and manner of payment.― ............................................................... 27
7. Determination of tax liability.― ................................................................ 28
[7A. Levy and collection of tax on specified goods on value addition.—
29
[8. Tax credit not allowed.— .......................................................................... 30
[8A. Joint and several liability of registered persons in supply chain where
tax unpaid.– .......................................................................................................... 32
[8B. Adjustable input tax.– ........................................................................... 32
9. Debit and credit note.— ............................................................................ 33
[10. Refund of input tax.— ............................................................................. 33
[11. Assessment of tax and recovery of tax not levied or short-levied or
erroneously refunded.― ...................................................................................... 35
[11A. Short paid amounts recoverable without notice.– ............................. 36
[13. Exemption.― ............................................................................................. 37
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Chapter-III ............................................................................................................ 38

REGISTRATION .......................................................................................... 38
14. Registration. –.............................................................................................. 38
15. Omitted ........................................................................................................ 38
16. Omitted ........................................................................................................ 38
17. Omitted ........................................................................................................ 38
18. Omitted ........................................................................................................ 38
19. Omitted ........................................................................................................ 38
20. Omitted ........................................................................................................ 38
[21. De-registration, blacklisting and suspension of registration.— .......... 38
Chapter-IV ............................................................................................................ 39
BOOK KEEPING AND INVOICING REQUIREMENTS ...... 39
22. Records.– ..................................................................................................... 39
23. Tax Invoices.- .............................................................................................. 40
24. Retention of record and documents for [six] years.- .............................. 41
25. Access to record, documents, etc.- ........................................................... 42
25A. Drawing of samples.- ............................................................................ 43
[25AA.Transactions between associates.- ......................................................... 44
Chapter-V ............................................................................................................. 45
RETURNS........................................................................................................ 45
26. Return.– ........................................................................................................ 45
26A. [Omitted by Finance Act, 2004] .......................................................... 46
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26AA. [Omitted by Finance Act, 2008] ....................................................... 46
27. Special Returns.-- ........................................................................................ 46
28. Final Return.- ............................................................................................... 46
29. Return deemed to have been made.- ........................................................ 47
Chapter-VI ............................................................................................................ 48
APPOINTMENT OF AUTHORITIES & THEIR POWERS . 48
[30. Appointment of Authorities.— ............................................................... 48
30A. Directorate General, (Intelligence and Investigation) [Inland
Revenue]................................................................................................................ 49
30B. Directorate General Internal Audit.- ................................................... 49
30C. Directorate General of Training and Research.- ............................... 49
30D. Directorate General of Valuation.- ...................................................... 49
30DD. Directorate of Post Clearance Audit.– ............................................ 49
30E. Powers and Functions of Directorate etc.- ........................................ 50
31. Powers.-- ...................................................................................................... 50
32. Delegation of powers.-- ............................................................................. 50
32A. Special Audit by Chartered Accountants or Cost Accountants–..... 51
32AA. [Omitted by Finance Act, 2008] ....................................................... 51
Chapter-VII .......................................................................................................... 52
OFFENCES AND PENALTIES ........................................................... 52
33. Offences and penalties.— .......................................................................... 52
34. Default Surcharge.– .................................................................................... 62
34A. Exemption from penalty and default surcharge.-- ............................. 64
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35. [Omitted by Finance Act, 1996] ................................................................ 64
35A. [Omitted by Finance Act, 1996] .......................................................... 64
37. Power to summon persons to give evidence and produce documents in
inquiries under the Act.-- .................................................................................... 64
37A. Power to arrest and prosecute.-- .......................................................... 65
37B. Procedure to be followed on arrest of a person.-- ............................ 66
[37C. Special Judges.- ....................................................................................... 68
[37D.Cognizance of offences by Special Judges.- ........................................... 68
38. Authorised officers to have access to premises, stocks, accounts and
records.-- ............................................................................................................... 71
38A. Power to call for information.— ......................................................... 71
38B. Obligation to produce documents and provide information.— ..... 72
39. [Omitted by Finance Act, 1996] ................................................................ 73
40. Searches under warrant- ............................................................................. 73
40A. [Omitted by Finance Act, 2006] .......................................................... 73
40B. Posting of [Inland Revenue] Officer.-- ............................................... 73
[40C.Monitoring or tracking by electronic or other means.- .......................... 73
41. [Omitted by Finance Act, 1996] ................................................................ 74
42. [Omitted by Finance Act, 1996] ................................................................ 74
Chapter-VIII ......................................................................................................... 75
APPEALS ......................................................................................................... 75
43. [Omitted by Finance Act, 1996] ................................................................ 75
44. [Omitted by Finance Act, 1996] ................................................................ 75
[45. Omitted by Finance Act 2010] ................................................................ 75
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45A. Power of the Board and [Commissioner] to call for records.-- ....... 75
45B. Appeals.— .............................................................................................. 75
46. Appeals to Appellate Tribunal.– ............................................................... 77
47. Reference to the High Court.— ............................................................... 77
47A. Alternative dispute resolution.— ......................................................... 79
Chapter-IX ............................................................................................................ 81
RECOVERY OF ARREARS .................................................................. 81
48. Recovery of arrears of tax.- ....................................................................... 81
Chapter-X ............................................................................................................. 83
MISCELLANEOUS ..................................................................................... 83
49. Sales of taxable activity or transfer of ownership.-- ............................... 83
49A. Liquidators.- ........................................................................................... 83
50. Power to make rules.-- ............................................................................... 84
50A. Computerized system.— ...................................................................... 84
[50B. Electronic scrutiny and intimation.– ....................................................... 85
51. Bar of suits, prosecution and other legal proceedings.-- ........................ 85
52. Appearance by authorised representative.-- ............................................ 86
52A. e-intermediaries to be appointed.— .................................................... 86
53. Estate of deceased person.-- ...................................................................... 87
54. Estate in bankruptcy.-- ............................................................................... 87
55. Removal of difficulties.-- ........................................................................... 87
[56. Service of order, decisions, etc.-- ............................................................ 87
[57. Rectification of mistake.- .......................................................................... 88
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58. Liability for payment of tax in the case of private companies or
business enterprises.-- ......................................................................................... 89
58A. Representatives.— ................................................................................. 89
58B. Liability and obligations of representatives.— ................................... 91
59. Tax paid on stocks acquired before registration.-- ................................. 92
60. Powers to deliver certain goods without payment of tax.--................... 92
61. Repayment of tax in certain cases.-- ......................................................... 92
61A. Repayment of tax to persons registered in Azad Jammu and
Kashmir.— ........................................................................................................... 93
62. Drawback allowable on re-export.-- ......................................................... 93
63. Drawback on goods taken into use between importation and reexportation.--
........................................................................................................ 93
64. Power to declare what goods are identifiable and to prohibit drawback
in case of specified foreign territory.-- .............................................................. 93
65. Exemption of tax not levied or short levied as a result of general
practice.-- .............................................................................................................. 94
66. Refund to be claimed within one year.-- .................................................. 94
67. Delayed Refund.-- ....................................................................................... 95
68. Liability of the registered person for the acts of his agent.--................. 95
69. Issuance of duplicate of sales tax documents.— .................................... 95
70. Computation of limitation period.-- ......................................................... 95
71. Special procedure.— .................................................................................. 96
72. Officers of [Inland Revenue] to follow Board's orders, etc.-- .............. 96
[72A. Reference to the authorities.— ............................................................ 96
[72B. Selection for audit by the Board.- ............................................................ 97
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[72C.Reward to Inland Revenue officers and officials.- ................................. 97
73. Certain transactions not admissible.—..................................................... 97
74. Condonation of time-limit.— ................................................................... 98
75. Application of the provisions of Act IV of 1969 to Sales Tax.— ........ 98
SCHEDULES ............................................................................................... 100
THE FIRST SCHEDULE ............................................................................... 100
THE SECOND SCHEDULE ........................................................................ 101
THE THIRD SCHEDULE ............................................................................. 102
THE FOURTH SCHEDULE ......................................................................... 104
THE FIFTH SCHEDULE .............................................................................. 105
THE SIXTH SCHEDULE .............................................................................. 108
THE SEVENTH SCHEDULE ...................................................................... 152
[THE EIGHTH SCHEDULE ........................................................................ 153
[NINTH SCHEDULE ..................................................................................... 164
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An Act to consolidate and amend the law relating to the levy of a tax on the
sale, importation, exportation, production, manufacture or consumption of
goods.
WHEREAS it is expedient to consolidate and amend the law relating to the
levy fo tax on the sale, importation, exportation, production, manufacture or
consumption of goods;
It is hereby enacted as follows:-
Chapter I
PRELIMINARY
1. Short title, extent and commencement.-
(1) This Act may be called the Sales Tax 1[ ] Act, 1990.
(2) It extends to the whole of Pakistan.
(3) It shall come into force on such date as the Federal Government may,
by notification in the official Gazette, appoint.
2. Definitions.―
In this Act, unless there is anything repugnant in the subject or
context,--
2[(1) Appellate Tribunal” means the Appellate Tribunal Inland Revenue
established under section 130 of the Income Tax Ordinance 2001
(XLIX of 2001)]
(2) “appropriate officer” means an 3[officer of Inland Revenue] authorised
by the Board by notification in the official Gazette to perform certain
functions under this Act;
4[(2A) “arrears”, in relation to a person, means, on any day, the sales tax due
and payable by the person under this Act before that day but which has
not yet been paid;]
1[(3) “associates (associated persons)” means, –
1 The word “Amendment” omitted by the Finance Act, 1991.
2 Clause (1) substituted Finance Act, 2010. Earlier the same amendment was made by Finance
Amendment (Ordinance), 2010.
3 Substituted “officer of Sales Tax” by Finance Act, 2010. Earlier the same amendment was made
by Finance Amendment (Ordinance), 2010.
4 Clause (2A) substituted by the Finance Act, 2008. Earlier it was inserted by the Tax Laws
(Amendment Ordinance, 1999. Earlier it was inserted by the Finance Act, 1991.
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(i) subject to sub-clause (ii), where two persons associate and the
relationship between the two is such that one may reasonably
be expected to act in accordance with the intentions of the other,
or both persons may reasonably be expected to act in
accordance with the intentions of a third person;
(ii) two persons shall not be associates solely by reason of the fact
that one person is an employee of the other or both persons are
employees of a third person;
(iii) without limiting the generality of sub-clause (i) and subject to
sub-clause (iv), the following shall be treated as associates,
namely: –
(a) an individual and a relative of the individual;
(b) members of an association of persons;
(c) a member of an association of persons and the
association, where the member, either alone or together
with an associate or associates under another application
of this section, controls fifty per cent or more of the rights
to income or capital of the association;
(d) a trust and any person who benefits or may benefit under
the trust;
(e) a shareholder in a company and the company, where the
shareholder, either alone or together with an associate or
associates under another application of this section,
controls either directly or through one or more interposed
persons–
(i) fifty per cent or more of the voting power in the
company;
(ii) fifty per cent or more of the rights to dividends; or
(iii) fifty per cent or more of the rights to capital; and
(f) two companies, where a person, either alone or together
with an associate or associates under another application
of this section, controls either directly or through one or
more interposed persons –
(i) fifty per cent or more of the voting power in both
companies;
1 Clause (3) substituted by the Finance Act, 2008.
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(ii) fifty per cent or more of the rights to dividends in
both companies; or
(iii) fifty per cent or more of the rights to capital in both
companies;
(iv) two persons shall not be associates under subclause
(a) or (b) of paragraph (iii) where the
1[Commissioner] is satisfied that neither person
may reasonably be expected to act in accordance
with the intentions of the other.
(v) In this clause, “relative” in relation to an individual,
means–
(a) an ancestor, a descendant of any of the
grandparents, or an adopted child, of the
individual, or of a spouse of the individual; or
(b) a spouse of the individual or of any person
specified in sub-clause (a).]
2[(3A) “association of persons” includes a firm, a Hindu undivided family, any
artificial juridical person and body of persons formed under a foreign
law, but does not include a company;]
3[(3AA)]“banking company” means a banking company as defined in the
Banking Companies Ordinance, 1962 (LVII of 1962) and includes any
body corporate which transacts the business of banking in Pakistan;
4[(4) “Board” means the Federal Board of Revenue established under
section 3 of the Federal Board of Revenue Act, 2007;]
5[(4A) “Chief Commissioner” means a person appointed as the chief
Commissioner Inland Revenue under section 30;]
6[(5) ‘Commissioner’ means the Commissioner of Inland Revenue appointed
under section 30;]
1 Substituted for “Collector” by Finance Act, 2010. Earlier the same amendment was made by
Finance Amendment (Ordinance), 2010.
2 Clause (3A) inserted by Finance Act, 2008.
3 Clause (3A) renumbered as clause (3AA) by the Finance Act, 2008.
4 Clause (4) substituted by the Finance Act, 2008. Earlier it was substituted by the Finance Act,
2007.
5 Clause (4A) inserted by Finance Act, 2010. Earlier the same amendment was made by Finance
Amendment (Ordinance), 2010.
6 Clause (5) substituted Finance Act, 2010. Earlier the same amendment was made by Finance
Amendment (Ordinance), 2010.
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1[(5A) “common taxpayer identification number” means the registration
number or any other number allocated to a registered person;]
2[(5AA)“company” means—
(a) a company as defined in the Companies Ordinance, 1984 (XL
VII of 1984);
(b) a body corporate formed by or under any law in force in
Pakistan;
(c) a modaraba;
(d) a body incorporated by or under the law of a country outside
Pakistan relating to incorporation of companies;
(e) a trust, a co-operative society or a finance society or any other
society established or constituted by or under any law for the
time being in force; or
(f) a foreign association, whether incorporated or not, which the
Board has, by general or special order, declared to be a
company for the purposes of the Income Tax Ordinance, 2001
(XLIX of 2001);]
(5AAA)“computerized system” means any comprehensive information
technology system to be used by the Board or any other office as may
be notified by the Board, for carrying out the purposes of this Act;
(5AB) ”cottage industry” means a manufacturer whose annual turnover from
taxable supplies made in any tax period during the last twelve months
ending any tax period does not exceed five million rupees or whose
annual utility (electricity, gas and telephone) bills during the last twelve
months ending any tax period do not exceed seven hundred thousand
rupees;
3[(5AC)“CREST” means the computerized program for analyzing and crossmatching
of sales tax returns, also referred to as Computerized Riskbased
Evaluation of Sales Tax;]
(6) “Customs Act” means the Customs Act, 1969 (IV of 1969), and where
appropriate all rules and notifications made under that Act;
1 Clause (5A) inserted by the Finance Act, 2006. Earlier clause (5A) was omitted by the Finance
Act, 2004 which was inserted by the Tax Laws (Amendments) Ordinance, 1999.
2 Clause (5AA) inserted by the Finance Act, 2008.
3 Clause (5AC) inserted by Finance Act, 2013.
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(6A) “defaulter” means a person and, in the case of company or firm, every
director, or partner of the company, or as the case may be, of the firm,
of which he is a director or partner or a proprietor and includes
guarantors or successors, who fail to pay the arrears;
(6B) “default surcharge” means the default surcharge levied under section
34;
(7) “distributor” means a person appointed by a manufacturer, importer or
any other person for a specified area to purchase goods from him for
further supply and includes a person who in addition to being a
distributor is also engaged in supply of goods as a wholesaler or a
retailer;
(8) “document” includes any electronic data, computer programmes,
computer tapes, computer disks, micro-films or any other medium for
the storage of such data;
(9) “due date” in relation to the furnishing of a return under section 26 and
section 26AA means the 15th day of the month following the end of the
tax period, or such other date as the Board may, by notification in the
official Gazette, specify;
(9A) “e-intermediary” means a person appointed as e-intermediary under
section 52A for filing of electronic returns and such other documents as
may be prescribed by the Board from time to time, on behalf of a
person registered under section 14;
(10) “establishment” means an undertaking, firm or company, whether
incorporated or not, an association of persons or an individual;
(11) “exempt supply” means a supply which is exempt from tax under
section 13;
1[(11A)“firm” means the relation between persons who have agreed to share
the profits of a business carried on by all or any of them acting for all;]
(12) “goods” include every kind of movable property other than actionable
claims, money, stocks, shares and securities;
(13) “importer” means any person who imports any goods into Pakistan;
(14) “input tax”, in relation to a registered person, means—
(a) tax levied under this Act on supply of goods to the person;
(b) tax levied under this Act on the import of goods by the person;
1 Clause (11A) inserted by the Finance Act, 2008.
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(c) in relation to goods or services acquired by the person, tax
levied under the Federal Excise Act, 2005 in sales tax mode as
a duty of excise on the manufacture or production of the goods,
or the rendering or providing of the services;
(d) Provincial sales tax levied on services rendered or provided to
the person; and
(e) levied under the Sales Tax Act, 1990 as adapted in the State of
Azad Jammu and Kashmir, on the supply of goods received by
the person;
1[(14A)The expression “KIBOR” means Karachi Inter-Bank Offered Rate
prevalent on the first day of each quarter of the financial year;]
2[(15) ‘Local Inland Revenue Office’ means the office of Superintendent of
Inland Revenue or such other office as the Board may, by notification in
the official Gazette, specify;]
(16) “manufacture” or “produce” includes-
(a) any process in which an article singly or in combination with other
articles, materials, components, is either converted into another
distinct article or product or is so changed, transformed or
reshaped that it becomes capable of being put to use differently or
distinctly and includes any process incidental or ancillary to the
completion of a manufactured product;
(b) process of printing, publishing, lithography and engraving; and
(c) process and operations of assembling, mixing, cutting, diluting,
bottling, packaging, repacking or preparation of goods in any other
manner;
(17) “manufacturer” or “producer” means a person who engages, whether
exclusively or not, in the production or manufacture of goods whether
or not the raw material of which the goods are produced or
manufactured are owned by him; and shall include–
(a) a person who by any process or operation assembles, mixes, cuts,
dilutes, bottles, packages, repackages or prepares goods by any
other manner;
1 Clause (14A) inserted by the Finance Act, 2009.
2 Clause (15) substituted by Finance Act, 2010. Earlier the same amendment was made by
Finance Amendment (Ordinance), 2010.
The Sales Tax Act, 1990
14
(b) an assignee or trustee in bankruptcy, liquidator, executor, or
curator or any manufacturer or producer and any person who
disposes of his assets in any fiduciary capacity; and
(c) any person, firm or company which owns, holds, claims or uses any
patent, proprietary, or other right to goods being manufactured,
whether in his or its name, or on his or its behalf, as the case may
be, whether or not such person, firm or company sells, distributes,
consigns or otherwise disposes of the goods:
Provided that for the purpose of refund under this Act, only such
person shall be treated as manufacturer-cum-exporter who owns or
has his own manufacturing facility to manufacture or produce the
goods exported or to be exported;
1[(18) “Officer of Inland Revenue” means an officer appointed under section
30;]
(19) “open market price” means the consideration in money which that
supply or a similar supply would generally fetch in an open market;
2[(20) “output tax”, in relation to a registered person, means-
(a) tax levied under this Act on a supply of goods, made by the
person;
(b) tax levied under the Federal Excise Act, 2005 in sales tax mode
as a duty of excise on the manufacture or production of the
goods, or the rendering or providing of the services, by the
person;
(c) Provincial sales tax levied on services rendered or provided by
the person;]
3[(21) “person” means,–
(a) an individual;
(b) a company or association of persons incorporated, formed,
organized or established in Pakistan or elsewhere;
(c) the Federal Government;
(d) a Provincial Government;
1 Clause (18) substituted by Finance Act, 2010. Earlier the same amendment was made by
Finance Amendment (Ordinance), 2010.
2 Clause (20) substituted by the Finance Act, 2008. Earlier it was substituted by the Finance Act,
2007.
3 Clause (21) substituted by the Finance Act, 2008.
The Sales Tax Act, 1990
15
(e) a local authority in Pakistan; or
(f) a foreign government, a political subdivision of a foreign
government, or public international organization;]
(22) “prescribed” means prescribed by rules made under this Act;
1[(22A)“provincial sales tax” means tax levied under provincial laws or laws
relating to Islamabad Capital Territory, which are declared by the
Federal Government, through notification in the official Gazette, to be
provincial sales tax for the purpose of input tax;
(23) “registered office” means the office or other place of business specified
by the registered person in the application made by him for registration
under this Act or through any subsequent application to the
Commissioner;
(24) “registration number” means the number allocated to the registered
person for the purpose of this Act;
2[(25) “registered person” means a person who is registered or is liable to be
registered under this Act:
Provided that a person liable to be registered but not registered under
this Act shall not be entitled to any benefit available to a registered
person under any of the provisions of this Act or the rules made
thereunder;]
3[ ]
(27) “retail price”, with reference to the Third Schedule, means the price
fixed by the manufacturer, inclusive of all duties, charges and taxes
(other than sales tax) at which any particular brand or variety of any
article should be sold to the general body of consumers or, if more than
one such price is so fixed for the same brand or variety, the highest of
such price4[:
Provided that the Board may through a general order specify zones or
areas for the purpose of determination of highest retail price for any
brand or variety of goods;]
1 Clause (22A) substituted by Finance Act, 2013. Earlier it was:
(22A) “Provincial sales tax” means tax levied under,–
(a) the Balochistan Sales Tax Ordinance, 2000 (I of 2000);
(b) Islamabad Capital Territory (Tax on Services) Ordinance, 2001 (XLII of 2001);
(c) the Punjab Sales Tax Ordinance, 2000 (Pb. Ord. II of 2000);
(d) the North West Frontier Province Sales Tax Ordinance, 2000 (III of 2000); and
(e) the Sindh Sales Tax Ordinance, 2000 (VIII of 2000);
2 Clause (25) substituted by the Finance Ordinance, 2002.
3 Clause (26) omitted by Finance Act, 1997.
4 Proviso inserted by Finance Act, 2014.
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16
(28) “retailer” means a person, supplying goods to general public for the
purpose of consumption:
Provided that any person, who combines the business of import and
retail or manufacture or production with retail, shall notify and advertise
wholesale prices and retail prices separately, and declare the address
of retail outlets, and his total turnover per annum shall be taken into
account for the purposes of registration under section 14.
1[ ]
(29) “return” means any return required to be furnished under Chapter-V of
this Act;
2[(29A) “sales tax” means—
(a) the tax, additional tax, or default surcharge levied under this Act;
(b) a fine, penalty or fee imposed or charged under this Act; and
(c) any other sum payable under the provisions of this Act or the
rules made thereunder;]
(29AA) “sales tax account” means an account representing the double entry
recording of sales tax transactions in the books of account;
(30) “Schedule” means a Schedule appended to this Act;
(31) “similar supply”, in relation to the open market price of goods, means
any other supply of goods which closely or substantially resembles the
characteristics, quantity, components and materials of the
aforementioned goods;
(31A) “special audit” means an audit conducted under section 32A;
(32) “Special Judge” means the Special Judge appointed under Section
3[37C of the Act and till such appointment is made the Special Judge
appointed under section] 185 of the Customs Act;
4[(33) “supply” means a sale or other transfer of the right to dispose of goods
as owner, including such sale or transfer under a hire purchase
agreement, and also includes—
1 Clause (28A) omitted by the Finance Act, 2008. Earlier it was inserted by the Finance Act, 1997.
2 Clause (29A) inserted by the Finance Act, 2008.
3 Figure and words etc inserted by the Finance Act, 2010 w.e.f. June 05, 2010.
4 Clause (33) substituted by the Finance Act, 2008.
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17
(a) putting to private, business or non-business use of goods
produced or manufactured in the course of taxable activity for
purposes other than those of making a taxable supply;
(b) auction or disposal of goods to satisfy a debt owed by a person;
and
(c) possession of taxable goods held immediately before a person
ceases to be a registered person:
Provided that the Federal Government, may by notification in the
official Gazette, specify such other transactions which shall or
shall not constitute supply;]
1[(33A)“supply chain” means the series of transactions between buyers and
sellers from the stage of first purchase or import to the stage of final
supply;]
2[(34) “tax”, unless the context requires otherwise, means sales tax;]
3[(35) “taxable activity”, means any economic activity carried on by a person
whether or not for profit, and includes—
(a) an activity carried on in the form of a business, trade or
manufacture;
(b) an activity that involves the supply of goods, the rendering or
providing of services, or both to another person;
(c) a one-off adventure or concern in the nature of a trade; and
(d) anything done or undertaken during the commencement or
termination of the economic activity,
but does not include—
(a) the activities of an employee providing services in that capacity
to an employer;
(b) an activity carried on by an individual as a private recreational
pursuit or hobby; and
(c) an activity carried on by a person other than an individual which,
if carried on by an individual, would fall within sub-clause (b).]
1 Clause (33A) inserted by Finance Act, 2013.
2 Clause (34) substituted by the Finance Act, 2008.
3 Clause (35) substituted by the Finance Act, 2008.
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18
(36) “tax fraction” means the amount worked out in accordance with the
following formula:-
a / 100 + a
('a' is the rate of tax specified in section 3);
(37) “tax fraud” means knowingly, dishonestly or fraudulently and without
any lawful excuse (burden of proof of which excuse shall be upon the
accused) –
(i) doing of any act or causing to do any act; or
(ii) omitting to take any action or causing the omission to take any
action, including the making of taxable supplies without getting
registration under this Act; or
(iii) falsifying or causing falsification the sales tax invoices
in contravention of duties or obligations imposed under this Act or rules
or instructions issued thereunder with the intention of understating the
tax liability or underpaying the tax liability for two consecutive tax periods
or overstating the entitlement to tax credit or tax refund to cause loss of
tax;
(38) [Omitted by Finance Act, 2004]
(39) “taxable goods” means all goods other than those which have been
exempted under section 13;
(40) “tax invoice” means a document required to be issued under section
23;
(41) “taxable supply” means a supply of taxable goods made by an
importer, manufacturer, wholesaler (including dealer), distributor or
retailer other than a supply of goods which is exempt under section 13
and includes a supply of goods chargeable to tax at the rate of zero per
cent under section 4;
1[ ]
(43) “tax period” means a period of one month or such other period as the
Federal Government may, by notification in the official Gazette, specify;
1[(44) “time of supply,” in relation to,–
1 Clause (42) omitted by the Finance Act, 1997.
The Sales Tax Act, 1990
19
(a) a supply of goods, other than under hire purchase agreement,
means the time at which the goods are delivered or made
available to the recipient of the supply 2[or the time when any
payment is received by the supplier in respect of that supply,
whichever is earlier];
(b) a supply of goods under a hire purchase agreement, means the
time at which the agreement is entered into; and
(c) services, means the time at which the services are rendered or
provided:]
3[Provided that in respect of sub-clause (a), (b) or (c), where any
part payment is received,-
(i) for the supply in a tax period, it shall be accounted for in
the return for that tax period; and
(ii) in respect of exempt supply, it shall be accounted for in
the return for the tax period during which the exemptions
is withdrawn from such supply;]
(44A) “trust” means an obligation annexed to the ownership of property and
arising out of the confidence reposed in and accepted by the owner, or
declared and accepted by the owner for the benefit of another, or of
another and the owner, and includes a unit trust;
(44AA)“unit trust”, means any trust under which beneficial interests are
divided into units such that the entitlements of the beneficiaries to
income or capital are determined by the number of units held;
4[ ]
(46) “value of supply” means:--
(a) in respect of a taxable supply, the consideration in money
including all Federal and Provincial duties and taxes, if any,
which the supplier receives from the recipient for that supply but
excluding the amount of tax:
Provided that:–
1 Clause (44) substituted by the Finance Act, 2008. Earlier it was substituted by the Finance Act,
2007.
2 Words etc inserted by Finance Act, 2013.
3 Proviso inserted by Finance Act, 2013.
4 Clause (45) omitted by the Finance Act, 2004. At the time of omission clause (45) read as under:-
“turnover tax” means tax levied under section 3A of this Act.”
The Sales Tax Act, 1990
20
(i) in case the consideration for a supply is in kind or is partly
in kind and partly in money, the value of the supply shall
mean the open market price of the supply excluding the
amount of tax; 1[ ]
(ii) in case the supplier and recipient are associated persons
and the supply is made for no consideration or for a
consideration which is lower than the open market price,
the value of supply shall mean the open market price of
the supply excluding the amount of tax; and
(iii) in case a taxable supply is made to a consumer from
general public on installment basis on a price inclusive of
mark up or surcharge rendering it higher than open
market price, the value of supply shall mean the open
market price of the supply excluding the amount of tax.
(b) in case of trade discounts, the discounted price excluding the
amount of tax; provided the tax invoice shows the discounted
price and the related tax and the discount allowed is in
conformity with the normal business practices;
(c) in case where for any special nature of transaction it is difficult to
ascertain the value of a supply, the open market price;
(d) in case of imported goods, the value determined under section
25 of the Customs Act, including the amount of customs-duties
and central excise duty levied thereon;
(e) in case where there is sufficient reason to believe that the value
of a supply has not been correctly declared in the invoice, the
value determined by the Valuation Committee comprising
representatives of trade and the 2[Inland Revenue] constituted
by the 3[Commissioner]; and
(f) in case the goods other than taxable goods are supplied to a
registered person for processing, the value of supply of such
processed goods shall mean the price excluding the amount of
sales tax which such goods will fetch on sale in the market:
(g) in case of a taxable supply, with reference to retail tax, the price
of taxable goods excluding the amount of retail tax, which a
supplier will charge at the time of making taxable supply by him,
1 The word “and” omitted by the Finance Ordinance, 2001.
2 Substituted for “Sales Tax Department” by Finance Act, 2010. Earlier the same amendment was
made by Finance Amendment (Ordinance), 2010.
3 Substituted for “Collector” by Finance Act, 2010. Earlier the same amendment was made by
Finance Amendment (Ordinance), 2010.
The Sales Tax Act, 1990
21
or such other price as the Board may, by a notification in the
official Gazette, specify:
Provided that, where the Board deems it necessary it may, by
notification in the official Gazette, fix the value of any imported
goods or taxable supplies or class of supplies and for that
purpose fix different values for different classes or description of
same type of imported goods or supplies:
Provided further that where the value at which import or supply
is made is higher than the value fixed by the Board, the value of
goods shall, unless otherwise directed by the Board, be the
value at which the import or supply is made;
(47) “wholesaler” includes a dealer and means any person who carries on,
whether regularly or otherwise, the business of buying and selling
goods by wholesale or of supplying or distributing goods, directly or
indirectly, by wholesale for cash or deferred payment or for commission
or other valuable consideration or stores such goods belonging to
others as an agent for the purpose of sale; and includes a person
supplying taxable goods to a person who deducts income tax at source
under the Income Tax Ordinance, 2001 (XLIX of 2001); and
(48) “zero-rated supply” means a taxable supply which is charged to tax at
the rate of zero per cent under section 4.
The Sales Tax Act, 1990
22
Chapter-II
SCOPE AND PAYMENT OF TAX
3. Scope of tax.—
(1) Subject to the provisions of this Act, there shall be charged, levied and
paid a tax known as sales tax at the rate of 1[seventeen] per cent of the
value of--
(a) taxable supplies made 2[ ] by a registered person in the course or
furtherance of any 3[taxable activity] carried on by him; and
(b) goods imported into Pakistan.
4[(1A) Subject to the provision of sub-section (6) of section 8 or any
notification issued thereunder, where taxable supplies are made to a
person who has not obtained registration number, there shall be
charged, levied and paid a further tax at the rate of one per cent of the
value in addition to the rate specified in sub-section (1), (1B), (2), (5)
and (6):
Provided that the Federal Government may, by notification in the
official Gazette, specify the taxable supplies in respect of which the
further tax shall not be charged, levied and paid.
(1B) The Board may, by notification in the official Gazette, in lieu of levying
and collecting tax under sub-section (1) on taxable supplies, levy and
collect tax-
(a) on the production capacity of plants, machinery, undertaking,
establishments or installations producing or manufacturing such
goods; or
(b) on fixed basis, as it may deem fit, from any person who is in a
position to collect such tax due to the nature of the business.]
5[(2) Notwithstanding the provisions of sub-section (1),--
(a) taxable supplies specified in the Third Schedule shall be
charged to tax at the rate of 1[seventeen] per cent of the retail
1 Substituted for “Sixteen” by Finance Act, 2013. Earlier it was substituted for “seventeen” by
Finance Act, 2011.
2 The words “in Pakistan” omitted by Finance Act, 2003.
3 Words substituted by Finance Act, 1996 for the word “business”.
4 Sub-section (1A) and (1B) inserted by Finance Act, 2013.
5 Sub-section (2) substituted by Finance Ordinance, 2001. Earlier it was substituted by Finance
Act, 1996.
The Sales Tax Act, 1990
23
price which alongwith the amount of sales tax shall be legibly,
prominently and indelibly printed or embossed by the
manufacturer on each article, packet, container, package, cover
or label, as the case may be:
Provided that the Federal Government, may, by notification in
the official Gazette, exclude any taxable supply from the said
Schedule or include any taxable supply therein; 2[ ]
3[(aa) goods specified in the Eighth Schedule shall be charged to tax
at such rates and subject to such conditions and limitations as
specified therein; and]
(b) the Federal Government may, subject to such conditions and
restrictions as it may impose, by notification in the official
Gazette, declare that in respect of any goods or class of goods
imported into or produced 4[ ] or any taxable supplies made by a
registered person or a class of registered persons, the tax shall
be charged, collected and paid in such manner and at such
higher or lower rate or rates as may be specified in the said
notification.
(3) The liability to pay the tax shall be,--
(a) in the case of supply of goods 5[ ], of the person making the
supply, and
(b) in the case of goods imported into Pakistan, of the person
importing the goods.
6[(3A) Notwithstanding anything contained in clause (a) of sub-section (3), the
Federal Government may, by a notification in the official Gazette,
specify the goods in respect of which the liability to pay tax shall be of
the person receiving the supply.]
7[(3B) Notwithstanding anything contained in sub-sections (1) and (3), sales
tax on the import and supply of the goods specified in the Ninth
Schedule to this Act shall be charged, collected and paid at the rates,
in the manner, at the time, and subject to the procedure and conditions
as specified therein or as may be prescribed, and the liability to charge,
collect and pay the tax shall be on the persons specified therein.]
1 Substituted for “Sixteen” by Finance Act, 2013. Earlier it was substituted for “seventeen” by
Finance Act, 2011.
2 Omitted word “and” by the Finance Act, 2014.
3 Clause (aa) inserted by Finance Act, 2014.
4 Substituted for “; and” by the Finance Act, 2007.
5 The words “in Pakistan” omitted by Finance Act, 2003.
6 Sub-section (3A) inserted vide Finance Act, 1998.
7 Sub-section (3B) inserted by Finance Act, 2014.
The Sales Tax Act, 1990
24
1[ ]
2[(5) The Federal Government may, in addition to the tax levied under subsection
(1), 3[ ], 4[ ] sub-section (2) and sub-section (4), levy and collect
5[tax at such extra rate or amount] not exceeding 6[seventeen] per cent
of the value of such goods or class of goods and on such persons or
class of persons, in such mode, manner and at time, and subject to
such conditions and limitations as it may, by rules, prescribe.]
7[(6) The Federal Government or the 8[Board] may, in lieu of the tax under
sub-section (1), by notification in the official Gazette, levy and collect
such amount of tax as it may deem fit on any supplies or class of
supplies or on any goods or class of goods and may also specify the
mode, manner or time of payment of such amount of tax.]
9[(7) The Federal Government may, by notification in the official Gazette,
specify any person or class of persons as withholding agent for the
purpose of deduction and deposit of tax at the specified rate in such
manner and subject to such conditions or restrictions as the Federal
Government may prescribe in this behalf.]
10[(8) Notwithstanding anything contained in any law or notification made
thereunder, in case of supply of natural gas to CNG stations, the Gas
Transmission and Distribution Company shall charge sale tax from the
CNG Stations at the rate of seventeen per cent of the value of supply to
the CNG consumers, as notified by the Board from time to time, but
excluding the amount of sales tax, as provided in clauses (46) of
section 2.]
1 Sub-section (4) omitted by Finance Act, 2008.
2 Sub-section (5) inserted by Finance Act, 1999. Earlier it was omitted by the Finance Act, 1996.
3 Word etc. “and (1A)” omitted by Finance Act, 2004.
4 Word etc.“clause (c) of” omitted by Finance Ordinance, 2002.
5 Substituted for “such extra amount of tax” by Finance Act, 2013.
6 Substituted for “Sixteen” by Finance Act, 2013. Earlier it was substituted for “seventeen” by
Finance Act, 2011.
7 Sub-section (6) inserted by Finance Ordinance, 2001.
8 Substituted for “Central Board of Revenue” by Finance Act, 2007.
9 Sub-section (7) inserted by Finance Act, 2007.
10 Sub-section (8) substituted by Finance Act, 2014. Earlier same substituted through
Sales Tax (Amendment) Ordinance, 2014. Earlier it was inserted through Finance Act,
2013.
“(8) Notwithstanding the rate of sales tax as contained in sub-section (1) and notwithstanding anything
contained in any law or notification made there under, in case of supply of natural gas to CNG stations, the
Gas Transmission and Distribution Company shall charge sales tax from the CNG stations at the rate of nine
per cent in addition to the sales tax chargeable under sub-section (1) on the value of supply, where the value
for the purpose of levy of sales tax shall include price of natural gas, charges, rents, commissions and all
local provincial and Federal duties and taxes, but excluding the amount of sales tax, as provided in clause
(46) of section 2. This rate shall include the rate of tax chargeable under sub-section (1) and nine per cent in
lieu of value addition made by CNG stations. The rate of sales tax under this sub-section shall have effect
and shall be deemed to have taken effect on and from the 1st day of July 2007.
Explanation.- The rate of nine per cent in lieu of value addition in less than the standard rate of tax
chargeable under sub-section (1) as all input tax adjustments have been catered for while determining the
figure of nine per cent.”
The Sales Tax Act, 1990
25
1[(9) Notwithstanding anything contained in sub-section (1), tax shall be
charged from retailers through their monthly electricity bills, at the rate
of five per cent where the monthly bill amount does not exceed rupees
twenty thousand and at the rate of seven and half per cent where the
monthly bill amount exceeds the aforesaid amount, subject to the
exclusions, procedure, restrictions and limitations as prescribed in
Chapter II of the Sales Tax Special Procedure Rules, 2007:
Provided that the tax under this sub-section shall be in addition to the
tax payable on supply of electricity under sub-sections (1), (1A) and
(5).]
2[ ]
3[ ]
4[ ]
5[3B. Collection of excess tax etc.―
(1) Any person who has collected or collects any tax or charge, whether
under misapprehension of any provision of this Act or otherwise, which
was not payable as tax or charge or which is in excess of the tax or
charge actually payable and the incidence of which has been passed
on to the consumer, shall pay the amount of tax or charge so collected
to the Federal Government.
6[(2) Notwithstanding anything contained in any law or judgment of a court,
including the Supreme Court and a High Court, any amount payable to
the Federal Government under sub-section (1) shall be deemed to be
an arrear of tax or charge payable under this Act and shall be
recoverable accordingly and any claim for refund in respect of such
amount shall neither be admissible to the registered person nor
payable to any court of law or to any person under direction of the
court.]
1 Sub-section (9) inserted by Finance Act, 2014.
2 Section 3A omitted by Finance Act, 2004. Earlier it was substituted by Finance Act, 1999 which
was inserted by Finance Act, 1996.
3 Section 3AA omitted by Finance Act, 2008. Earlier it was substituted by Finance Act 1998. Earlier
on it was inserted by Finance Act, 1997.
4 Section 3AAA omitted by Finance Act, 2002. Earlier it was inserted by Sales Tax (Amendment)
Ordinance, 2000, dated September 05, 2000.
5 Old section 3A renumbered as 3B by Finance Act, 1996. Earlier it was inserted by Finance Act,
1994.
6 Sub-section (2) substituted Finance Act, 2014.
(2) Notwithstanding anything contained in any law or judgement of the court including Superior Courts, any
amount payable to the Federal Government under sub-Section (1) shall be deemed to be an arrear of tax or
charge payable under this act and shall be recoverable accordingly and any claim for refund in respect of such
amount shall neither be admissible to the registered person nor payable to nay court of law or to any person
under direction of the court.
Earlier it was substituted by Sales Tax (Amendment) Ordinance, 2014.
(2) “Any amount payable to the Federal Government under sub-section (1) shall be deemed to be an arrear of tax
or charge payable under this Act and shall be recoverable accordingly and no claim for refund in respect of
such amount shall be admissible.”
The Sales Tax Act, 1990
26
(3) The burden of proof that the incidence of tax or charge referred to in
sub-section (1) has been or has not been passed to the consumer shall
be on the person collecting the tax or charge.]
4. Zero rating.—
Notwithstanding the provisions of section 3, 1[ ] the following goods
shall be charged to tax at the rate of zero per cent:--
2[(a) goods exported, or the goods specified in the Fifth Schedule;]
(b) supply of stores and provisions for consumption aboard a
conveyance proceeding to a destination outside Pakistan as
specified in section 24 of the Customs Act, 1969 (IV of 1969);
(c) such other goods as the Federal Government may, by
notification in the official Gazette, specify:
(d) such other goods as may be specified by the Federal Board of
Revenue through a general order as are supplied to a registered
person or class of registered persons engaged in the
manufacture and supply of 3[goods at reduced rate of sales tax].
Provided that nothing in this section shall apply in respect
of a supply of goods which--
(i) are exported, but have been or are intended to be reimported
into Pakistan; or
(ii) have been entered for export under Section 131 of the
Customs Act, 1969 (IV of 1969), but are not exported; or
(iii) have been exported to a country specified by the Federal
Government, by Notification in the official Gazette:
Provided further that the Federal Government may, by a
notification in the official Gazette, restrict the amount of
credit for input tax actually paid and claimed by a person
making a zero-rated supply of goods otherwise
chargeable to sales tax.
1 The words “a supply of” omitted by Finance Act, 2004.
2 Clause (a) substituted by the Finance Act, 1998.
3 Words substituted for “zero-rated goods” by Finance Act, 2014.
The Sales Tax Act, 1990
27
5. Change in the rate of tax.—
1[ ] If there is a change in the rate of tax--
(a) a taxable supply made by a registered person shall be charged
to tax at such rate as is in force at the time of supply;
(b) imported goods shall be charged to tax at such rate as is in
force,--
(i) in case the goods are entered for home consumption, on
the date on which a 2[goods declaration] is presented
under section 79 of the Customs Act, 1969 (IV of 1969);
and
(ii) in case the goods are cleared from warehouse, on the
date on which a goods declaration for clearance of such
goods is presented under section 104 of the Customs
Act, 1969 (IV of 1969):
Provided that where a goods declaration is presented in
advance of the arrival of the conveyance by which the
goods are imported, the tax shall be charged as is in
force on the date on which the manifest of the
conveyance is delivered:
Provided further that if the tax is not paid within seven
days of the presenting of the goods declaration under
section 104 of the Customs Act, the tax shall be charged
at the rate as is in force on the date on which tax is
actually paid.
6. Time and manner of payment.―
(1) The tax in respect of goods imported into Pakistan shall be charged
and paid in the same manner and at the same time as if it were a duty
of customs payable under the Customs Act, 1969 and the provisions of
the said Act including section 31A thereof, shall so far as they relate to
collection, payment and enforcement of tax under this Act on such
goods where no specific provision exists in this Act, apply.
(1A) Notwithstanding anything contained in any other law for the time being
in force, including but not limited to the Protection of Economic
Reforms Act, 1992 (XII of 1992), and notwithstanding any decision or
judgment of any forum, authority or court whether passed, before or
after the promulgation of the Finance Act, 1998 (III of 1998), the
1 The bracket and figure “(1)” omitted by the Finance Act, 1996.
2 The word “bill of entry” substituted by the Finance Act, 2005.
The Sales Tax Act, 1990
28
provisions of section 31-A of the Customs Act, 1969 (IV of 1969),
referred to in sub-section (1) shall be incorporated in and shall be
deemed to have always been so incorporated in this Act and no person
shall be entitled to any exemption from or adjustment of or refund of tax
on account of the absence of such a provision in this Act, or in
consequence of any decision or judgment of any forum, authority or
court passed on that ground or on the basis of the doctrine of
promissory estoppel or on account of any promise or commitment
made or understanding given whether in writing or otherwise, by any
government department or authority.
(2) The tax in respect of taxable supplies made during a tax period shall be
paid by the registered person at the time of filing the return in respect of
that period under Chapter-V:
Provided that the Board may, by a notification in the official Gazette,
direct that the tax in respect of all or such classes of supplies (other
than zero-rated supplies) of all or such taxable goods, as may be
specified in the aforesaid notification, shall be charged, collected and
paid in any other way, mode, manner or at time as may be specified
therein.
(3) The tax due on taxable supplies shall be paid by any of the following
modes, namely:--
(i) through deposit in a bank designated by the Board; and
(ii) through such other mode and manner as may be specified by
the Board.
7. Determination of tax liability.―
(1) 1[Subject to the provisions of 2[sections 8 and] 8B, for] the purpose of
determining his tax liability in respect of taxable supplies made during a
tax period, a registered person shall, subject to the provisions of
section 73, be entitled to deduct input tax paid or payable during the tax
period for the purpose of taxable supplies made, or to be made, by him
from the output tax3[, excluding the amount of further tax under subsection
(1A) of section 3] that is due from him in respect of that tax
period and to make such other adjustments as are specified in Section
9 4[:]
1 The word “For” substituted by the Finance Act, 2007.
2 Substituted for “section” by Finance Act, 2014.
3 Words etc inserted by Finance Act, 2014.
4 The full stop substituted by the Finance Act, 2003.
The Sales Tax Act, 1990
29
1[Provided that where a registered person did not deduct input tax
within the relevant period, he may claim such tax in the return for any of
the six succeeding tax periods.]
(2) A registered person shall not be entitled to deduct input tax from output
tax unless,--
(i) in case of a claim for input tax in respect of a taxable supply made,
he holds a tax invoice in his name and bearing his registration
number in respect of such supply for which a return is furnished;
2[(ii) in case of goods imported into Pakistan, he holds bill of entry or
goods declaration in his name and showing his sales tax
registration number, duly cleared by the customs under section 79
or section 104 of the Customs Act, 1969 (IV of 1969);]
3[(iii) in case of goods purchased in auction, he holds a treasury challan,
in his name and bearing his registration number, showing payment
of sales tax;]
4[ ]
5[(3) Notwithstanding anything in sub-sections (1) and (2), the Federal
Government may, by a special order, subject to such conditions,
limitations or restrictions as may be specified therein allow a registered
person to deduct input tax paid by him from the output tax determined
or to be determined as due from him under this Act.]
6[(4) Notwithstanding anything contained in this Act or rules made
thereunder, the Federal Government may, by notification in the official
Gazette, subject to such conditions, limitations or restrictions as may
be specified therein, allow a registered person or class of persons to
deduct such amount of input tax from the output tax as may be
specified in the said notification].
7[7A. Levy and collection of tax on specified goods on value addition.—
8[(1)] Notwithstanding anything contained in this Act or the rules made
thereunder, the Federal Government may specify, by notification in the
official Gazette, that sales tax chargeable on the supply of goods of
1 The proviso substituted by the Finance Act, 2008. Earlier it was inserted by the Finance Act,
2003.
2 The word inserted by Finance Act, 2003.
3 Clause (iii) inserted by the Finance Ordinance, 2002. Earlier it was omitted by the Finance Act,
1996.
4 Clause (iv) omitted by the Finance Act, 1997. Earlier it was substituted by the Finance Act, 1996.
5 Sub-section (3) inserted by the Finance Ordinance, 2002.
6 Sub-section (4) inserted by the Finance Act, 2007.
7 Section 7A inserted by the Finance Act, 2003.
8 Re-numbered by the Finance Act, 2004.
The Sales Tax Act, 1990
30
such description or class shall, with such limitations or restrictions as
may be prescribed, be levied and collected on the difference between
the value of supply for which the goods are acquired and the value of
supply for which the goods, either in the same state or on further
manufacture, are supplied.
(2) Notwithstanding anything contained in this Act or the rules made
thereunder, the Federal Government may, by notification in the official
Gazette, and subject to the conditions, limitations, restrictions and
procedure mentioned therein, specify the minimum value addition
required to be declared by certain persons or categories of persons, for
supply of goods of such description, or class as may be prescribed,
and to waive the requirement of audit or scrutiny of records if such
minimum value addition is declared.]
1[8. Tax credit not allowed.—
(1) Notwithstanding anything contained in this Act, a registered person
shall not be entitled to reclaim or deduct input tax paid on--
2[(a) the goods 3[or services] used or to be used for any purpose
other than 4[ ] for taxable supplies made or to be made by him;]
(b) any other goods or services which the Federal Government
may, by a notification in the official Gazette, specify;
5[(c) 6[ ] the goods under 7[sub-section] (5) of section 3;]
8[(ca) the goods or services in respect of which sales tax has not been
deposited in the Government treasury by the respective
supplier;]
9[(caa) purchases, in respect of which a discrepancy is indicated by
CREST or input tax of which is not verifiable in the supply chain;]
10[(d) fake invoices; ]
1 Section 8 substituted by the Finance Act, 1996.
2 Clause (a) substituted by the Sales Tax (Amendment) Ordinance, 2001, dated February 7, 2001.
3 The words inserted by the Finance Act, 2008.
4 The words “for the manufacture or production of taxable goods or” omitted by the Finance Act,
2007.
5 Clause (c) inserted by Finance Act, 1999.
6 The word “on” omitted by the Finance Act, 2004
7 The words and figure “sub-sections (1A) and” substituted by the Finance Act, 2004.
8 Clause (ca) inserted by the Finance Act, 2006.
9 Clause (caa) inserted by Finance Act, 2013.
10 Clause (d) inserted by the Finance Act, 2004.
The Sales Tax Act, 1990
31
1[(e) purchases made by such registered person, in case he fails to
furnish the information required by the Board through a
notification issued under sub-section (5) of section 26;]
2[(f) goods and services not related to the taxable supplies made by
the registered person;
(g) goods and services acquired for personal or non-business
consumption;
(h) goods used in, or permanently attached to, immoveable
property, such as building and construction materials, paints,
electrical and sanitary fittings, pipes, wires and cables, but
excluding such goods acquired for sale or re-sale or for direct
use in the production or manufacture of taxable goods; and
(i) vehicles falling in Chapter 87 of the First Schedule to the
Customs Act, 1969 (IV of 1969), parts of such vehicles, electrical
and gas appliances, furniture, furnishings, office equipment
(excluding electronic cash registers), but excluding such goods
acquired for sale or re-sale.]
(2) If a registered person deals in taxable and non-taxable supplies, he can
reclaim only such proportion of the input tax as is attributable to taxable
supplies in such manner as may be specified by the Board.
(3) No person other than a registered person shall make any deduction or
reclaim input tax in respect of taxable supplies made or to be made by
him.
3[ ]
4[(5) Notwithstanding anything contained in any other law for the time being
in force or any decision of any Court, for the purposes of this section,
no input tax credit shall be allowed to the persons who paid fixed tax
under any provisions of this Act as it existed at any time prior to the first
day of December, 1998.]
5[(6) Notwithstanding anything contained in any other law for the time being
in force or any provision of this Act, the Federal Government may, by
notification in the official Gazette, specify any goods or class of goods
1 Clause (e) inserted by the Finance Act, 2004.
2 Clause (f) to (i) inserted by Finance Act, 2014.
3 Sub-section (4) omitted by the Finance Act, 2004.
4 Sub-section (5) inserted by the Finance Act, 1999
5 Sub-section (6) inserted by the Sales Tax (Amendment) Ordinance, 2001, dated February 7,
2001.
The Sales Tax Act, 1990
32
which a registered 1[ ] person cannot supply to any person who is not
registered [ ] under this Act.]
2[ ]
3[8A. Joint and several liability of registered persons in supply chain
where tax unpaid.–
Where a registered person receiving a taxable supply from another
registered person is in the knowledge or has reasonable grounds to
suspect that some or all of the tax payable in respect of that supply or
any previous or subsequent supply of the goods supplied would go
unpaid, such person as well as the person making the taxable supply
shall be jointly and severally liable for payment of such unpaid amount
of tax 4[:] ]
5[Provided that the Board may by notification in the official gazette,
exempt any transaction or transactions from the provisions of this
section.]
6[8B. Adjustable input tax.–
(1) Notwithstanding anything contained in this Act, in relation to a tax
period, a registered person shall not be allowed to adjust input tax in
excess of ninety per cent of the output tax for that tax period:
7[Provided that the restriction on the adjustment of input tax in excess
of ninety per cent of the output tax shall not apply in case of fixed
assets or capital goods:]
Provided further that the Board may, by notification in the official
Gazette, exclude any person or class of persons from the purview of
sub-section (1).
(2) A registered person, subject to sub-section (1), may be allowed
adjustment or refund of input tax not allowed under sub-section (1)
subject to the following conditions, namely:–
(i) in the case of registered persons, whose accounts are subject to
audit under the Companies Ordinance, 1984, upon furnishing a
statement along with annual audited accounts, duly certified by
1 The word “or enrolled” omitted by Finance Act, 2004.
2 Sub-section (7) omitted by the Finance Act, 2004. Earlier it was inserted by the Sales Tax
(Amendment) Ordinance, 2001, dated February 7, 2001.
3 Section 8A inserted by the Finance Act, 2006.
4 Full stop substituted by the Finance Act, 2007.
5 The proviso inserted by the Finance Act, 2007
6 Section 8B inserted by the Finance Act, 2007.
7 The provision substituted by Finance Act, 2011
The Sales Tax Act, 1990
33
the auditors, showing value additions less than the limit
prescribed under sub-section (1) above; or
(ii) in case of other registered persons, subject to the conditions and
restrictions as may be specified by the Board by notification in
the official Gazette.
(3) The adjustment or refund of input tax mentioned in sub-section (2), if
any, shall be made on yearly basis in the second month following the
end of the financial year of the registered person.
(4) Notwithstanding anything contained in sub-section (1) and (2), the
Board may, by notification in the official Gazette, prescribe any other
limit of input tax adjustment for any person or class of persons.
(5) Any auditor found guilty of misconduct in furnishing the certificate
mentioned in sub-section (2) shall be referred to the Council for
disciplinary action under section 20D of Chartered Accountants,
Ordinance, 1961 (X of 1961).]
9. Debit and credit note.—
Where a registered person has issued a tax invoice in respect of a
supply made by him and as a result of cancellation of supply or return
of goods or a change in the nature of supply or change in the value of
the supply or some such event the amount shown in the tax invoice or
the return needs to be modified, the registered person may, subject to
such conditions and limitations as the Board may impose, issue a debit
or credit note and make corresponding adjustment against output tax in
the return.
1[10. Refund of input tax.—
(1) If the input tax paid by a registered person on taxable purchases made
during a tax period exceeds the output tax on account of zero rated
local supplies or export made during that tax period, the excess amount
of input tax shall be refunded to the registered person not later than
forty-five days of filing of refund claim in such manner and subject to
such conditions as the Board may, by notification in the official Gazette
specify:
2[Provided that in case of excess input tax against supplies other than
zero-rated or exports, such excess input tax may be carried forward to
the next tax period, alongwith the input tax as is not adjustable in terms
of sub-section (1) of section 8B, and shall be treated as input tax for
1 Section 10 substituted by the Finance Act, 2007. Earlier it was substituted by the Finance Act,
1998 which was substituted by the Finance Act, 1996.
2 The proviso substituted by the Finance Act, 2008.
The Sales Tax Act, 1990
34
that period and the Board may, subject to such conditions and
restrictions as it may impose, by notification in the official Gazette,
prescribe the procedure for refund of such excess input tax:]
Provided further that the Board may, from such date and subject to
such conditions and restrictions as it may impose, by notification in the
official Gazette, direct that refund of input tax against exports shall be
paid along with duty drawback at the rates notified in the said
notification.
(2) If a registered person is liable to pay any tax, default surcharge or
penalty payable under any law administered by the Board, the refund of
input tax shall be made after adjustment of unpaid outstanding amount
of tax or, as the case may, default surcharge and penalty.
(3) Where there is reason to believe that a person has claimed input tax
credit or refund which was not admissible to him, the proceedings
against him shall be completed within sixty days. For the purposes of
enquiry or audit or investigation regarding admissibility of the refund
claim, the period of sixty days may be extended up to one hundred and
twenty days by an officer not below the rank of an Additional
1[Commissioner Inland Revenue] and the Board may, for reasons to be
recorded in writing, extend the aforesaid period which shall in no case
exceed nine months.]
1 Substituted for “collector of Sales Tax” by Finance Act, 2010. Earlier same amendment made by
Finance (Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
35
1[11. Assessment of tax and recovery of tax not levied or short-levied or
erroneously refunded.―
(1) Where a person who is required to file a tax return fails to file the return
for a tax period by the due date or pays an amount which, for some
miscalculation is less than the amount of tax actually payable, an
officer of Inland Revenue shall, after a notice to show cause to such
person, make an order for assessment of tax, including imposition of
penalty and default surcharge in accordance with sections 33 and 34:
Provided that where a person required to file a tax return files the return
after the due date and pays the amount of tax payable in accordance
with the tax return along with default surcharge and penalty, the notice
to show cause and the order of assessment shall abate.
(2) Where a person has not paid the tax due on supplies made by him or
has made short payment or has claimed input tax credit or refund
which is not admissible under this Act for reasons other than those
specified in sub-section (1), an officer of Inland Revenue shall, after a
notice to show cause to such person, make an order for assessment of
tax actually payable by that person or determine the amount of tax
credit or tax refund which he has unlawfully claimed and shall impose a
penalty and charge default surcharge in accordance with sections 33
and 34.
1 Section 11 substituted by the Finance Act, 2012.
[11. Assessment of Tax.―
(1) Where a person who is required to file a tax return fails to file the return for a tax period by the
due date or pays an amount which, for some miscalculation is less than the amount of tax
actually payable, an officer of Inland Revenue shall, after a notice to show cause to such person,
make an order for assessment of tax, including imposition of penalty and default surcharge in
accordance with section 33 and 34:
Provided that where a person required to file a tax return files the return after the due date and
pays the amount of tax payable in accordance with the tax return alongwith default surcharge
and penalty, the notice to show cause and the order of assessment shall abate.
(2) Where a person has not paid the tax due on supplies made by him or has made short payment or
has claimed input tax credit or refund which is not admissible under this Act for reasons other
than those specified in sub-section (1), an officer of [Inland Revenue] shall make an assessment
of sales tax actually payable by that person or determine the amount of tax credit or tax refund
which he has unlawfully claimed and shall impose a penalty and charge default surcharge in
accordance with section 33 and 34.
[ ]
(4) No order under this section shall be made by an officer of [Inland Revenue] unless a notice to
show cause is given [within five years] to the person in default specifying the grounds on which it
is intended to proceed against him and the officer of 1[Inland Revenue] shall take into
consideration the representation made by such person and provide him with an opportunity of
being heard [:]
[Provided that order under this section shall be made within [one hundred and twenty] days of
issuance of show cause notice or within such extended period as the [Commissioner] may, for
reasons to be recorded in writing, fix provided that such extended period shall in no case exceed
sixty days:]
Provided further that any period during which the proceedings are adjourned on account of a stay
order or Alternative Dispute Resolution proceedings or the time taken through adjournment by
the petitioner not exceeding thirty days shall be excluded from the computation of the period
specified in the first proviso.
(5) Notwithstanding anything in sub-section (1), where a registered person fails to file a return, an
officer of Inland Revenue, not below the rank of Assistant 1[Commissioner], shall subject to such
conditions as specified by the Central Board of Revenue, determine the minimum tax liability of
the registered person.]
The Sales Tax Act, 1990
36
(3) Where by reason of some collusion or a deliberate act any tax or
charge has not been levied or made or has been short-levied or has
been erroneously refunded, the person liable to pay any amount of tax
or charge or the amount of refund erroneously made shall be served
with a notice requiring him to show cause for payment of the amount
specified in the notice.
(4) Where, by reason of any inadvertence, error or misconstruction, any
tax or charge has not been levied or made or has been short-levied or
has been erroneously refunded, the person liable to pay the amount of
tax or charge or the amount of refund erroneously made shall be
served with a notice requiring him to show cause for payment of the
amount specified in the notice:
Provided that, where a tax or charge has not been levied under this
sub-section, the amount of tax shall be recovered as tax fraction of the
value of supply.
(5) No order under this section shall be made by an officer of Inland
Revenue unless a notice to show cause is given within five years, of
the relevant date, to the person in default specifying the grounds on
which it is intended to proceed against him and the officer of Sales Tax
shall take into consideration the representation made by such person
and provide him with an opportunity of being heard:
Provided that order under this section shall be made within one
hundred and twenty days of issuance of show cause notice or within
such extended period as the Commissioner may, for reasons to be
recorded in writing, fix provided that such extended period shall in no
case exceed ninety days:
Provided further that any period during which the proceedings are
adjourned on account of a stay order or Alternative Dispute Resolution
proceedings or the time taken through adjournment by the petitioner
not exceeding sixty days shall be excluded from the computation of the
period specified in the first proviso.
(6) Notwithstanding anything contained in sub-section (1), where a
registered person fails to file a return, an officer of Inland Revenue, not
below the rank of Assistant Commissioner, shall subject to such
conditions as specified by the Federal Board of Revenue, determine
the minimum tax liability of the registered person.
(7) For the purpose of this section, the expression "relevant date" means--
(a) the time of payment of tax or charge as provided under section
6; and
(b) in a case where tax or charge has been erroneously refunded,
the date of its refund.]
1[11A. Short paid amounts recoverable without notice.–
Notwithstanding any of the provisions of this Act, where a registered
person pays the amount of tax less than the tax due as indicated in his
1 Section 11A inserted by Finance Ordinance, 2002.
The Sales Tax Act, 1990
37
return, the short paid amount of tax along with default surcharge shall
be recovered from such person by stopping removal of any goods from
his business premises and through attachment of his business bank
accounts, without giving him a show cause notice and without prejudice
to any other action prescribed under section 48 of this Act or the rules
made thereunder:
Provided that no penalty under section 33 of this Act shall be imposed
unless a show cause notice is given to such person.]
1[ ]
2[13. Exemption.―
(1) Notwithstanding the provisions of section 3, supply of goods or import
of goods specified in the Sixth Schedule shall, subject to such
conditions as may be specified by the Federal Government, be exempt
from tax under this Act.
(2) Notwithstanding the provisions of sub-section (1)–
(a) the Federal Government may, by notification in the official
Gazette, exempt any taxable supplies made or import or supply
of any goods or class of goods, from the whole or any part of the
tax chargeable under this Act, subject to the conditions and
limitations specified therein; and
(b) the Board may, by special order in each case stating the
reasons, exempt any import or supply of goods of such
description or class, as may be specified from the payment of
the whole or any part of the tax chargeable under this Act.
(3) The exemption from tax chargeable under sub-section (2) may be
allowed from any previous date specified in the notification issued
under clause (a) or, as the case may be, order made under clause (b)
of that sub-section.
(4) [Omitted by Finance Act, 2006]]
1 Section 12 omitted by Finance Act, 1996.
2 Section 13 substituted by the Finance Act, 1996.
The Sales Tax Act, 1990
38
Chapter-III
REGISTRATION
14. Registration. –
Under this Act, registration will be required for such persons and be
regulated in such manner and subject to rules as the Board may, by
notification in the official Gazette, prescribe.
15. Omitted [Omitted by Finance Act, 2004]
16. Omitted [Omitted by Finance Act, 2003]
17. Omitted [Omitted by Finance Act, 2004]
18. Omitted [Omitted by Finance Act, 2004]
19. Omitted [Omitted by Finance Act, 2004]
20. Omitted [Omitted by Finance Act, 2004]
1[21. De-registration, blacklisting and suspension of registration.—
(1) The Board or any officer, authorized in this behalf, may subject to the
rules, de-register a registered person or such class of registered
persons not required to be registered under this Act.
(2) Notwithstanding anything contained in this Act, in cases where the
2[Commissioner] is satisfied that a registered person is found to have
issued fake invoices or has otherwise committed tax fraud, he may
blacklist such person or suspend his registration in accordance with
such procedure as the Board may, by notification in the official Gazette,
prescribe.
3[(3) During the period of suspension of registration, the invoices issued by
such person shall not be entertained for the purposes of sales tax
refund or input tax credit, and once such person is blacklisted, the
refund or input tax credit claimed against the invoices issued by him,
whether prior or after such blacklisting, shall 4[ ] be rejected through a
1 Section 21 substituted by the Finance Act, 2004. Earlier it was substituted by the Finance Act,
1998.
2 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
3 Sub-section (3) inserted by Finance Act, 2011.
4 Words etc omitted “unless the registered buyer has fulfilled his responsibilities under
section 73” by Finance Act, 2013.
The Sales Tax Act, 1990
39
self-speaking appealable order and after affording an opportunity of
being heard to such person.]
1[(4) Notwithstanding anything contained in this Act, where the Board, the
concerned Commissioner or any officer authorized by the Board in this
behalf has reasons to believe that a registered person is engaged in
issuing fake or flying invoices, claiming fraudulent input tax or refunds,
does not physically exist or conduct actual business, or is committing
any other fraudulent activity, the Board, concerned Commissioner or
such officer may after recording reasons in writing, block the refunds or
input tax adjustments of such person and direct the concerned
Commissioner having jurisdiction for further investigation and
appropriate legal action.]
Chapter-IV
BOOK KEEPING AND INVOICING REQUIREMENTS
22. Records.–
(1) A registered person making taxable supplies shall maintain and keep at
his business premises or registered office in English or Urdu language
the following records of goods purchased, imported and supplied
(including zero-rated and exempt supplies) made by him or by his
agent acting on his behalf in such form and manner as would permit
ready ascertainment of his tax liability during a tax period-
(a) records of supplies made shall indicate the description, quantity
and value of goods, name and address of the person to whom
supplies were made and the amount of the tax charged;
(b) records of goods purchased shall show the description, quantity
and value of goods, name, address and registration number of
the supplier and the amount of the tax on purchases;
(c) records of goods imported shall show the description, quantity
and value of goods and the amount of tax paid on imports;
(d) records of zero-rated and exempt supplies;
(da) double entry sales tax accounts;
(e) invoices, credit notes, debit notes, bank statements, banking
instruments in terms of section 73, inventory records, utility
1 Sub-section (4) inserted by Finance Act, 2013.
The Sales Tax Act, 1990
40
bills, salary and labour bills, rental agreements, sale purchase
agreements and lease agreements; 1[ ]
2[(ea) record relating to gate passes, inward or outward, and transport
receipts.]
(f) such other records as may be specified by the Board:
Provided that the persons paying retail tax shall keep such
record as may be specified by the Board.
(1A) Notwithstanding anything in any other law for the time being in force,
the Board may require, by notification in the official Gazette, a
registered person or class of registered persons to declare and use
only as many number of business bank accounts as may be specified
by the Board in such notification to make or receive payments on
account of purchase and sale transactions for the purpose of this Act or
rules made thereunder and to make payment of due tax from such
accounts only.
(2) The Board may, by notification in the official Gazette, specify for any
class of taxable persons or any other person registered under this Act
to keep such other records for the purposes of this Act.
(2A) The Board may, by notification in the official Gazette, specify for any
class of taxable persons registered under this Act to use such
electronic fiscal cash registers as are approved by the Board in the
manner as may be prescribed.
(3) The Board may, by notification in the official gazette, prescribe the
procedure or software for electronically maintenance of records, filing
of sales tax returns or refunds and for any other matter or approve any
software for electronic maintenance of records and filing of returns or
refunds by a person or class of such persons.
(4) The registered persons, whose accounts are subject to audit under the
Companies Ordinance, 1984 (XLVII of 1984), shall be required to
submit a copy of the annual audited accounts, along with a certificate
by the auditors certifying the payment of due tax by the registered
person.
23. Tax Invoices.-
(1) A registered person making a taxable supply shall issue a serially
numbered tax invoice at the time of supply of goods containing the
following particulars, namely:-
1 Word “and” omitted by Finance Act, 2013.
2 Clause (ea) inserted by Finance Act, 2013.
The Sales Tax Act, 1990
41
(a) name, address and registration number of the supplier;
(b) name, address and registration number of the recipient;
(c) date of issue of invoice;
(d) description and quantity of goods;
(e) value exclusive of tax;
(f) amount of sales tax; and
(ff) [Omitted by Finance Act, 2004]
(g) value inclusive of tax:
Provided that the Board may, by notification in the official
Gazette, specify such modified invoices for different persons or
classes of persons:
Provided further that not more than one tax invoice shall be
issued for a taxable supply.
(2) No person other than a registered person or a person paying retail tax
shall issue an invoice under this section.
(3) A registered person making a taxable supply may, subject to such
conditions, restrictions and limitations as the Board may, by notification
in the official Gazette, specify, issue invoices to another registered
person electronically and to the Board as well as to the
1[Commissioner], as may be specified.
(4) The Board may, by notification in the official Gazette, prescribe the
manner and procedure for regulating the issuance and authentication
of tax invoices.
24. Retention of record and documents for 2[six] years.-
A person who is required to maintain any record or documents under
this Act, shall retain the record and documents for a period of 2[six]
years after the end of the tax period to which such record or documents
relate 3[or till such further period the final decision in any proceedings
including proceedings for assessment, appeal, revision, reference,
petition and any proceedings before an Alternative Dispute Resolution
1 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
2 Substituted for “five” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
3 Words inserted by Finance Act, 2010.
The Sales Tax Act, 1990
42
Committee is finalized] or till the final decision in any proceedings
including proceedings for assessment, appeal, revision, reference,
petition and any proceedings before an alternative Dispute Resolution
Committee.
25. Access to record, documents, etc.-
(1) A person who is required to maintain any record or documents under
this Act or any other law shall, as and when required by
1[Commissioner], produce record or documents which are in his
possession or control or in the possession or control of his agent; and
where such record or documents have been kept on electronic data, he
shall allow access to 2[the officer of Inland Revenue authorized by the
Commissioner] and use of any machine on which such data is kept.
3[(2) The officer of Inland Revenue authorized by Commissioner, on the
basis of the record, obtained under sub-section (1), may, once in a
year, conduct audit:
Provided that in case the Commissioner has information or sufficient
evidence showing that such registered person is involved in tax fraud
or evasion of tax, he may authorize an officer of Inland Revenue, not
below the rank of Assistant Commissioner, to conduct an inquiry or
investigation under section 38:
Provided further that nothing in this sub-section shall bar the officer of
Inland Revenue from conducting audit of the records of the registered
person if the same were earlier audited by the office of the Auditor-
General of Pakistan.]
4[(3) After completion of the audit under this section or any other provision of
this Act, the officer of Inland Revenue may, after obtaining the
registered person‘s explanation on all the issues raised in the audit
shall pass an order under section 11 or section 36, as the case may
be.]
5[(4) Omitted by Finance Act, 2010]
(4A) After completion of the audit under this section or this any other
provision of law, the officer of Inland Revenue may, if considered
necessary, after obtaining the registered person’s explanation on all the
issues raised in the audit shall pass an order under section 11 or
section 36, as the case may be, imposing the correct amount of tax,
1 Substituted for “an officer of Sales Tax” by Finance Act, 2010.
2 Substituted for “such officer of Sales Tax” by Finance Act, 2010.
3 Substituted sub-section (2) by Finance Act, 2010.
4 Substituted sub-section (3) by Finance Act, 2010.
5 Sub-section (4) omitted by Finance Act, 2010.
The Sales Tax Act, 1990
43
charging default surcharge, imposing penalty and recovery amount
erroneously refunded.
(5) Notwithstanding the penalties prescribed in section 33, if a registered
person wishes to deposit the amount of tax short paid or amount of tax
evaded along with default surcharge voluntarily, whenever it comes to
his notice, before receipt of notice of audit, no penalty shall be
recovered from him:
Provided if a registered person wishes to deposit the amount of tax
short paid or amount of tax evaded along with default surcharge during
the audit, or at any time before issuance of show cause notice 1[ ], he
may deposit the evaded amount of tax, default surcharge under section
34, and twenty five per cent of the penalty payable under section 33:
Provided further that if a registered person wishes to deposit the
amount of tax short paid or amount of tax evaded along with default
surcharge after issuance of show cause notice, he shall deposit the
evaded amount of tax, default surcharge under section 34, and full
amount of the penalty payable under section 33 and thereafter, the
show cause notice, shall stand abated.
2[Explanation.- For the purpose of sections 25, 38, 38A, 38B and 45A
and for removal of doubt, it is declared that the powers of the Board,
Commissioner or officer of Inland Revenue under these sections are
independent of the powers of the Board under section 72B and nothing
contained in section 72B restricts the powers of the Board,
Commissioner or officer of Inland Revenue to have access to premises,
stocks, accounts, records, etc. under these sections or to conduct audit
under these sections.]
25A. Drawing of samples.-
Where an authorized officer of 3[Inland Revenue] considers it
necessary to take a sample of any goods or raw materials, for the
purpose of determining their liability to sales tax or for the purpose of
establishing their value or for any other reason, he may remove a
minimum quantity of goods or raw materials sufficient to enable a
proper examination or analysis to be made. At the time of taking the
sample the person in possession of the goods shall be informed and
given the opportunity to sign the representative samples, so drawn, and
take a corresponding sample for his record. Any sample taken under
this section shall be taken against a proper receipt a copy each of
1 Words for “in lieu of the audit report” omitted in Finance Act, 2010.
2 Explanation inserted by Finance Act, 2013.
3 Substituted for “Sales Tax” in Finance Act, 2010. Earlier same amendment made in Finance
(amendment) Ordinance, 2010.
The Sales Tax Act, 1990
44
which shall be kept in the record by the registered person and the
1[Large Taxpayers Unit or Regional Tax Office, as the case may be]:
2[25AA.Transactions between associates.-
The Commissioner or an officer of Inland Revenue may, in respect of
any transaction between persons who are associates, determine the
transfer price of taxable supplies between the persons as is necessary
to reflect the fair market value of supplies in an arm’s length
transaction;]
1 Substituted for “Collectorate” in Finance Act, 2010. Earlier same amendment made in Finance
(amendment) Ordinance, 2010.
2 Section 25AA inserted by Finance Act, 2010. Earlier same amendment made by Finance
(amendment) Ordinance, 2010.
The Sales Tax Act, 1990
45
Chapter-V
RETURNS
26. Return.–
(1) Every registered person shall furnish not later than the due date a true
and correct return in the prescribed form to a designated bank or any
other office specified by the Board, indicating the purchases and the
supplies made during a tax period, the tax due and paid and such other
information, as may be prescribed:
Provided that the Board may, by notification in the official Gazette,
require any person or class of persons to submit return on quarterly
basis:
Provided further that the Board may, by notification in the official
Gazette, require any person or class of persons to submit such return
as may be prescribed annually in addition to the monthly return or
quarterly return:
Provided also that the return filed electronically on the web or any
magnetic media or any other computer readable media as may be
specified by the Board shall also be deemed to be a return for the
purpose of sub-section (1) and the Board may, by notification in the
official Gazette, make rules for determining eligibility of the data of such
returns and e-intermediaries who will digitize the data of such returns
and transmit the same electronically under their digital signatures.
(2) If there is a change in the rate of tax during a tax period, a separate
return in respect of each portion of tax period showing the application
of different rates of tax shall be furnished.
(3) A registered person may, subject to approval of the 1[Commissioner
Inland Revenue] having jurisdiction, file a revised return within one
hundred and twenty days of the filing of return under sub-section (1) or,
as the case may be, sub-section (2) 2[or under clause (a) or clause (b)
of section 27], to correct any omission or wrong declaration made
therein.
(4) Notwithstanding the penalties prescribed in section 33, if a registered
person wishes to file revised return voluntarily along with deposit of the
amount of tax short paid or amount of tax evaded along with default
surcharge, whenever it comes to his notice, before receipt of notice of
audit, no penalty shall be recovered from him:
1 Substituted for “Collector of Sales Tax” by Finance Act, 2010. Earlier same amendment made in
Finance (amendment) Ordinance, 2010.
2 Words etc inserted by Finance Act, 2011.
The Sales Tax Act, 1990
46
Provided that in case the registered person wishes to deposit the
amount of tax as pointed out by the officer of 1[Inland Revenue] during
the audit, or at any time before issuance of the show cause notice 2[ ],
he may deposit the evaded amount of tax, default surcharge under
section 34, and twenty-five per cent of the penalty payable under
section 33 along with the revised return:
Provided further that in case the registered person wishes to deposit
the amount after issuance of show cause notice, he shall deposit the
evaded amount of sales tax, default surcharge under section 34, and
full amount of the leviable penalty under section 33 along with the
revised return and thereafter, the show cause notice, shall stand
abated.
(5) The Board may, by notification in the official Gazette, require any
person or class of persons, for any goods of such description or class,
to furnish such summary or details or particulars pertaining to the
imports, purchases and supplies during any tax period or periods, in
such format as may be specified.
26A. [Omitted by Finance Act, 2004]
26AA. [Omitted by Finance Act, 2008]
27. Special Returns.--
In addition to the return specified under section 26--
(a) a person registered under this Act shall furnish special return
within such date and in such form indicating information such as
quantity manufactured or produced, purchases made, goods
supplied or payment of arrears made, etc, for such period as the
Board may, by a notification in official Gazette, specify; and
(b) the 3[Commissioner] may require any person whether, registered
or not, to furnish a return (whether on his own behalf or as an
agent or trustee) in a prescribed form and such person shall
furnish the return not later than the date specified in this regard.
28. Final Return.-
If a person applies for de-registration in terms of section 21, he shall
before such de-registration, furnish a final return to the
1 Substituted by “Sales Tax” by Finance Act, 2010.
2 Words “in lieu of the audit report” omitted by Finance Act, 2010.
3 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made in Finance
(amendment) Ordinance, 2010.
The Sales Tax Act, 1990
47
1[Commissioner] in the specified form in such manner and at such time
as directed by the 1[Commissioner].
29. Return deemed to have been made.-
A return purporting to be made on behalf of a person by his duly
appointed representative shall, for all purposes, be deemed to have
been made by such person or under his authority unless proved to the
contrary.
1 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made in Finance
(amendment) Ordinance, 2010.
The Sales Tax Act, 1990
48
Chapter-VI
APPOINTMENT OF AUTHORITIES & THEIR POWERS
1[30. Appointment of Authorities.—
(1) For the purposes of this Act, the board may, appoint in relation to any
area, person or class of persons, any person to be-
(a) a Chief Commissioner Inland Revenue;
(b) a Commissioner of Inland Revenue ;
(c) a Commissioner of Inland Revenue (Appeals);
(d) an Additional Commissioner Inland Revenue ;
(e) a Deputy Commissioner Inland Revenue;
(f) an Assistant Commissioner Inland Revenue;
(g) an Inland Revenue Officer;
(h) a Superintendent Inland Revenue;
(i) an Inland Revenue Audit Officer; 2[ ]
3[(ia) an Inspector Inland Revenue; and]
(j) an officer of Inland Revenue with any other designation.
(2) The Chief Commissioner Inland Revenue and Commissioner Inland
Revenue (Appeals) shall be subordinate to the Board and
Commissioner Inland Revenue shall be subordinate to the Chief
Commissioner Inland Revenue.
(3) Additional Commissioner Inland Revenue, Deputy Commissioners
Inland Revenue, Assistant Commissioner Inland Revenue,
Superintendent Inland Revenue, Inland Revenue Audit Officer, Inland
Revenue Officer4[, Inspector Inland Revenue] and officer of Inland
Revenue with any other designation shall be subordinate to the
Commissioner Inland Revenue and shall perform their functions in
respect of such persons or classes of persons or such areas as the
Commissioners, to whom they are subordinate, may direct.
1 Substituted Section 30 by Finance Act, 2010.
2 Word “and” omitted by Finance Act, 2011.
3 Clause (ia) inserted by Finance Act, 2011.
4 Words inserted by Finance Act, 2011.
The Sales Tax Act, 1990
49
(4) Deputy Commissioner Inland Revenue, Assistant Commissioner Inland
Revenue, Superintendent Inland Revenue, Inland Revenue Audit
Officer, Inland Revenue Officer, 1[Inspector Inland Revenue] and officer
of Inland Revenue with any other designation shall be subordinate to
the Additional Commissioner Inland Revenue.]
30A. Directorate General, (Intelligence and Investigation) 2[Inland
Revenue].
The Directorate General (Intelligence and Investigation) 3[Inland
Revenue] shall consist of a Director General and as many Directors,
Additional Directors, Deputy Directors and Assistant Directors and such
other officers as the Board, may by notification in the official Gazette,
appoint.
30B. Directorate General Internal Audit.-
The Directorate General Internal Audit shall consist of a Director
General and as many Directors, Additional Directors, Deputy Directors
and Assistant Directors and such other officers as the Board, may by
notification in the official Gazette, appoint.
30C. Directorate General of Training and Research.-
The Directorate General of Training and Research shall consist of a
Director General and as many Directors, Additional Directors, Deputy
Directors and Assistant Directors and such other officers as the Board,
may by notification in the official Gazette, appoint.
30D. Directorate General of Valuation.-
The Directorate General of Valuation shall consist of a Director General
and as many Directors, Additional Directors, Deputy Directors and
Assistant Directors and such other officers as the Board, may by
notification in the official Gazette, appoint.
30DD. Directorate of Post Clearance Audit.–
The Directorate of Post clearance Audit shall consist of a Director and
as many Additional Directors, Deputy Directors, Assistant Directors and
such other officers as the Board may, by notification in the official
Gazette, appoint.
1 Words inserted by Finance Act, 2011.
2 Substituted for “CBR” by Finance Act, 2011.
3 Substituted for “CBR” by Finance Act, 2011.
The Sales Tax Act, 1990
50
30E. Powers and Functions of Directorate etc.-
The Board may, by notification in the official Gazette, specify the
functions, jurisdiction and powers of the Directorates General as
specified in the preceding sections and their officers by notification in
the official Gazette.
31. Powers.--
An officer of 1[Inland Revenue] appointed under section 30 shall
exercise such powers and discharge such duties as are conferred or
imposed upon him under this Act; and he shall also be competent to
exercise all powers and discharge all duties conferred or imposed upon
any officer subordinate to him:
Provided that, notwithstanding anything contained in this Act or the
rules, the Board may, by general or special order, impose such
limitations or conditions on the exercise of such powers and discharge
of such duties as it deems fit.
32. Delegation of powers.--
2[(1) The Board or the Chief Commissioner, with the approval of the Board,
may, by an order and subject to such limitations or conditions as may
be specified therein, empower by name or designation,-
(a) any Additional Commissioner Inland Revenue or Deputy
Commissioner Inland Revenue to exercise any of the powers of
a Commissioner Inland Revenue under this Act;
(b) any Deputy Commissioner Inland Revenue or Assistant
Commissioner Inland Revenue to exercise any of the powers of
an Additional Commissioner Inland Revenue under this Act;
(c) any Assistant Commissioner Inland Revenue to exercise any of
the powers of a Deputy Commissioner Inland Revenue under
this Act;
(d) any other officer of Inland Revenue to exercise any of the
powers of an Assistant Commissioner Inland Revenue under
this Act.]
3(2) [Omitted by Finance Act, 2010]
1 Substituted for “Sales Tax” by Finance Act, 2010. Earlier same amendment was made by
Finance (Amendment) Ordinance, 201s0.
2 Sub-section (1) substituted by Finance Act, 2010.
3 Sub-section (2) omitted by Finance Act, 2010.
The Sales Tax Act, 1990
51
(3) The officer to whom any powers are delegated under this section shall
not further delegate such powers.
32A. Special Audit by Chartered Accountants or Cost Accountants–
(1) The Board 1[or the Commissioner] may, 2[ ] appoint a Chartered
Accountant as defined under Chartered Accountants Ordinance, 1961
(X of 1961) or a firm of Chartered Accountants or a Cost and
Management Accountant within the meaning of the Cost and
Management Accountants Act, 1966 (XIV of 1966) or a firm of Cost and
Management Accountants, for conducting special audit of records of
registered person:
Provided that the Board may, by notification in the official Gazette,
appoint a firm of Chartered Accountants as defined under the
Chartered Accountants Ordinance, 1961 (X of 1961), or a Cost and
Management Accountant within the meaning of the Cost and
Management Accountants Act, 1966 (XIV of 1966), or a firm of Cost
and Management Accountants to conduct audit of refund claims.
(2) Notwithstanding that records of a registered person have been audited
by an officer appointed under section 30, the Board or a
3[Commissioner] may direct an auditor appointed under sub-section (1)
to audit the records of any registered person.
(3) An auditor appointed under sub-section (1), shall have the powers of
an officer of 4[Inland Revenue] under sections 25, 37 and 38.
32AA. [Omitted by Finance Act, 2008]
1 Words inserted by Finance Act, 2010.
2 Words “by notification in the official Gazette,” omitted by Finance Act, 2010.
3 Substituted for “Collector” by Finance Act, 2010. Earlier the same amendment was made by
Finance (Amendment) Ordinance, 2010.
4 Substituted for “Sales Tax” by Finance Act, 2010. Earlier the same amendment was made by
Finance (Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
52
Chapter-VII
OFFENCES AND PENALTIES
33. Offences and penalties.—
Whoever commits any offence described in column (1) of the Table
below shall, in addition to and not in derogation of any punishment to
which he may be liable under any other law, be liable to the penalty
mentioned against that offence in column (2) thereof:—
TABLE
Offences
Penalties
Section of
the Act to
which
offence has
reference
(1) (2) (3)
1. Where any person fails to
furnish a return within the due
date.
Such person shall pay
a penalty of five
thousand rupees:
Provided that in case a
person files a return
within fifteen days of
the due date, he shall
pay a penalty of one
hundred rupees for
each day of default.
26
2. Any person who fails to issue
an invoice when required under
this Act.
Such person shall pay
a penalty of five
thousand rupees or
three per cent of the
amount of the tax
involved, whichever is
higher.
23
The Sales Tax Act, 1990
53
3. Any person who unauthorizedly
issues an invoice
in which an amount of tax is
specified.
Such person shall pay
a penalty of ten
thousand rupees or five
per cent of the amount
of the tax involved,
whichever is higher.
3, 7 and 23
4. Any person who fails to notify
the changes of material nature
in the particulars of registration
of taxable activity.
Such person shall pay
a penalty of five
thousand rupees.
14
The Sales Tax Act, 1990
54
5. Any person who fails to deposit
the amount of tax due or any
part thereof in the time or
manner laid down under this
Act or rules or orders made
thereunder.
Such person shall pay
a penalty of ten
thousand rupees or five
per cent of the amount
of the tax involved,
whichever is higher:
Provided that, if the
amount of tax or any
part thereof is paid
within fifteen days from
the due date, the
defaulter shall pay a
penalty of five hundred
rupees for each day of
default:
Provided further that no
penalty shall be
imposed when any
miscalculation is made
for the first time during
a year:
Provided further that if
the amount of tax due
is not paid even after
the expiry of a period of
sixty days of issuance
of the notice for such
payments by an officer
of 1[Inland Revenue,
not below the rank of
Assistant
Commissioner Inland
Revenue], the defaulter
shall, further be liable,
upon conviction by a
Special Judge, to
imprisonment for a
3, 6, 7 and
48
1 Substituted for “" Sales Tax not below the rank of Assistant Collector of Sales Tax” by Finance
Act, 2010.
The Sales Tax Act, 1990
55
term which may extend
to three years, or with
fine which may extend
to amount equal to the
amount of tax involved,
or with both.
6. Any person who repeats
erroneous calculation in the
return during a year whereby
amount of tax less than the
actual tax due is paid.
Such person shall pay
a penalty of five
thousand rupees or
three per cent of the
amount of the tax
involved, whichever is
higher.
7 and 26
The Sales Tax Act, 1990
56
7. Any person who is required to
apply for registration under this
Act fails to make an application
for registration before making
taxable supplies.
Such person shall pay
a penalty of ten
thousand rupees or five
per cent of the amount
of tax involved,
whichever is higher:
Provided that such
person who is required
to get himself
registered under this
Act, fails to get
registered within sixty
days of the
commencement of
taxable activity, he
shall, further be liable,
upon conviction by a
Special Judge, to
imprisonment for a
term which may extend
to three years, or with
fine which may extend
to an amount equal to
the amount of tax
involved, or with both.
14
8. Any person who fails to
maintain records required
under this Act or the rules
made thereunder.
Such person shall pay
a penalty of ten
thousand rupees or five
per cent of the amount
of tax involved,
whichever is higher.
22 and 24
The Sales Tax Act, 1990
57
9. Where a registered person
who, without any reasonable
cause, in non compliance with
the provisions of section 25,—
(a) fails to produce the record on
receipt of first notice;
(b) fails to produce the record on
receipt of second notice; and
(c) fails to produce the record on
receipt of third notice.
such person shall pay a
penalty of five
thousand rupees;
such person shall pay a
penalty of ten thousand
rupees; and
such person shall pay a
penalty of fifty
thousand rupees.
25
10. Any person who fails to furnish
the information required by the
Board through a notification
issued under sub-section (5) of
section 26.
Such person shall pay
a penalty of ten
thousand rupees.
26
The Sales Tax Act, 1990
58
11. Any person who,—
(a) submits a false or forged
document to any officer of
1[Inland Revenue]; or
(b) destroys, alters, mutilates or
falsifies the records including a
sales tax invoice; or
(c) Knowingly or fraudulently
makes false statement, false
declaration, false
representation, false
personification, gives any false
information or issues or uses a
document which is forged or
false.
Such person shall pay
a penalty of twenty five
thousand rupees or
one hundred per cent
of the amount of tax
involved, whichever is
higher. He shall, further
be liable, upon
conviction by a Special
Judge, to imprisonment
for a term which may
extend to three years,
or with fine which may
extend to an amount
equal to the amount of
tax involved, or with
both.
2(37) and
General
12. Any person who denies or
obstructs the access of an
authorized officer to the
business premises, registered
office or to any other place
where records are kept, or
otherwise refuses access to
the stocks, accounts or records
or fails to present the same
when required under section
25, 38, 38A or 40B.
Such person shall pay
a penalty of twenty five
thousand rupees or
one hundred per cent
of the amount of tax
involved, whichever is
higher. He shall, further
be liable, upon
conviction by a Special
Judge, to imprisonment
for a term which may
extend to five years, or
with fine which may
extend to an amount
equal to the amount of
tax involved, or with
both.
25, 38, 38A
and 40B
13. Any person who commits,
causes to commit or attempts
Such person shall pay
a penalty of twenty five
2(37)
1 Substituted for “Sales Tax” by Finance Act, 2010.
The Sales Tax Act, 1990
59
to commit the tax fraud, or
abets or connives in
commissioning of tax fraud.
thousand rupees or
one hundred per cent
of the amount of tax
involved, whichever is
higher. He shall, further
be liable, upon
conviction by a Special
Judge, to imprisonment
for a term which may
extend to five years, or
with fine which may
extend to an amount
equal to the loss of tax
involved, or with both.
14. Where any person violates any
embargo placed on removal of
goods in connection with
recovery of tax.
Such person shall pay
a penalty of twenty five
thousand rupees or ten
per cent of the amount
of the tax involved,
whichever is higher. He
shall, further be liable,
upon conviction by a
Special Judge, to
imprisonment for a
term which may extend
to one year, or with fine
which may extend to
amount equal to the
amount of tax involved,
or with both.
48
15. Any person who obstructs the
authorized officer in the
performance of his official
duties.
Such person shall pay
a penalty of twenty five
thousand rupees or
one hundred per cent
of the amount of tax
involved, whichever is
higher.
31 and
General
The Sales Tax Act, 1990
60
16. Any person who fails to make
payment in the manner
prescribed under section 73 of
this Act.
Such person shall pay
a penalty of five
thousand rupees or
three per cent of the
amount of tax involved,
whichever is higher.
73
17. Any person who fails to fulfil
any of the conditions,
limitations or restrictions
prescribed in a Notification
issued under any of the
provisions of this Act.
Such person shall pay
a penalty of five
thousand rupees or
three per cent of the
amount of tax involved,
whichever is higher.
71 and
General
18. Where any officer of 1[Inland
Revenue] authorized to act
under this Act, acts or omits or
attempts to act or omit in a
manner causing loss to the
sales tax revenue or otherwise
abets or connives in any such
act.
Such officer of Inland
Revenue shall be
liable, upon conviction
by a Special Judge, to
imprisonment for a
term which may extend
to three years, or with
fine which may extend
to amount equal to the
amount of tax involved,
or with both.
General
19. Any person who contravenes
any of the provision of this Act
for which no penalty has,
specifically, been provided in
this section.
Such person shall pay
a penalty of five
thousand rupees or
three per cent of the
amount of tax involved,
whichever is higher.
General
20. (***) [Omitted by Finance Act,
2008]
1 Substituted for “Sales Tax” by Finance Act, 2010.
The Sales Tax Act, 1990
61
21. Where any person repeats an
offence for which a penalty is
provided under this Act
Such person shall pay
twice the amount of
penalty provided under
the Act for the said
offence
General.
The Sales Tax Act, 1990
62
22. Any person who,-
(a) knowingly and without
lawful authority gains
access to or attempts to
gain access to the
computerized system; or
(b) unauthorizedly uses or
discloses or publishes or
otherwise disseminates
information obtained from
the computerized system;
or
(c) falsifies any record or
information stored in the
computerized system; or
(d) knowingly or dishonestly
damages or impairs the
computerized system; or
(e) knowingly or dishonestly
damages or impairs any
duplicate tape or disc or
other medium on which
any information obtained
from the computerized
system is kept or stored;
or
(f) unauthorizedly uses
unique user identifier of
any other registered user
to authenticate a
transmission of
information to the
computerized system; or
(g) fails to comply with or
contravenes any of the
conditions prescribed for
security of unique user
identifier.
Such person shall pay
a penalty of twenty-five
thousand rupees or
one hundred per cent
of the amount of tax
involved, whichever is
higher. He shall, further
be liable, upon
conviction by the
Special Judge, to
imprisonment for a
term which may extend
to one year, or with fine
which may extend to an
amount equal to the
loss of tax involved, or
with both.
50A
34. Default Surcharge.–
(1) Notwithstanding the provisions of section 11, if a registered person
The Sales Tax Act, 1990
63
does not pay the tax due or any part thereof, whether wilfully or
otherwise, in time or in the manner specified under this Act, rules or
notifications issued thereunder or claims a tax credit, refund or makes
an adjustment which is not admissible to him, or incorrectly applies the
rate of zero per cent to supplies made by him, he shall, in addition to
the tax due, pay default surcharge at the rate mentioned below:—
(a) the person liable to pay any amount of tax or charge or the
amount of refund erroneously made, shall pay default surcharge
at the rate of KIBOR plus three per cent per annum, of the
amount of tax due or the amount of refund erroneously made;
and
(b) Omitted [Omitted by Finance Act, 2008]
(c) in case, the default is on account of tax fraud, the person who
has committed tax fraud shall pay default surcharge at the rate
of two per cent per month, of the amount of tax evaded or the
amount of refund fraudulently claimed, till such time the entire
liability including the amount of default surcharge is paid.
(2) For the purpose of calculation of default surcharge,—
(a) in the case of inadmissible input tax credit or refund, the period
of default shall be reckoned from the date of adjustment of such
credit or, as the case may be, refund is received; and
(b) in the case of non-payment of tax or part thereof, the period of
default shall be reckoned from the 16th day of a month (following
the due date of the tax period to which the default relates) to the
day preceding the date on which the tax due is actually paid.
Explanation.— For the purpose of this section tax due does not
include the amount of penalty.
The Sales Tax Act, 1990
64
34A. Exemption from penalty and default surcharge.--
The Federal Government may, by a notification in the official Gazette,
or the Board by a special order published in Gazette for reasons to be
recorded in writing, exempt any person or class of persons from
payment of the whole or part of the penalty and default surcharge
imposed under sections 33 and 34 subject to such conditions and
limitations as may be specified in such notification or, as the case may
be, special order.
35. [Omitted by Finance Act, 1996]
35A. [Omitted by Finance Act, 1996]
1[ ]
37. Power to summon persons to give evidence and produce
documents in inquiries under the Act.--
(1) Any officer of 2[Inland Revenue] shall have powers to summon any
person whose attendance he considers necessary either to tender
evidence or to produce documents or any other thing in any inquiry
which such officer is making for any of the purposes of this Act.
1 Section 36 omitted by Finance Act, 2012.
36. Recovery of tax not levied or short-levied or erroneously refunded.--
(1) Where by reason of some collusion or a deliberate act any tax or charge has not been levied or
made or has been short-levied or has been erroneously refunded, the person liable to pay any
amount of tax or charge or the amount of refund erroneously made shall be served with a notice,
within five years of the relevant date, requiring him to show cause for payment of the amount
specified in the notice.
(2) Where, by reason of any inadvertence, error or misconstruction, any tax or charge has not been
levied or made or has been short-levied or has been erroneously refunded, the person liable to
pay the amount of tax or charge or the amount of refund erroneously made shall be served with a
notice within three years of the relevant date, requiring him to show cause for payment of the
amount specified in the notice:
Provided that, where a tax or charge has not been levied under this sub-section, the amount of
tax shall be recovered as tax fraction of the value of supply.
(3) The officer of 1[Inland Revenue] empowered in this behalf shall, after considering the objections
of the person served with a notice to show cause under sub-section (1) or sub-section (2),
determine the amount of tax or charge payable by him and such person shall pay the amount so
determined.
Provided that order under this section shall be made within one hundred and twenty days of
issuance of show cause notice or within such extended period as the 1[Commissioner] may, for
reasons to be recorded in writing, fix, provided that such extended period shall in no case exceed
sixty days:
Provided further that any period during which the proceedings are adjourned on account of a stay
order or Alternative Dispute Resolution proceedings or the time taken through adjournment by
the petitioner not exceeding thirty days shall be excluded from the computation of the periods
specified in the first proviso”.
(4) For the purpose of this section, the expression "relevant date" means--
(a) the time of payment of tax or charge as provided under section 6; and
(b) in a case where tax or charge has been erroneously refunded, the date of its refund.
2 Substituted for “Sales Tax” by Finance Act, 2010.
The Sales Tax Act, 1990
65
(2) Any person summoned under sub-section (1) shall be bound to attend
either in person or by an authorised agent, as the officer of 2[Inland
Revenue] may direct:
Provided that a person who is exempt from personal appearance in a
court under section 132 and 133 of the Code of Civil Procedure (Act V
of 1908), shall not be required to appear in person.
(3) Any inquiry before an officer of 2[Inland Revenue] shall be deemed to
be a judicial proceeding within the meaning of section 193 and 228 of
the Pakistan Penal Code (Act XLV of 1860).
37A. Power to arrest and prosecute.--
(1) An officer of 1[Inland Revenue, not below the rank of an Assistant
Commissioner Inland Revenue] or any other officer of equal rank
authorised by the Board in this behalf, who on the basis of material
evidence has reason to believe that any person has committed a tax
fraud or any offence warranting prosecution under this Act, may cause
arrest of such person.
(2) All arrests made under this Act shall be carried out in accordance with
the relevant provisions of the Code of Criminal Procedure, 1898 (Act V
of 1898).
(3) [Omitted by Finance Act, 2005]
(4) Notwithstanding anything contained in sub-section (1) to subsection (3)
or any other provision of this Act, where any person has committed a
tax fraud or any offence warranting prosecution under this Act, the
2[Commissioner] may, either before or after the institution of any
proceedings for recovery of tax, compound the offence if such person
pays the amount of tax due alongwith such default surcharge and
penalty as is determined under the provisions of this Act.
(5) Where the person suspected of tax fraud or any offence warranting
prosecution under this Act is a company, every director or officer of that
company whom the authorised officer has reason to believe is
personally responsible for actions of the company contributing the tax
fraud or any offence warranting prosecution under this Act shall be
liable to arrest; provided that any arrest under this sub-section shall not
absolve the company from the liabilities of payment of tax, default
surcharge and penalty imposed under this Act.
1 Substituted by Finance Act, 2010. Earlier it same amendment made by Finance (Amendment)
Ordinance, 2010.
2 Substituted for “Collector” by Finance Act, 2010. Earlier it same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
66
37B. Procedure to be followed on arrest of a person.--
(1) When a Officer of Inland Revenue authorised in this behalf arrests a
person under Section 37A, he shall immediately intimate the fact of the
arrest of that person to the Special Judge who may direct such Officer
to produce that person at such time and place and on such date as the
Special Judge considers expedient and such Officer shall act
accordingly.
(2) Notwithstanding anything contained in the sub-section (1), any person
arrested under this Act shall be produced before the Special Judge or,
if there is no Special Judge within a reasonable distance, to the nearest
Judicial Magistrate within twenty-four hours of such arrest, excluding
the time necessary for the journey from the place of arrest to the Court
of the Special Judge or, as the case may be, of such Magistrate.
(3) When any person is produced under sub-section (2) before the Special
Judge, he may, on the request of such person, after perusing the
record, if any and after giving the prosecution an opportunity of being
heard, admit him to bail on his executing a bond, with or without
sureties, or refuse to admit him to bail and direct his detention at such
place as he deems fit:
Provided that nothing herein contained shall preclude the Special
Judge from cancelling the bail of any such person at a subsequent
stage if, for any reason, he considers such cancellation necessary, but
before passing such order he shall afford such person an opportunity of
being heard, unless for reasons to be recorded he considered that the
affording of such opportunity shall defeat the purpose of this Act.
(4) When such person is produced under sub-section (2) before a Judicial
Magistrate, such Magistrate may, after authorising his detention in such
custody at such place and for such period as he considers necessary
or proper for facilitating his earliest production before the Special
Judge, direct his production before the Special Judge on a date and
time to be fixed by him or direct such person to be forthwith taken to,
and produced before, the Special Judge and he shall be so taken.
(5) Nothing in sub-section (3) or sub-section (4) shall preclude the Special
Judge or the Judicial Magistrate from remanding any such person to
the custody of the officer of Inland Revenue holding inquiry against that
person if such officer makes a request in writing to that effect, and the
Special Judge or the Judicial Magistrate, after perusing the record, if
any, and hearing such person, is of the opinion that for the completion
of inquiry or investigation it is necessary to make such order:
Provided that in no case the period of such custody shall exceed
fourteen days.
(6) When any person is arrested under this Act, the Sales Tax Officer shall
The Sales Tax Act, 1990
67
record the fact of arrest and other relevant particulars in the register
specified in sub-section (10) and shall immediately proceed to inquire
into the charge against such person and if he completes the inquiry
within twenty-four hours of his arrest, excluding the time necessary for
journey as aforesaid, he may, after producing such person before the
Special Judge or the nearest Judicial Magistrate, make a request for
his further detention in his custody.
(7) While holding an inquiry under sub-section (6), the officer of Inland
Revenue shall exercise the same powers as are exercisable by an
officer in charge of a police station under the Code of Criminal
Procedure, 1898 (Act V of 1898), but such Officer shall exercise such
powers subject to the foregoing provisions of this section while holding
an inquiry under this Act.
(8) If the Officer of Inland Revenue, after holding an inquiry as aforesaid, is
of the opinion that there is no sufficient evidence or reasonable ground
for suspicion against such person, he shall release him on his
executing a bond, with or without sureties, and shall direct such person
to appear, as and when required, before the Special Judge, and make
a report to the Special Judge for the discharge of such person and shall
make a full report of the case to his immediate superior.
(9) The Special Judge to whom a report has been made under sub-section
(8) may, after the perusal of record of the inquiry, and hearing the
prosecution, agree with such report and discharge the accused or, if he
is of the opinion that there is sufficient ground for proceedings against
such person, proceed with his trial and direct the prosecution to
produce evidence.
(10) The Sales Tax Officer empowered to hold inquiry under this section
shall maintain a register to be called "Register of Arrests and
Detentions" in the prescribed form in which he shall enter the name
and other particulars of every person arrested under this Act, together
with the time and date of arrest, the details of the information received,
the details of things, goods or documents, recovered from his custody,
the name of the witnesses and the explanation, if any, given by him
and the manner in which the inquiry has been conducted from day to
day; and such register or authenticated copies of its aforesaid entries
shall be produced before the Special Judge, whenever such Officer is
so directed by him.
(11) After completing the inquiry, the Officer of Inland Revenue shall, as
early as possible, submit to Special Judge a complaint in the same
form and manner in which the officer in charge of a police station
submits a report before a court.
(12) Any Magistrate of the first class may record any statement or
confession during inquiry under this Act, in accordance with the
provisions of Section 164 of the Code of Criminal Procedure, 1898 (Act
The Sales Tax Act, 1990
68
V of 1898).
(13) Without prejudice to the foregoing provisions to this section, the
Federal Government may, by notification in the official Gazette,
authorise any other officer working under the Board to exercise the
powers and perform the functions of a Sales Tax Officer under this
section, subject to such conditions, if any, that it may deem fit to
impose.
1[37C. Special Judges.-
(1) The Federal Government may by notification in the official Gazette,
appoint as many Special Judges as it considers necessary and, where
it appoints more than one Special Judge, it shall specify in the
notification the headquarters of each Special Judge and the territorial
limits within which he shall exercise jurisdiction under this Act.
(2) No person shall be appointed as a Special Judge unless he is or has
been a Sessions Judge.]
2[37D.Cognizance of offences by Special Judges.-
(1) Notwithstanding anything contained in this Act or any other law for the
time being in force, a Special Judge may, within the limits of his
jurisdiction, take cognizance of any offence punishable under this Act
(a) upon a report in writing made by an officer of Inland Revenue or
by any other officer especially authorized in this behalf by the
Federal Government; or
(b) upon receiving a complaint or information of facts constituting
such offence made or communicated by any person; or
(c) upon his own knowledge acquired during any proceeding before
him under this Act or under any other law for the time being in
force.
(2) Upon the receipt of report under clause (a) of sub-section (1), the
Special Judge shall proceed with the trial of the accused.
(3) Upon the receipt of a complaint or information under clause (b), or
acquired in the manner referred to in clause (c) of sub-section (1), the
Special Judge may, before issuing a summon or warrant for
appearance of the person complained against, hold a preliminary
inquiry for the purpose of ascertaining the truth or falsehood of the
complaint, or direct any Magistrate or any officer of Inland Revenue or
any police officer to hold such inquiry and submit a report, and such
1 Section 37C inserted by Finance Act, 2010.
2 Section 37D inserted by Finance Act, 2010.
The Sales Tax Act, 1990
69
Magistrate or officer shall conduct such inquiry and make report
accordingly.
(4) If, after conducting such inquiry or after considering the report of such
Magistrate or officer, the Special Judge is of the opinion that-
(a) there is no sufficient ground for proceeding, he may dismiss the
complaint, or
(b) there is sufficient ground for proceeding, he may proceed
against the person complained against in accordance with law.
(5) A Special Judge or a Magistrate or an officer holding inquiry under subsection
(3) may hold such inquiry, as early as possible, in accordance
with the provisions of section 202 of the Code of Criminal Procedure,
1898(Act V of 1898).]
1[37E. Special Judge, etc. to have exclusive jurisdiction.-
Notwithstanding anything contained in this Act or in any other law for
the time being in force-
(a) no court other than the Special Judge having jurisdiction, shall
try an offence punishable under this Act;
(b) no other court or officer, except in the manner and to the extent
specifically provided for in this Act, shall exercise any power,
or perform any function under this Act;
(c) no court, other than the High Court, shall entertain, hear or
decide any application, petition or appeal under chapters XXXI
and XXXII of the Code of Criminal Procedure, 1898 (Act V of
1898), against or in respect of any order or direction made under
this Act; and
(d) no court, other than the Special Judge or the High Court, shall
entertain any application or petition or pass any order or give
any direction under chapters XXXVII, XXXIX, XLIV or XLV of the
aforesaid Code.]
2[37F. Provisions of Code of Criminal Procedure,1898, to apply.-
(1) The provisions of the Code of Criminal Procedure, 1898(Act V of 1898),
so far as they are not inconsistent with the provisions of this Act, shall
apply to the proceedings of the court of a Special Judge and such court
shall be deemed to be a court of Sessions for the purposes of the said
1 Section 37E inserted by Finance Act, 2010.
2 Section 37F inserted by Finance Act, 2010.
The Sales Tax Act, 1990
70
Code and the provisions of Chapter XXIIA of the Code, so far as
applicable and with the necessary modifications, shall apply to the trial
of cases by the Special Judge under this Act.
(2) For the purposes of sub-section (1), the Code of Criminal Procedure,
1898(Act V of 1898), shall have effect as if an offence punishable
under this Act were one of the offences referred to in sub-section (1) of
section 337 of the Code.]
1[37G. Transfer of cases.-
(1) Where more than one Special Judge are appointed within the territorial
jurisdiction of a High Court, the High Court, and where not more than
one Special Judge is so appointed, the Federal Government, may, by
order in writing direct the transfer, at any stage of the trial, of any case
from the court of one Special Judge to the Court of another Special
Judge for disposal, whenever it appears to the High Court or, as the
case may be, the Federal Government, that such transfer will promote
the ends of justice or tend to the general convenience of the parties or
witnesses.
(2) In respect of a case transferred to a Special Judge under sub-section
(1), such Special Judge shall not by reason of the said transfer, be
bound to recall and rehear any witness whose evidence has been
recorded in the case before the transfer and may act upon the
evidence already recorded or produced before the court which tried the
case before the transfer.]
237H. Place of sittings.-
A Special Judge shall ordinarily hold sittings at his headquarters but,
keeping in view the general convenience of the parties or the
witnesses, he may hold sittings at any other place.
3[37I. Appeal to the High Court.-
(1) Any person, including the Federal Government, the Board, the
Commissioner or Director of Intelligence and Investigation or any other
officer authorized in this behalf by the Board, aggrieved by any order
passed or decision made by a Special Judge under this Act or under
the Code of Criminal Procedure,1898 (Act V of 1898), may, subject to
the provisions of Chapters XXXI and XXXII of the said Code, within
sixty days from the date of the order or decision, prefer an appeal to
the High Court.
1 Section 37G inserted by Finance Act, 2010.
2 Section 37H inserted by Finance Act, 2010.
3 Section 37 inserted by Finance Act, 2010.
The Sales Tax Act, 1990
71
(2) Except as otherwise provided in sub-section (1), the provisions of the
Limitation Act, 1908 (IX of 1908), shall apply to an appeal preferred
under sub-section (1).]
38. Authorised officers to have access to premises, stocks, accounts
and records.--
(1) Any officer authorised in this behalf by the Board 1[or the
Commissioner] shall have free access to business or manufacturing
premises, registered office or any other place where any stocks,
business records or documents required under this Act are kept or
maintained belonging to any registered person or a person liable for
registration or whose business activities are covered under this Act or
what may be required for any inquiry or investigation in any tax fraud
committed by him or his agent or any other person; and such officer
may, at any time, inspect the goods, stocks, records, data, documents,
correspondence, accounts and statements, utility bills, bank
statements, information regarding nature and sources of funds or
assets with which his business is financed, and any other records or
documents, including those which are required under any of the
Federal, Provincial or local laws maintained in any form or mode and
may take into his custody such records, statements, diskettes,
documents or any part thereof, in original or copies thereof in such form
as the authorised officer may deem fit against a signed receipt.
(2) The registered person, his agent or any other person specified in subsection
(1) shall be bound to answer any question or furnish such
information or explanation as may be asked by the authorised officer.
(3) The department of direct and indirect taxes or any other Government
department, local bodies, autonomous bodies, corporations or such
other institutions shall supply requisite information and render
necessary assistance to the authorised officer in the course of inquiry
or investigation under this section.
38A. Power to call for information.—
The 2[Commissioner] may, by notice in writing, require any person,
including a banking company, to furnish such information or such
statement in connection with any investigation or inquiry in cases of tax
fraud, as may be specified in such notice:
Provided that the 2[Commissioner] may require any regulatory authority
to provide information concerning the licenses and authorizations
issued by it.
1 Words inserted by Finance Act, 2010.
2 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
72
38B. Obligation to produce documents and provide information.—
(1) Notwithstanding anything contained in this Act or any other law for the
time being in force, any person required to maintain the record under
the Act, on demand by an officer, not below the rank of 1[an Assistant]
2[Commissioner Inland Revenue], by notice in writing, as and when
specified in the notice, shall–
(a) produce for examination, such documents or records which the
officer of 3[Inland Revenue] considers necessary or relevant to
the audit, inquiry or investigation under the Act;
(b) allow the officer of 3[Inland Revenue] to take extracts from or
make copies of such documents or records; and
(c) appear before the officer of 3[Inland Revenue] and answer any
question put to him concerning the documents and records
relating to the audit or inquiry or investigation referred to in
clause (a) above.
(2) An officer of 3[Inland Revenue] conducting an audit, inquiry or, as the
case may be, an investigation under the Act, may require in writing any
person, department, company or organization to furnish such
information as is held by that person, department, company or
organization, which, in the opinion of the officer of 3[Inland Revenue], is
relevant to such audit, inquiry or investigation.
(3) The Board may require, in writing, any person, department, company or
organization, as the case may be, to provide any information or data
held by that person, department, company or organization, which, in
the opinion of the Board, is required for purposes of formulation of
policy or administering the Customs, Sales Tax, Federal Excise or
Income Tax.
(4) Every person, department, company or organization shall furnish the
information requisitioned by the Board or the officer of 4[Inland
Revenue] under sub-section (2) or (3), within the time specified in the
notice issued by the Board or, as the case may be, the officer of
4[Inland Revenue].
1 Substituted for “a Deputy” by Finance Act, 2011.
2 Substituted for “Collector of Sales Tax” by Finance Act, 2010. Earlier same amendment made by
Finance (Amendment) Ordinance, 2010.
3 Substituted for “Sales Tax” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
4 Substituted for “Sales Tax” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
73
39. [Omitted by Finance Act, 1996]
40. Searches under warrant-
(1) Where any officer of 1[Inland Revenue] has reason to believe that any
documents or things which in his opinion, may be useful for, or relevant
to, any proceedings under this Act are kept in any place, he may after
obtaining a warrant from the magistrate, enter that place and cause a
search to be made at any time.
(2) The search made under sub-section (1) shall be carried out in
accordance with the relevant provisions of the Code of Criminal
Procedure, 1898 (V of 1898).
40A. [Omitted by Finance Act, 2006]
40B. Posting of 2[Inland Revenue] Officer.--
Subject to such conditions and restrictions, as deemed fit to impose,
the Board 3[or Chief Commissioner], may post Officer of 2[Inland
Revenue] to the premises of registered person or class of such persons
to monitor production, sale of taxable goods and the stock position:
Provided that if a 4[Commissioner], on the basis of material evidence,
has reason to believe that a registered person is involved in evasion of
sales tax or tax fraud, he may, by recording the reason in writing, post
an officer of 2[Inland Revenue] to the premises of such registered
person to monitor production or sale of taxable goods and the stocks
position.
5[Explanation.– For the removal of doubt, it is declared that the powers
of the Board, Chief Commissioner and Commissioner under this
section are independent of the provisions of section 40.]
6[40C.Monitoring or tracking by electronic or other means.-
(1) Subject to such conditions, restrictions and procedures, as it may deem
fit to impose or specify, the Board may, by notification in the official
Gazette, specify any registered person or class of registered persons
or any good or class of goods in respect of which monitoring or tracking
of production, sales, clearance, stocks or any other related activity may
1 Substituted for “sales tax” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
2 Substituted for “Sales Tax” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
3 Words inserted by Finance Act, 2013.
4 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
5 Explanation inserted by Finance Act, 2014.
6 Section 40C inserted by Finance Act, 2013.
The Sales Tax Act, 1990
74
be implemented through electronic or other means as may be
prescribed.
(2) Form such date as may be prescribed by the Board, no taxable goods
shall be removed or sold by the manufacturer or any other person
without affixing tax stamps, banderole, stickers, labels, etc. in any such
form, style and manner as may be prescribed by the Board in this
behalf.
41. [Omitted by Finance Act, 1996]
42. [Omitted by Finance Act, 1996]
The Sales Tax Act, 1990
75
Chapter-VIII
APPEALS
43. [Omitted by Finance Act, 1996]
44. [Omitted by Finance Act, 1996]
1[45. Omitted by Finance Act 2010]
45A. Power of the Board and 2[Commissioner] to call for records.--
(1) The Board may, of its own motion, call for and examine the record of
any departmental proceedings under this Act or the rules made
thereunder for the purpose of satisfying itself as to the legality or
propriety of any decision or order passed therein by an Officer of
3[Inland Revenue], it may pass such order as it may think fit:
Provided that no order imposing or enhancing any penalty or fine
requiring payment of a greater amount of 3[Inland Revenue] than the
originally levied shall be passed unless the person affected by such
order has been given an opportunity of showing cause and of being
heard.
(2) No proceeding under this section shall be initiated in a case where an
appeal under Section 45B or Section 46 is pending.
(3) No order shall be made under this Section after the expiry of five years
from the date of original decision or order of the sub-ordinate officer
referred to in sub-section (1).
(4) The 2[Commissioner] may, suo moto, call for and examine the record of
any proceeding under this Act or the rules made thereunder for the
purpose of satisfying himself as to the legality or propriety of any
decision or order passed by an officer of 3[Inland Revenue] subordinate
to him, and pass such order as he may deem fit.
45B. Appeals.—
4[(1) Any person, other than the Sales Tax Department, aggrieved by any
decision or order passed under sections 10, 11,25, 36, or 66, by an
officer of Inland Revenue may, within thirty days of the date of receipt
1 Section 45 omitted by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
2 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
3 Substituted for “Sales Tax” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
4 Sub-section (1) substituted by Finance Act, 2010.
The Sales Tax Act, 1990
76
of such decision or order, prefer appeal to the Commissioner Inland
Revenue (Appeals):
Provided that an appeal preferred after the expiry of thirty days may be
admitted by the Commissioner Inland Revenue (Appeals) if he is
satisfied that the appellant has sufficient cause for not preferring the
appeal within the specified period:
Provided further that the appeal shall be accompanied by a fee of one
thousand rupees to be paid in such manner as the Board may
prescribe.]
1[(1A) Where in a particular case, the Commissioner (Appeals) is of the
opinion that the recovery of tax levied under this Act, shall cause undue
hardship to the taxpayer, he, after affording opportunity of being heard
to the Commissioner or officer of Inland Revenue against whose order
appeal has been made, may stay the recovery of such tax for a period
not exceeding thirty days in aggregate.]
(2) The 2[Commissioner Inland Revenue] (Appeals) may, after giving both
parties to the appeal an opportunity of being heard, pass such order as
he thinks fit, confirming, varying, altering, setting aside or annulling the
decision or order appealed against:
Provided that such order shall be passed not later than one hundred
and twenty days from the date of filing of appeal or within such
extended period as the 3[Commissioner] (Appeals) may, for reasons to
be recorded in writing fix:
Provided further that such extended period shall, in no case, exceed
sixty days:
Provided further that any period during which the proceedings are
adjourned on account of a stay order or Alternative Dispute Resolution
proceedings or the time taken through adjournment by the petitioner
not exceeding thirty days shall be excluded from the computation of
aforesaid periods”.
(3) In deciding an appeal, the 4[Commissioner Inland Revenue] (Appeals)
may make such further inquiry as may be necessary provided that he
shall not remand the case for denovo consideration.
1 Sub-section (1A) inserted by Finance Act, 2013.
2 Substituted for “Collector of Sales Tax” by Finance Act, 2010. Earlier same amendment made by
Finance (Amendment) Ordinance, 2010.
3 Substituted for “Collector” by Finance Act, 2010.
4 Substituted for “Collector of Sales Tax” by Finance Act, 2010. Earlier same amendment made by
Finance (Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
77
46. Appeals to Appellate Tribunal.–
(1) Any person including an officer of 1[Inland Revenue] not below the rank
of an Additional 2[Commissioner], aggrieved by any order passed by–
(a) the 3[Commissioner Inland Revenue] (Appeals) under section
45B,
(b) the 3[Commissioner Inland Revenue] through adjudication or
under any of the provisions of this Act or rules made thereunder,
(c) the Board under section 45A, may, within sixty days of the
receipt of such decision or order, prefer appeal to the Appellate
Tribunal.
(2) The Appellate Tribunal may admit, hear and dispose of the appeal as
per procedure laid down in sections 4[131 and 132 of the Income tax
Ordinance,2001(XLIX of 2001)], and rules made thereunder.
5[(2A) All appeals and proceedings under this Act pending before the
Customs, Excise and Sales Tax Appellate Tribunal constituted under
section 194 of the Customs Act 1969 (IV of 1969) shall stand
transferred to the Appellate Tribunal constituted under section 130 of
the Income Tax Ordinance 2001 (XLIX of 2001) with effect from the
28th day of October, 2009.]
47. Reference to the High Court.—
(1) Within ninety days of the communication of the order of the Appellate
Tribunal under sub-section 6(2) of section 46, the aggrieved person or
any officer of 7[Inland Revenue] not below the rank of an Additional
8[Commissioner], authorized by the 8[Commissioner] may prefer an
application in the prescribed form along with a statement of the case to
the High Court, stating any question of law arising out of such order.
(2) The statement to the High Court referred to in sub-section (1), shall set
out the facts, the determination of the Appellate Tribunal and the
question of law, which arises out of its order.
1 Substituted for “Sales Tax” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
2 Substituted for “Collector” by Finance Act, 2010.
3 Substituted for “Collector of Sales Tax” by Finance Act, 2010. Earlier same amendment made by
Finance (Amendment) Ordinance, 2010.
4 Substituted by Finance Act, 2010. Earlier same amendment made by Finance (Amendment)
Ordinance, 2010.
5 Sub-section (2A) inserted by Finance Act, 2010.
6 Substituted for Figure “5” by Finance Act, 2010.
7 Substituted for “Sales Tax” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
8 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
78
(3) Where, on an application made under sub-section (1), the High Court is
satisfied that a question of law arises out of the order referred to in subsection
(1), may proceed to hear the case.
(4) A reference to the High Court under this section shall be heard by a
bench of not less than two judges of the High Court and, in respect of
the reference, the provisions of section 98 of the Code of Civil
Procedure, 1908 (Act V of 1908) shall apply, so far as may be,
notwithstanding anything contained in any other law for the time being
in force.
(5) The High Court upon hearing a reference under this section shall pass
the question of law raised by the reference and deliver judgment
thereon specifying the grounds on which such judgment is based and
the order of the Tribunal shall stand modified accordingly. The Court
shall send a copy of the judgment under the seal of the Court to the
Appellate Tribunal.
(6) The cost of any reference to the High Court shall be in the discretion of
the Court.
(7) Notwithstanding that a reference has been made to the High Court, the
tax shall be payable in accordance with the order of the Appellate
Tribunal:
Provided that, if the amount of tax is reduced as a result of the
judgment in the reference by the High Court, and amount of tax found
refundable by the High Court, the High Court may on application by an
Additional 1[Commissioner] authorized by the 1[Commissioner] within
thirty days of the receipt of the judgment of the High Court that he
intends to seek leave to appeal to the Supreme Court, make an order
authorizing the Collector to postpone the refund until the disposal of the
appeal by the Supreme Court.
(8) Where recovery of tax has been stayed by the High Court by an order,
such order shall cease to have effect on the expiration of a period of six
months following the day on which it is made unless the reference is
decided, or such order is withdrawn, by the High Court earlier.
(9) Section 5 of the Limitation Act, 1908 (IX of 1908), shall apply to an
application made to the High Court under sub-section (I).
1 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
79
(10) An application under sub-section (1) by a person other than the
Additional 1[Commissioner] authorized by the 1[Commissioner] shall be
accompanied by a fee of one hundred rupees.
(11) Notwithstanding anything contained in any provision of this Act, where
any reference or appeal was filed with the approval of 2[Commissioner]
by the officer of lower rank than the 3[Commissioner], and the reference
or appeal is pending before an appellate forum or the Court, such
reference or appeal shall always be deemed to have been so filed by
the Commissioner.
47A. Alternative dispute resolution.—
(1) Notwithstanding any other provisions of this Act, or the rules made
thereunder, any registered person aggrieved in connection with any
dispute pertaining to:–
(a) the liability of tax against the registered person, or admissibility
of refunds, as the case may be;
(b) the extent of waiver of default surcharge and penalty;
(c) the quantum of input tax admissible in terms of sub-section (3)
of section 7;
(d) relaxation of any procedural or technical irregularities and
condonation of any prescribed time limitation; and
(e) any other specific relief required to resolve the dispute,
may apply to the Board for the appointment of a committee for the
resolution of any hardship or dispute mentioned in detail in the
application, which is under litigation in any Court of Law or an Appellate
authority, except in the cases where first information reports (FIRs)
have been lodged under the Act or criminal proceedings initiated or
where interpretation of question of law having larger revenue impact in
the opinion of the Federal Board of Revenue is involved, may apply to
the Federal Board of Revenue for the appointment of a committee for
the resolution of dispute in appeal and only such application may be
entertained for dispute resolution under the provisions of this section.
(2) The Board may, after examination of the application of a registered
person, appoint a committee within thirty days of receipt of such
1 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
2 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
3 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
80
application in the Board, consisting of an officer of 1[Inland Revenue
not below the rank of Additional Commissioner] and two persons from
the notified panel consisting of retired Judges not below District and
Sessions Judge, chartered or cost accountants, advocates,
representatives of trade bodies or associations, or any other reputable
taxpayers, for the resolution of dispute.
(3) The committee constituted under sub-section (2) shall examine the
issue and may if it deems fit, conduct inquiry, seek expert opinion,
direct any officer of the 2[Inland Revenue] or any other person to
conduct an audit and shall make recommendations within ninety days
of its constitution in respect of the dispute. If the committee fails to
make recommendations with the said period the Board shall dissolve
the committee and constitute a new committee which shall decide the
matter within a further period of ninety days. If after the expiry of that
period the dispute is not resolved the matter shall be taken up by the
appropriate forum for decision.
(4) The Board may, on the recommendation of the committee, pass such
order, as it may deem appropriate within forty-five days of the receipt of
the recommendations of the Committee.
3[(4A) Notwithstanding anything contained in sub-section (4), the Chairman
FBR and a Member nominated by him may, on the application of an
aggrieved person, for reasons to be recorded in writing, and on being
satisfied that there is an error in order or decision, pass such order as
may be deemed just and equitable.]
(5) The registered person may make payment of sales tax and other duty
and taxes as determined by the Board in its order under sub-section (4)
or under sub-section (4A), and such order of the Board shall be
submitted before the forum, tribunal or the Court where the matter is
subjudice for consideration of orders as deemed appropriate.
(6) The Board may, by notification in the official Gazette, make rules for
carrying out the purposes of this section.
1 Substituted by Finance Act, 2010. Earlier same amendment made by Finance (Amendment)
Ordinance, 2010.
2 Substituted for “Sales Tax” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
3 Sub-section (4A) substituted by Finance Act, 2011.
The Sales Tax Act, 1990
81
Chapter-IX
RECOVERY OF ARREARS
48. Recovery of arrears of tax.-
(1) subject to sub-section (1A), where any amount of tax is due from any
person, the officer of 1[Inland Revenue] may:-
(a) deduct the amount from any money owing to person from whom
such amount is recoverable and which may be at the disposal or
in the control of such officer or any officer of Income Tax,
Customs or Central Excise Department;
(b) require by a notice in writing any person who holds or may
subsequently hold any money for or on account of the person
from whom tax may be recoverable to pay to such officer the
amount specified in the notice;
(c) stop removal of any goods from the business premises of such
person till such time the amount of tax is paid or recovered in
full;
(ca) require by a notice in writing any person to stop clearance of
imported goods or manufactured goods or attach bank accounts;
(d) seal the business premises till such time the amount of tax is
paid or recovered in full;
(e) attach and sell or sell without attachment any movable or
immovable property of the registered person from whom tax is
due; and
(f) recover such amount by attachment and sale of any moveable
or- immovable property of the guarantor, person, company, bank
or financial institution where a guarantor or any other person,
company, bank or financial institution fails to make payment
under such guarantee, bond or instrument.
(1A) If any arrears of tax, default surcharge, penalty or any other amount
which is adjudged or payable by any person and which cannot be
recovered in the manner prescribed above, the Board or any officer
authorized by the Board, may, write off the arrears in the manner as
may be prescribed by the Board.
1 Substituted for “Sales Tax” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
82
(2) For the purpose of recovery of tax, penalty or any other demand raised
under this Act, the officer of 1[Inland Revenue] shall have the same
powers which under the Code of Civil Procedure 1908 (V of 1908), a
Civil Court has for the purpose of recovery of an amount due under a
decree.
1 Substituted for “Sales Tax” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
83
Chapter-X
MISCELLANEOUS
49. Sales of taxable activity or transfer of ownership.--
(1) In case of termination of taxable activity or part thereof or its sale or
transfer of ownership to a non-registered person, the possession of
taxable goods or part thereof by the registered person shall be deemed
to be a taxable supply and the registered person shall be required to
account for and pay the tax on the taxable goods held by him:
Provided that if the tax payable by such registered person remains
unpaid, the amount of unpaid tax shall be the first charge on the assets
of the business and shall be payable by the transferee of business
(2) In the case of sale or transfer of ownership of a taxable activity or part
thereof to another registered person as an ongoing concern, sales tax
chargeable on taxable goods or part thereof shall be accounted for and
paid by the registered person to whom such sale is made or ownership
is transferred.
49A. Liquidators.-
(1) Every person (hereinafter referred to as a “liquidator”) who is-
(a) a liquidator of a company;
(b) a receiver appointed by a Court or appointed out of Court;
(c) a trustee for a bankrupt; or
(d) a mortgagee in possession,
shall, within fourteen days of being appointed or taking possession of
an asset in Pakistan, whichever occurs first, give written notice thereof
to the 1[Commissioner].
(2) The 1[Commissioner] shall, within three months of being notified under
sub-section (1), notify the liquidator, in writing, of the amount which
appears to the 1[Commissioner] to be sufficient to provide for any sales
tax which is or will become payable by the person whose assets are in
the possession of the liquidator.
1 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
84
(3) A liquidator shall not, without leave of the 1[Commissioner], part with
any asset held as liquidator until the liquidator has been notified under
sub-section (2).
(4) A liquidator-
(a) shall set aside, out of the proceeds of sale of any asset by the
liquidator, the amount notified by the 1[Commissioner] under
sub-section (2), or such amount as is subsequently agreed to by
the 1[Commissioner]; and
(b) shall be liable to the extent of the amount set aside for the Inland
Revenue liability of the person who owned the asset.
(5) A liquidator shall be personally liable to the extent of any amount
required to be set-aside under sub-section (4) for the tax referred to in
sub-section (2) if, and to the extent that, the liquidator fails to comply
with the requirements of this section.
(6) Where the proceeds of sale of any asset are less than the amount
notified by the 1[Commissioner] under sub-section (2), the application
of sub-section (4) and (5) shall be limited to the proceeds of sale.
(7) This section shall have effect notwithstanding anything contained in
any other law for the time being in force.
50. Power to make rules.--
(1) The Board may, by notification in the official Gazette, make rules for
carrying out the purposes of this Act including rules for charging fee for
processing of returns, claims and other documents and for preparation
of copies thereof.
(2) All rules made under sub-section (1) or any other provisions of this Act,
shall be collected, arranged and published along with general orders
and departmental instructions and rulings, if any, at appropriate
intervals and sold to the public at reasonable price
50A. Computerized system.—
(1) The Board may prescribe the use of computerized system for carrying
out the purposes of this Act, including the receipt of applications for
registration, returns and such other declarations or information required
to be provided under this Act and the rules made thereunder, from such
date and for such registered persons or class of persons as the Board
may, by notification in the official Gazette, specify.
1 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
85
(2) The Board may make rules for regulating the conduct and transaction
of business in relation to the submission of returns or other information
to the Board by the persons required to transmit or receive any
information through the computerized system, including matters such
as grant of authorization, suspension and cancellation of authorization
and for security of the information transmitted or received through the
computerized system.
(3) Unless otherwise proved, the information received in the computerized
system from or on behalf of any registered person shall, for all official
and legal purposes, be deemed to have been furnished by and
received from such registered person.
(4) The business information gathered through computerized system shall
be confidential to be used only for official and legal purposes and no
unauthorized person shall claim for any access to such information.
1[50B. Electronic scrutiny and intimation.–
(1) The Board may implement a computerized system for the purpose of
automated scrutiny, analysis and cross-matching of returns and other
available data relating to registered persons and to electronically send
intimations to such registered persons about any issue detected by the
system.
(2) The intimation sent by the computerized system under sub-section (1)
shall be in the nature of an advice or advance notice, aimed at allowing
the registered person to clarify the issue, rectify any mistake or take
other corrective action before any legal or penal action is initiated.
(3) The computerized system shall be so implemented so as to keep
record of the issues detected, intimations sent, responses received and
actions taken, and to present such information to the officer of Inland
Revenue and to the Board in the prescribed manner.
(4) The Board may prescribe procedures and specifications for the smooth
and efficient operation of the computerized system.]
51. Bar of suits, prosecution and other legal proceedings.--
(1) No suit shall he brought in any Civil Court to set aside or modify any
order passed, any assessment made, any tax levied, any penalty
imposed or collection of any tax made under this Act.
(2) No suit, prosecution or other legal proceeding shall lie against the
Federal Government or against any public servant in respect of any
order passed in good faith under this Act.
1 Section 50B inserted by Finance Act, 2014.
The Sales Tax Act, 1990
86
(3) Notwithstanding anything in any other law for the time being in force,
no investigation or inquiry shall be undertaken or initiated by any
governmental agency against any officer or official for anything done in
his official capacity under this Act, rules, instructions or direction made
or issued thereunder without the prior approval of the Board.
52. Appearance by authorised representative.--
A registered person required to appear before the Appellate Tribunal or
an officer of 1[Inland Revenue] in connection with any proceedings
under this Act may, in writing, authorise any person having such
qualification as may be prescribed to represent him or appear on his
behalf.
52A. e-intermediaries to be appointed.—
(1) Subject to such conditions, limitations and restrictions, the Board may,
by a notification in the official Gazette, appoint a person to
electronically file return under Chapter V and such other documents
electronically, as may be prescribed from time to time, on behalf of a
person registered under section 14.
(2) A person registered under section 14 may authorize an e-intermediary
to electronically file return or any other documents, as specified in subsection
(1).
(3) The return or such other documents filed by an e-intermediary on
behalf of a registered person shall be deemed to have been filed by
that registered person.
(4) Where this Act requires anything to be done by the registered person
and if such thing is done by an e-intermediary authorized by the
registered person under sub-section (2), unless the contrary is proved,
shall be deemed to have been done with the knowledge and consent of
such registered person so that in any proceedings under this Act, the
registered person shall be liable as if the thing has been done by him.
(5) Where an e-intermediary, authorized by a registered person under subsection
(2) to act on his behalf, knowingly or wilfully submits a false or
incorrect information or document or declaration with an intent to avoid
payment of tax due or any part thereof or claiming a tax credit or a
refund that is not due to the registered person, such e-intermediary
shall be jointly and severally responsible for recovery of the amount of
tax short paid or the amount refunded in excess as a result of such
incorrect or false information or document or declaration, without
1 Substituted for “Sales Tax” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
87
prejudice to any other action that may be taken against him under the
relevant provisions of the law.
(6) The Board may, by notification in the official Gazette, prescribe rules
for the conduct and transaction of business of e- intermediaries,
including their appointment, suspension and cancellation of
appointment, subject to such conditions as specified therein.
53. Estate of deceased person.--
The tax liability of a deceased registered person under the Act shall be
the first charge on his estate in the hands of his successors.
54. Estate in bankruptcy.--
(1) If a registered person is declared bankrupt, the tax liability under this
Act shall pass on to the estate in bankruptcy if it continues to operate
the business.
(2) If tax liability is incurred by an estate in bankruptcy, the tax is deemed
to be a current expenditure in the operations of the estate in bankruptcy
and shall be paid before the claims preferred by other creditors are
settled.
55. Removal of difficulties.--
If any difficulty arises in giving effect to the provisions of this Act or the
rules made or notifications issued thereunder, the Board may through a
general order or otherwise, issue instructions or directions, not
inconsistent with the provisions of this Act, for such actions to be taken
by an officer of 1[Inland Revenue] or any other person as it considers
necessary or expedient for the purpose of removing the difficulty.
2[56. Service of order, decisions, etc.--
(1) Subject to this Act, any notice, order or requisition required to be
served on a resident individual, other than in a representative capacity,
for the purposes of this Act shall be treated as properly served on the
individual if -
(a) personally served on the individual or, in the case of an
individual under a legal disability or a non-resident individual, the
representative of the individual;
1 Substituted for “Sales Tax” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
2 Substituted Section 56 by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
88
(b) sent by registered post or courier service to the place specified
in clause (b) of sub-section (2) or to the individual‘s usual or last
known address in Pakistan; or
(c) served on the individual in the manner prescribed for service of
a summons under the Code of Civil Procedure, 1908 (V of1908).
(2) Subject to this Act, any notice, order or requisition required to be
served on any person, other than a resident individual to whom subsection
(1) applies, for the purposes of this Act, shall be treated as
properly served on the person if -
(a) personally served on the representative of the person;
(b) sent by registered post or courier service to the person‘s
registered office or address for service of notices under this Act,
in Pakistan, or where the person does not have such office or
address, the notice is sent by registered post to any office or
place of business of the person in Pakistan; or
(c) served on the person in the manner prescribed for service of a
summons under the Code of Civil Procedure, 1908 (V of 1908).
(3) Where an association of persons is dissolved, any notice, order or
requisition required to be served under this Act, on the association may
be served on any person who was the principal officer or a member of
the association immediately before such dissolution.
(4) Where, business stands discontinued, any notice, order or requisition
required to be served under this Act, on the person discontinuing the
business may be served on the person personally or on any individual
who was the person‘s representative at the time of discontinuance.
(5) The validity of service of a notice under this Act shall not be called into
question after the notice has been complied with in any manner.]
1[57. Rectification of mistake.-
(1) The Officer of Inland revenue, Commissioner, the Commissioner
(Appeals) or the Appellate Tribunal may, by an order in writing, amend
any order passed by him to rectify any mistake apparent from the
1 Substituted section 57 by Finance Act, 2013. Earlier it was:
57. Correction of clerical errors, etc.--
Clerical or arithmetical errors in any assessment, adjudication, order or decision may,
at any time, be corrected by the officer of Inland Revenue who made the assessment
or adjudication or passed such order or decision or by his successor in office:
Provided that before such correction, a notice shall be given to the registered person or
to a person affected by such correction.
The Sales Tax Act, 1990
89
record on his or its own motion or any mistake brought to his or its
notice by a taxpayer or, in the case of the Commissioner (Appeals) or
the Appellate Tribunal, the Commissioner.
(2) No order under sub-section (1) which has the effect of increasing an
assessment, reducing a refund or otherwise applying adversely to the
taxpayer shall be made unless the taxpayer has been given a
reasonable opportunity of being heard.
(3) Where a mistake apparent on the record is brought to the notice of the
officer of Inland Revenue, Commissioner or Commissioner (Appeals),
as the case may be, and no order has been made next following the
date on which the mistake was brought to their notice, the mistake shall
be treated as rectified and all the provisions of this Act shall have effect
accordingly.
(4) No order under sub-section (1) shall be made after five years from the
date of the order sought to be rectified.]
58. Liability for payment of tax in the case of private companies or
business enterprises.--
Notwithstanding anything contained in the Companies ordinance 1984
(XLVII of 1984), where any private company or business enterprise is
wound up and any tax chargeable on the company or business
enterprise, whether before, or in the course, or after its liquidation, in
respect of any tax period cannot be recovered from the company or
business enterprise, every person who was a owner of, or partner in, or
director of the company or business enterprise during the relevant
period shall, Jointly and severally with such persons be liable for the
payment of such tax.
58A. Representatives.—
(1) For the purpose of this Act and subject to sub-sections (2) and (3), the
expression “representative” in respect of a registered person, means—
(a) where the person is an individual under a legal disability, the
guardian or manager who receives or is entitled to receive
income on behalf, or for the benefit of the individual;
(b) where the person is a company (other than a trust, a Provincial
Government, or local authority in Pakistan), a director or a
manager or secretary or agent or accountant or any similar
officer of the company;
(c) where the person is a trust declared by a duly executed
instrument in writing whether testamentary or otherwise, any
trustee of the trust;
The Sales Tax Act, 1990
90
(d) where the person is a Provincial Government, or local authority
in Pakistan, any individual responsible for accounting for the
receipt and payment of money or funds on behalf of the
Provincial Government or local authority;
(e) where the person is an association of persons, a director or a
manager or secretary or agent or accountant or any similar
officer of the association or in the case of a firm, any partner in
the firm;
(f) where the person is the Federal Government, any individual
responsible for accounting for the receipt and payment of
moneys or funds on behalf of the Federal Government; or
(g) where the person is a public international organization, or a
foreign government or political sub-division of a foreign
government, any individual responsible for accounting for the
receipt and payment of moneys or funds in Pakistan on behalf of
the organization, government, or political subdivision of the
government.
(2) Where the Court of Wards, the Administrator General, the Official
Trustee, or any receiver or manager appointed by, or under, any order
of a Court receives or is entitled to receive income on behalf, or for the
benefit of any person, such Court of Wards, Administrator General,
Official Trustee, receiver, or manager shall be the representative of the
person for the purposes of this Act.
(3) Subject to sub-section (4), where a person is a non-resident person,
the representative of the persons for the purpose of this Act for a tax
year shall be any person in Pakistan—
(a) who is employed by, or on behalf of, the non-resident person;
(b) who has any business connection with the non-resident person;
(c) from or through whom the non-resident person is in receipt of
any income, whether directly or indirectly;
(d) who holds, or controls the receipt or disposal of any money
belonging to the non-resident person;
(e) who is the trustee of the non-resident person; or
The Sales Tax Act, 1990
91
(f) who is declared by the 1[Commissioner] by an order in writing to
be the representative of the non-resident person.
(4) No person shall be declared as the representative of a non-resident
person unless the person has been given an opportunity by the
1[Commissioner] of being heard.
58B. Liability and obligations of representatives.—
(1) Every representative of a person shall be responsible for performing
any duties or obligations imposed by or under this Act on the person,
including the payment of tax.
(2) Subject to section 58 and sub-section (5) of this section, any tax that,
by virtue of sub-section (1), is payable by a representative of a
registered person shall be recoverable from the representative only to
the extent of any assets of the registered person that are in the
possession or under the control of the representative.
(3) Every representative of a registered person who pays any tax owing by
the registered person shall be entitled to recover the amount so paid
from the registered person or to retain the amount so paid out of any
moneys of the registered person that are in the representative’s
possession or under the representative’s control.
(4) Any representative, or any person who apprehends that he may be
assessed as a representative, may retain out of any money payable by
him to the person on whose behalf he is liable to pay tax (hereinafter in
this section referred to as the “principal”), a sum equal to his estimated
liability under this Act, and in the event of disagreement between the
principal and such a representative or a person as to the amount to be
so retained, such representative or person may obtain from the
2[Commissioner] a certificate stating the amount to be so retained
pending final determination of the tax liability, and the certificate so
obtained shall be his authority for retaining that amount.
(5) Every representative shall be personally liable for the payment of any
tax due by the representative in a representative capacity if, while the
amount remains unpaid, the representative—
(a) alienates, charges or disposes of any moneys received or
accrued in respect of which the tax is payable; or
1 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
2 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
92
(b) disposes of or parts with any moneys or funds belonging to the
registered person that is in the possession of the representative
or which comes to the representative after the tax is payable, if
such tax could legally have been paid from or out of such
moneys or funds.
(6) Nothing in this section shall relieve any person from performing any
duties imposed by or under this Act on the person which the
representative of the person has failed to perform.
59. Tax paid on stocks acquired before registration.--
The tax paid on goods purchased by a person who is subsequently
required to be registered under section 14 due to new liabilities or
levies or gets voluntary registration under this Act or the rules made
thereunder, shall be treated as input tax, provided that such goods
were purchased by him from a registered person against an invoice
issued under section 23 during a period of thirty days before making an
application for registration and constitute his verifiable unsold stock on
the date of compulsory registration or on the date of application for
registration or for voluntary registration:
Provided that where a person imports goods, the tax paid by him
thereon during a period of ninety days before making an application for
registration shall be treated as an input tax subject to the condition that
he holds the bill of entry relating to such goods and also that these are
verifiable unsold or un-consumed stocks on the date of compulsory
registration or on the date of application for registration or for voluntary
registration.
60. Powers to deliver certain goods without payment of tax.--
Subject to such conditions, limitations or restrictions as it thinks fit to
impose, Federal Government may authorise the import of goods or
class of goods, without payment of the whole or any part of the tax
payable thereon to the following persons, namely:-
(i) registered importers importing such goods temporarily with a view
to subsequent exportation;
(ii) registered manufacturer-cum-exporters who import raw materials
and intermediary products for further manufacture of goods meant
for export;
61. Repayment of tax in certain cases.--
Subject to such conditions, limitations or restrictions as it thinks fit to
impose, the Board may authorise the repayment in whole or in part of
the tax paid on any goods of such class or description as it may
determine, which have been used in the production, manufacture,
The Sales Tax Act, 1990
93
processing, repair or refitting in Pakistan of goods of such class or
description as it may determine.
61A. Repayment of tax to persons registered in Azad Jammu and
Kashmir.—
Subject to such conditions, limitations or restrictions as it may deem fit
to impose, the Board may authorize the repayment in whole or in part
of the input tax paid on any goods acquired in or imported into Pakistan
by the persons registered in Azad Jammu and Kashmir as are engaged
in making of zero-rated supplies.
62. Drawback allowable on re-export.--
When any goods which have been imported into Pakistan and on which
tax has been paid on importation are re-exported outside Pakistan and
such goods are capable of being identified, seven-eighth of such tax
shall, except as otherwise hereinafter provided, be repaid as drawback,
and the provisions of Customs Act, 1969 (IV of 1969), relating to
drawback of customs duties shall, so far as may be apply to such tax,
as they apply for the purposes of that Act:
Provided that no such drawback shall be repaid unless the re-export is
made within a period of two years from the date of importation as
shown in the records of the Custom House:
Provided further that the Board may, on sufficient cause being shown,
in any case extend the said period by a further period of one year.
63. Drawback on goods taken into use between importation and reexportation.--
Notwithstanding anything contained in section 62, the repayment of
sales tax as drawback in respect of goods which have been taken into
use between importation and re-exportation shall be subject to such
orders, conditions or limitations as may be passed or imposed by the
Board in each case-
(a) modifying the amount of tax which shall be repaid as drawback
on any such goods or class of goods; or
(b) prohibiting the repayment of tax as drawback on any such goods
or class of such goods; or
(c) varying the condition for the grant of drawback on any such
goods or class of such goods by restricting the period after
importation within which the goods must be re-exported.
64. Power to declare what goods are identifiable and to prohibit
The Sales Tax Act, 1990
94
drawback in case of specified foreign territory.--
The Federal Government may, from time to time, by notification in the
official Gazette, prohibit the payment of drawback upon the exportation
of goods or any specified goods or class of goods to any specified
foreign port or territory.
65. Exemption of tax not levied or short levied as a result of general
practice.--
Notwithstanding anything contained in this Act, if in respect of any
supply the Federal Government is satisfied that inadvertently and as a
general practice:-
(a) tax has not been charged in any area on any supply which was
otherwise taxable, or according to the said practice the amount
charged was less than the amount that should have actually
been charged;
(b) the registered person did not recover any tax prior to the date it
was discovered that the supply was liable to tax; and
(c) the registered person started paying the tax from the date when
it was found that the supply was chargeable to tax;
It may, by a notification in the official Gazette, direct that the tax not
levied or short levied as a result of that inadvertent practice, shall not
be required to be paid for the period prior to the discovery of such
inadvertent practice.
66. Refund to be claimed within one year.--
No refund of tax claimed to have been paid or over paid through
inadvertence, error or misconstruction or refund on account of input
adjustment not claimed within the relevant tax period, shall be allowed,
unless the claim is made within one year of the date of payment:
Provided that in a case where a registered person did not deduct input
tax within the relevant tax period, the 1[Commissioner] may, after
satisfying himself that input tax adjustment is due and admissible, allow
the registered person to take such adjustment in the tax period as
specified by the 1[Commissioner]:
Provided further that in a case where the refund has become due on
account of any decision or judgement of any officer of Inland Revenue
1 Substituted for “Collector” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
95
or court or the Tribunal, the period of one year shall be reckoned from
the date of judgement or decision of such officer, court or Tribunal:
Provided further that the application or claim filed under this section
shall be disposed of within a period not exceeding ninety days from the
date of filing of such application or claim1[:
Provided also that no refund shall be admissible under this section if
incidence of tax has been passed directly or indirectly to the
consumer.]
67. Delayed Refund.--
Where a refund due under section 10 is not made within the time
specified in this behalf, there shall be paid to the claimant in addition to
the amount of refund due to him, a further sum equal to KIBOR per
annum of the amount of refund due, from the date following the expiry
of the time specified as aforesaid, to the day preceding the day of
payment of refund:
Provided that where there is reason to believe that a person has
claimed the refund which is not admissible to him, the provision
regarding the payment of such additional amount shall not apply till the
investigation of the claim is completed and the claim is either accepted
or rejected.
68. Liability of the registered person for the acts of his agent.--
When any person is expressly or impliedly authorised by a registered
person to be his agent for all or any of the purposes of this Act, the
registered person shall be responsible for the act done by his agent.
69. Issuance of duplicate of sales tax documents.—
An officer of 2[Inland Revenue not below the rank of Assistant
Commissioner] may, on payment of one hundred rupees, issue an
attested duplicate of any sales tax document as is available with the
department or has been filed under this Act or rules made thereunder
to a relevant registered person applying for the same.
70. Computation of limitation period.--
In computing the period of limitation prescribed for any appeal or
application under this Act, the day on which the order complained of
was served and, if the concerned person was not furnished with a copy
1 Proviso inserted by Finance Act, 2011
2 Substituted for “Sales Tax not below the rank of Assistant Collector” by Finance Act, 2010.
Earlier same amendment made by Finance (Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
96
of the order, the time requisite for obtaining a copy of such order shall
be excluded.
71. Special procedure.—
(1) Notwithstanding anything contained in this Act, the Federal
Government may, by notification in the official Gazette, prescribe
special procedure for scope and payment of tax, registration, book
keeping and invoicing requirements and returns, etc; in respect of such
supplies as may be specified therein.
(2) [Omitted by Sales Tax (Amendment) Ordinance, 1999]
(3) Notwithstanding anything contained in this Act or any other law for the
time being in force or any decision of any court the trade enrolment
Certificate schemes immediately in force before the commencement of
the Finance Act, 1999, shall be deemed to be validly made under this
Act.
72. Officers of 1[Inland Revenue] to follow Board's orders, etc.--
All officers of 1[Inland Revenue] and other persons employed in the
execution of this Act shall observe and follow the orders, instructions
and directions of the Board:
Provided that no such orders, instructions or directions shall be given
so as to interfere with the discretion of officers of 1[Inland Revenue] in
the exercise of their quasi-judicial functions.
2[72A. Reference to the authorities.—
Any reference to Collector, Additional Collector, Deputy Collector,
Assistant Collector, Superintendent, Senior Auditor and an Officer of
Sales Tax, wherever occurring, in this Act and the rules, notifications,
clarifications, general orders or orders made or issued thereunder, shall
be construed as reference to Commissioner Inland Revenue, Additional
Commissioner Inland Revenue, Deputy Commissioner Inland Revenue,
Assistant Commissioner Inland Revenue, Superintendent Inland
Revenue, Inland Revenue Audit Officer and an officer of Inland
Revenue, respectively.]
1 Substituted for “Sales Tax” by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
2 Section 72A inserted by Finance Act, 2010. Earlier same amendment made by Finance
(Amendment) Ordinance, 2010.
The Sales Tax Act, 1990
97
1[72B. Selection for audit by the Board.-
(1) The Board may select persons or classes of persons for audit of tax
affairs through computer ballot which may be random or parametric as
the Board may deem fit.
(2) Audit of tax affairs of persons selected under sub-section (1) shall be
conducted as per procedure given in section 25 and all the provisions of
this Act shall apply accordingly.
(3) For the removal of doubt, it is hereby declared that the Board shall be
deemed always to have had, the power to select any persons or classes
of persons for audit of tax affairs under this section.]
2[72C.Reward to Inland Revenue officers and officials.-
(1) In cases involving concealment or evasion of sales tax and other taxes,
cash reward shall be sanctioned to the officers and officials of Inland
Revenue for their meritorious conduct in such cases and to the
informer providing credible information leading to such detection, as
may be prescribed by the Board, only after realization of part or whole
of the taxes involved in such cases.
(2) The Board may, by notification in the official Gazette, prescribe the
procedure in this behalf and specify the apportionment of reward
sanctioned under this section for individual performance or to collective
welfare of the officers and officials of Inland Revenue.]
73. Certain transactions not admissible.—
(1) Notwithstanding anything contained in this Act or any other law for the
time being in force, payment of the amount for a transaction exceeding
value of fifty thousand rupees, excluding payment against a utility bill,
shall be made by a crossed cheque drawn on a bank or by crossed
bank draft or crossed pay order or any other crossed banking
instrument showing transfer of the amount of the sales tax invoice in
favour of the supplier from the business bank account of the buyer:
Provided that online transfer of payment from the business account of
buyer to the business account of supplier as well as payments through
credit card shall be treated as transactions through the banking
channel, subject to the condition that such transactions are verifiable
from the bank statements of the respective buyer and the supplier.
(2) The buyer shall not be entitled to claim input tax credit, adjustment or
deduction, or refund, repayment or draw-back or zero-rating of tax
under this Act if payment for the amount is made otherwise than in the
1 Section 72B inserted by Finance Act, 2010.
2 Section 72C inserted by Finance Act, 2013.
The Sales Tax Act, 1990
98
manner prescribed in sub-section (1), provided that payment in case of
a transaction on credit is so transferred within one hundred and eighty
days of issuance of the tax invoice.
(3) The amount transferred in terms of this section shall be deposited in
the business bank account of the supplier, otherwise the supplier shall
not be entitled to claim input tax credit, adjustment or deduction, or
refund, repayment or draw-back or zero-rating of tax under this Act.
Explanation— For the purpose of this section, the term “business bank
account” shall mean a bank account utilized by the registered person
for business transactions, declared to the 1[Commissioner] in whose
jurisdiction he is registered 2[through Form STR 1 or change of
particulars in registration database].
74. Condonation of time-limit.—
Where any time or period has been specified under any of the
provisions of the Act or rules made thereunder within which any
application is to be made or any act or thing is to be done, the Board
may, in any case or class of cases, permit such application to be made
or such act or thing to be done within such time or period as it may
consider appropriate:
Provided that the Board may, by notification in the official Gazette, and
subject to such limitations or conditions as may be specified therein,
empower any 3[Commissioner] to exercise the powers under this
section in any case or class of cases.
4[Explanation. – For the purpose of this section, the expression “any act
or thing is to be done” includes any act or thing to be done by the
registered person or by the authorities specified in section 30 of this
Act.]
75. Application of the provisions of Act IV of 1969 to Sales Tax.—
The Federal Government may, by notification in the official Gazette,
declare that any of the provision of the Customs Act, 1969 (IV of 1969),
relating to the levy of, and exemption from, customs duties, draw-back
of duty, warehousing, confiscation, and procedure relating to offences
and appeals shall, with such modifications and alterations as it may
consider necessary or desirable to adapt them to the circumstances, be
applicable in regard to like matters in respect of the tax imposed by
section 3.
1 Substituted for “Collector” by Finance Act, 2010.
2 Words etc inserted by Finance Act, 2013.
3 Substituted for “Collector” by Finance Act, 2010.
4 Explanation inserted by Finance Act, 2011.
The Sales Tax Act, 1990
99
The Sales Tax Act, 1990
100
SCHEDULES
THE FIRST SCHEDULE
The First Schedule omitted vide Finance Supplementary (Amendment) Act,
1997, with effect from March 28, 1997.
The Sales Tax Act, 1990
101
THE SECOND SCHEDULE
The Second Schedule omitted vide Finance Supplementary (Amendment)
Act, 1997, with effect from March 28, 1997.
The Sales Tax Act, 1990
102
THE THIRD SCHEDULE
See clause (a) of sub-section (2) of section 3
Serial
No.
Description Heading Nos. of the First Schedule
to the Customs Act, 1969 (IV of
1969)
(1) (2) (3)
1 Fruit juices and vegetable
juices.
20.09
2 Ice Cream. 21.05
3 Aerated waters or beverages. 22.01 and 22.02
4 Syrups and squashes. Respective headings
5 Cigarettes. 2402.2000
6 Toilet soap. 3401.1100; and 3401.2000
7 Detergents. 3402.2000
8 Shampoo. 3305.1000
9 Toothpaste. 3306.1010
10 Shaving cream. 3307.1000
11 Perfumery and cosmetics. Respective sub-headings of 33.03
and 33.04.
12 Omitted [Omitted by Finance Act,
2008]
13 Omitted [Omitted by Finance Act,
2008]
14 Tea. Respective sub-headings of 09.02
15 Powder drinks. 21.06
16 Milky drinks. 2106.9090
17 Toilet paper and tissue
paper.
4818.1000 and 4818.2000
The Sales Tax Act, 1990
103
18. Spices sold in retail packing
bearing brand names and
trade marks.
09.04, 09.06, 09.08 and 09.10
19. Omitted [Omitted by Finance Act,
2008]
20. Omitted [Omitted by Finance Act,
2008]
21. Shoe polish and shoe cream. 3405.1010
1[]
2[]
32. Fertilizers Respective headings.
33. Cement sold in retail packing Respective headings.
3[]
1 Serial # 22 omitted by SRO # 681(I)/2013 dated July 26, 2013. Earlier it was:
22. Finished or made-up articles of textile and leather, including
garments, footwear, and bed ware, sold in retail packing.
Respective
headings.
2 Serial # 23 to 31 omitted by SRO # 895(I)/2013 dated: October 04, 2013. Earlier it was
inserted by Finance Act, 2013.
23. Household electrical goods, including air conditioners,
refrigerators, deep freezers, televisions, recorders and players,
electric bulbs, tube-light, fans, electric irons, washing machines
and telephone sets
Respective
headings.
24. Household gas appliances, including cooking range, ovens,
geysers and gas heaters
Respective
headings.
25. Foam or spring mattresses, and other foam products for
household use
Respective
headings.
26. Auto parts and accessories sold in retail packing Respective
headings.
27. Lubricating oils, brake fluid, transmission fluid, and other
vehicular fluids and maintenance products in retail packing
Respective
headings.
28. Tyres and tubes Respective
headings.
29. Storage batteries Respective
headings.
30. Arms and ammunition Respective
headings.
31. Paints, distempers, enamels, pigments colours, varnishes, gums,
resins, dyes, glazes, thinners, black, cellulose lacquers and
polishes sold in retail packing
Respective
headings.
3 Serial # 34 & 35 omitted by SRO # 895(I)/2013 dated: October 04, 2013. Earlier it was
inserted by Finance Act, 2013.
The Sales Tax Act, 1990
104
1[]
THE FOURTH SCHEDULE
The Fourth Schedule omitted vide Finance Act, 1998.
34. Tiles sold in retail packing Respective headings.
35. Biscuits, confectionary, chocolates, toffees and candies Respective headings.
1 Serial # 36 omitted by SRO # 681(I)/2013 dated: July 26, 2013. Earlier it was inserted by
Finance Act, 2013.
36. Other goods and products sold in retail packing Respective headings.]
The Sales Tax Act, 1990
105
THE FIFTH SCHEDULE
See section 4
Serial
No.
Description
(1) (2)
1. (i) Supply, repair or maintenance of any ship which is
neither;
(a) a ship of gross tonnage of less than 15 LDT; nor
(b) a ship designed or adapted for use for recreation or
pleasure.
(ii) Supply, repair or maintenance of any aircraft which is
neither;
(a) an aircraft of weight-less than 8000 kilograms; nor
(b) an aircraft designed or adapted for use for recreation
or pleasure.
(iii) Supply of spare parts and equipment for ships and
aircraft falling under (i) and (ii) above.
(iv) Supply of equipment and machinery for pilot age, salvage
or towage services.
(v) Supply of equipment and machinery for air navigation
services.
(vi) Supply of equipment and machinery for other services
provided for the handling of ships or aircraft in a port or
Customs Airport.
2. Supply to diplomats, diplomatic missions, privileged persons and
privileged organizations which are covered under various Acts, Orders,
Rules, Regulations and Agreements passed by the Parliament or
issued or agreed by the Government of Pakistan.
The Sales Tax Act, 1990
106
3.
Supplies to duty free shops, provided that in case of clearance from
duty free shops against various baggage rules issued under the
Customs Act, 1969, (IV of 1969), the supplies from duty free shops
shall be treated as import for the purpose of levy of sales tax.
4.
1[ ]
5.
Supplies of raw materials, components and goods for further
manufacture of goods in the Export Processing Zone.
6. Supplies of such locally manufactured plant and machinery to the
Export Processing Zones and to petroleum and gas sector Exploration
and Production companies, their contractors and sub-contractors as
may be specified by the Federal Government, by notification in the
official Gazette, subject to such conditions and restrictions as may be
specified in such notification.
7.
Supplies made to exporters under the Duty and Tax Remission Rules,
2001 subject to the observance of procedures, restrictions and
conditions prescribed therein.
8. Imports or supplies made to Gawadar Special Economic Zone,
excluding vehicles falling under heading 87.02 of the Pakistan Customs
Tariff, subject to such conditions, limitations and restrictions as the
Board may impose.
2[9 Goods exempted under section 13, if exported by a manufacturer who
makes local supplies of both taxable and exempt goods.
10 Petroleum Crude Oil (PCT heading 2709.0000).
11 Raw materials, components, sub-components and parts, if imported or
purchased locally for use in the manufacturing of such plant and
machinery as is chargeable to sales tax at the rate of zero percent,
subject to the condition that the importer or purchaser of such goods
holds a valid sales tax registration showing his registration category as
“manufacturer”; and in case of import, all the conditions, restrictions,
limitations and procedures as are imposed by Notification under section
19 of the Customs Act, 1969 (IV of 1969), shall apply.
1 Omitted words etc “Supplies against international tenders.” by Finance Act, 2012.
2 Serial # 9 to 12 inserted by Finance Act, 2014.
The Sales Tax Act, 1990
107
12 The following goods and the raw materials, packing materials, subcomponents,
components, sub-assemblies and assemblies imported or
purchased locally for the manufacture of the said goods, subject to the
conditions, limitations and restrictions as specified in Chapter XIV of
the Sales Tax Special Procedure Rules, 2007: (Chapter XIV is still
awaited)–
(i) Colors in sets (PCT heading 3213.1000)
(ii) Writing, drawing and marking inks (PCT heading3215.9010 and
3215.9090)
(iii) Erasers (PCT heading 4016.9210 and 4016.9290)
(iv) Exercise books (PCT heading 4820.2000)
(v) Pencil sharpeners (PCT heading 8214.1000)
(vi) Geometry boxes (PCT heading 9017.2000)
(vii) Pens, ball pens, markers and porous tipped pens(PCT heading
96.08)
(viii) Pencils including color pencils (PCT heading 96.09)
(ix) Milk including flavored milk (PCT heading 04.01 and 0402.9900)
(x) Yogurt (PCT heading 0403.1000)
(xi) Cheese (PCT heading 0406.1010)
(xii) Butter (PCT heading 0405.1000)
(xiii) Cream (PCT heading 04.01 and 04.02)
(xiv) Desi ghee (PCT heading 0405.9000)
(xv) Whey (PCT heading 04.04)
(xvi) Milk and cream, concentrated and added sugar or other
sweetening matter (PCT heading 0402.1000)
(xvii) Preparations for infant use put up for retail sale (PCT heading
1901.1000)
(xviii) Fat filled milk (PCT heading 1901.9090)
(xix) Bicycles (PCT heading 87.12)]
The Sales Tax Act, 1990
108
THE SIXTH SCHEDULE
See section 13(1)
Table-1 (Imports or Supplies)
Serial
No
Description Heading Nos. of the First
Schedule to the Customs
Act, 1969 (IV of 1969)
(1) (2) (3)
1. Live Animals and live poultry. 1[0101.2100 and 0101.3100],
0101.9000, 0102.1010,
2[0102.2110], 3[0102.2120],
4[0102.2130], 5[0102.2190],
6[0102.3900], 7[0102.2910],
8[0102.2920], 9[0102.2930],
10[0102.2900, 0102.9000],
0104.1000, 0104.2000,
0105.1100, 0105.1200,
0105.1900, 0105.9400,
0105.9900, 0106.1100,
0106.1200, 0106.1900,
0106.2000, 0106.3110,
0106.3190, 0106.3200,
0106.3900 and 0106.9000
2.
Meat of bovine animals, sheep
and goat, excluding poultry and
offal, whether or not fresh, frozen
or otherwise, preserved.
02.01, 02.02 and 02.04
3.
Fish and crustaceans excluding
live fish whether or not fresh,
frozen or otherwise preserved.
03.02, 03.03, 03.04, 03.05 and
03.06
1 Substituted for “0101.1000” by Finance Act, 2012.
2 Substituted for “0102.1020” by Finance Act, 2012.
3 Substituted for “0102.1030” by Finance Act, 2012.
4 Substituted for “0102.1040” by Finance Act, 2012.
5 Substituted for “0102.1090” by Finance Act, 2012.
6 Substituted for “0102.9010” by Finance Act, 2012.
7 Substituted for “0102.9020” by Finance Act, 2012.
8 Substituted for “0102.9030” by Finance Act, 2012.
9 Substituted for “0102.9040” by Finance Act, 2012.
10 Substituted for “0102.9090” by Finance Act, 2012.
The Sales Tax Act, 1990
109
4.
(****) [Omitted by Finance Act, 2006]
5. (****)[Omitted by Finance Act, 2006]
6. (****)[Omitted by Finance Act, 2006]
7. (****)[Omitted by Finance Act, 2006]
8. (****)[Omitted by Finance Act, 2006]
9. (****)[Omitted by Finance Act, 2006]
10. (****)[Omitted by Finance Act, 2006]
11. Eggs including eggs for hatching 1[0407.1100,0407.1900] and
2[0407.2100,0407.2900]
12. Live plants including bulbs and
tubers, roots and the like.
0601.1010, 0601.1090,
0601.2000, 0602.1000,
0602.2000, 0602.3000,
0602.4000, 0602.9010 and
0602.9090
13.
Edible vegetables including roots
and tubers, except ware potato
and onions, whether fresh, frozen
or otherwise preserved (e.g. in
cold storage) but excluding those
bottled or canned.
0701.1000,
0702.0000, 0703.2000,
0703.9000, 0704.1000,
0704.2000, 0704.9000,
0705.1100, 0705.1900,
0705.2100, 0705.2900,
0706.1000, 0706.9000,
0707.0000, 0708.1000,
0708.2000, 0708.9000,
0709.1000, 0709.2000,
0709.3000, 0709.4000,
0709.5100, 0709.5910,
0709.5990, 0709.6000,
0709.7000, 0709.9000,
0710.1000, 0710.2100,
0710.2200, 0710.2900,
1 Substituted for “0407.0010” by Finance Act, 2012.
2 Substituted for “0407.0090” by Finance Act, 2012.
The Sales Tax Act, 1990
110
0710.3000, 0710.4000,
0710.8000, 0710.9000,
0712.2000, 0712.3100,
0712.3200, 0712.3300,
0712.3900 and
0712.9000.
14. Pulses. 0713.1000, 0713.2010,
0713.2020, 0713.2090,
0713.3100, 0713.3200,
0713.3300, 0713.3910,
0713.3920, 0713.3990,
0713.4010, 0713.4020,
0713.5000, 0713.9010,
0713.9020 and
0713.9090.
15. Edible fruits excluding imported
fruits (except fruits imported from
Afghanistan) whether fresh, frozen
or otherwise preserved but
excluding those bottled or canned.
0803.0000, 0804.1010,
0804.1020, 1[0808.3000,
0808.4000], 0804.3000,
0804.4000, 0804.5010,
0804.5020, 0804.5030,
0805.1000, 0805.2010,
0805.2090, 0805.4000,
0805.5000, 0805.9000,
0806.1000, 0806.2000,
0807.1100, 0807.1900,
0807.2000, 0808.1000,
0808.2000, 0809.1000,
0809.2000, 0809.3000,
0809.4000, 0810.1000,
0810.2000,
0810.4000, 0810.5000,
0810.6000, 0810.9010,
0810.9090, 0811.1000,
0811.2000, 0811.9000,
0813.1000, 0813.2000,
0813.3000, 0813.4010,
0813.4020 and
0813.4090.
16. Red chillies excluding those sold
in retail packing bearing brand
2[0904.2110] and 3[0904.2210]
1 Substituted for “0804.2000” by Finance Act, 2012.
2 Substituted for “0904.2010” by Finance Act, 2012.
3 Substituted for “0904.2020” by Finance Act, 2012.
The Sales Tax Act, 1990
111
names and trademarks.
17. Ginger excluding those sold in
retail packing bearing brand
names and trademarks.
0910.1000
18. Turmeric excluding those sold in
retail packing bearing brand
names and trademarks.
0910.3000
19. Cereals and products of milling
industry.
1001.1000, 1001.9000,
1002.0000, 1003.0000,
1004.0000, 1005.1000,
1005.9000, 1006.1010,
1006.1090, 1006.2000,
1006.3010, 1006.3090,
1006.4000, 1007.0000,
1008.1000, 1008.2000,
1008.3000, 1008.9000,
1101.0010, 1101.0020,
1102.1000, 1102.2000,
1102.3000, 1102.9000,
1103.1100, 1103.1300,
1103.1900, 1104.2200,
1104.2300,
1104.2900 and 1104.3000
20. Seeds, fruit and spores of a kind
used for sowing.
1209.1000, 1209.2100,
1209.2200, 1209.2300,
1209.2400, 1209.2500,
1209.2900, 1209.3000,
1209.9110,
1209.9120, 1209.9130,
1209.9190 and
1209.9900.
21. Cinchona bark. 1211.9000
22. Sugar beet. 1212.9100
23. Sugar cane. 1212.9990
The Sales Tax Act, 1990
112
24. Edible oils and vegetable ghee,
including cooking oil, on which
Federal Excise Duty is charged,
levied and collected by a
registered manufacturer or
importer as if it were a tax payable
under section 3 of the Act.
Explanation.– Exemption of this
entry shall not be available to
distributors, wholesalers or
retailers.
1507.9000, 1508.9000,
1509.1000, 1509.9000,
1510.0000, 1[1511.1000]
1511.9020, 1511.9030,
1512.1900, 1513.1900,
1513.2900, 1514.1900,
1514.9900, 1515.2900,
1515.5000, 1516.2010,
1516.2020, 1517.1000,
1517.9000 and
1518.0000.
2[]
26. Fruit juices, whether fresh, frozen
or otherwise preserved but
excluding those bottled, canned or
packaged.
2009.1100, 2009.1200,
2009.1900, 2009.2100,
2009.2900, 2009.3100,
2009.3900, 2009.4100,
2009.4900, 2009.5000,
2009.6100, 2009.6900,
2009.7100, 2009.7900,
2009.8000 and
2009.9000.
27. Ice and waters excluding those for
sale under brand names or
trademarks.
2201.1010
28. Poultry feed and Cattle feed
including their all ingredients
except soyabean meal of PCT
heading 2304.0000 and oil-cake of
cottonseed falling under PCT
heading 2306.1000.
2301.2090, 2305.0000,
2306.2000, 2306.3000,
2306.4100, 2306.5000,
2309.9010, 2309.9020,
2309.9090, 2936.2100,
2936.2200, 2936.2300,
2936.2400, 2936.2500,
2936.2600,
2936.2700 and 2936.2800
1 Figure inserted by Finance Act, 2014.
2 Serial # 25 omitted by Finance Act, 2013. Earlier it was:
25. Milk preparations obtained by replacing one or more of the
constituents of milk by another substance, whether or not packed
for retail sale.
1901.1000, 1901.9020 and
1901.9090
The Sales Tax Act, 1990
113
29. Table salt including iodized salt
excluding salt sold in retail
packing bearing brand names and
trademarks.
2501.0010
1[29A] [Omitted by Finance Act, 2011]
2[29B] [Omitted by Finance Act, 2011]
29C. Glass bangles 7020.0090
3[30 ] [Omitted by Finance Act, 2011]
31. Holy Quran, complete or in parts,
with or without translation; Quranic
Verses recorded on any analogue
or digital media; other Holy books.
4901.9910, 8523.2100,
8523.2910, 8523.2990,
4[8523.4910], 5[8523.4920],
6[8523.4190], 8523.5100,
8523.5200, 8523.5910,
8523.5990, 8523.8010,
8523.8020 and
8523.8090
32. Newsprint, newspapers, journals,
periodicals, books but excluding
directories.
4801.0000,
4901.9100, 4901.9990,
4902.1000, 4902.9000,
and 4903.0000
33. Currency notes, bank notes,
shares, stocks and bonds.
4907.0000
7[34 ] [Omitted by Finance Act, 2011]
8[35] [Omitted by Finance Act, 2011]
36. Silver, in unworked condition. 7106.1000,
1 Serial # 29A omitted by Finance Act, 2011.
2 Serial # 29B omitted by Finance Act, 2011.
3 Serial # 30 omitted by Finance Act, 2011.
4 Substituted for “8523.4010” by Finance Act, 2012.
5 Substituted for 8523.4030” by Finance Act, 2012.
6 Substituted for “8523.4090” by Finance Act, 2012.
7 Serial # 34 omitted by Finance Act, 2011.
8 Serial # 35 omitted by Finance Act, 2011.
The Sales Tax Act, 1990
114
7106.9110 and 7106.9190
37. Gold, in unworked condition. 7108.1100,
7108.1210 and 7108.1290
38. Monetary gold. 7108.2000 and
7108.2090
39. Incinerators of disposal of waste
management, motorized sweepers
and snow ploughs.
8417.8000,
8430.2000 and 8479.8990
40.
[Omitted by Finance Act, 2006]
1[41
[Omitted by Finance Act, 2011]
42 [Omitted by Finance Act, 2011]
43 [Omitted by Finance Act, 2011]
44] [Omitted by Finance Act, 2011]
45. Dextrose and saline infusion
giving sets along with empty nontoxic
bags for infusion solution,
Dextrose and saline infusion
giving sets, Artificial parts of the
body, Intra-Ocular lenses and
Glucose testing equipment.
9018.3910, 9018.3920,
9021.3100,
9021.3900 and 9027.8000
46. Goods imported by various
agencies of the United Nations,
diplomats, diplomatic missions,
privileged persons and privileged
organizations which are covered
under various Acts and, Orders,
rules and regulations made
thereunder; and agreements by
the Federal Government provided
that such goods are charged to
zero-rate of customs duty under
Customs Act, 1969 (IV of 1969),
99.01, 99.02, 99.03 and 99.06
1 Serial # 41 to 44 omitted by Finance Act, 2011.
The Sales Tax Act, 1990
115
and the conditions laid therein
47. Import of articles of household and
personal effects including vehicles
and also the goods for donation to
projects established in Pakistan
imported by any of the rulers of
Gulf Shaikhdoms who is in
possession of residential
accommodation in Pakistan and
goods including vehicles by the
United Arab Emirates dignitaries
as are listed in column (2) against
heading No. 99.05 in column (1) of
the First Schedule to the Customs
Act, 1969 (IV of 1969) for their
personal use and for donation to
welfare projects established in
Pakistan subject to the similar
conditions as are envisaged for
the purposes of applying zero-rate
of customs duty on such goods
under the said Act.
99.05
48. Goods imported or supplied under
grants-in-aid for which a specific
consent has been obtained from
the Board; supplies and imports
under agreements signed by the
Government of Pakistan before
the 30th June, 1996, provided the
agreements contained the
provision for exemption of tax at
the time of signing of agreement.
99.03
The Sales Tax Act, 1990
116
49. Import of all goods received, in the
event of a natural disaster or other
catastrophe, as gifts and relief
consignments, including goods
imported for the President’s Fund
for Afghan Refugees, relief goods
donated for Afghan Refugees,
gifts for President’s Fund for
Assistance of Palestine and gifts
received by Pakistani
organizations from Church World
Services or the Catholic Relief
Services subject to the similar
conditions as are envisaged for
the purposes of applying zero-rate
of customs duty under the Custom
Act 1969 (IV of 1969).
99.07, 99.08 and 99.11
50. Articles imported through post as
unsolicited gifts, subject to the
same conditions as are envisaged
for the purposes of applying zerorate
of customs duty under the
Customs Act, 1969 (IV of 1969).
99.09
51. Imported samples, subject to the
same conditions as are envisaged
for the purposes of applying zerorate
of customs duty under the
Customs Act, 1969 (IV of 1969).
99.10
52. Goods imported by or donated to
hospitals run by the Federal
Government or a Provincial
Government; and non-profit
making educational and research
institutions subject to the similar
restrictions, limitations, conditions
and procedures as are envisaged
for the purpose of applying zerorate
of customs duty on such
goods under the Customs Act,
1969 (IV of 1969).
99.13, 99.14 and 99.15
The Sales Tax Act, 1990
117
52-A Goods supplied to hospitals run by
the Federal or Provincial
Governments or charitable
operating hospitals of fifty beds or
more or the teaching hospitals of
statutory universities of two
hundred or more beds.
Respective headings
53. Import of all such gifts as are
received, and such equipment for
fighting tuberculosis, leprosy,
AIDS and cancer and such
equipment and apparatus for the
rehabilitation of the deaf, the blind,
crippled or mentally retarded as
are purchased or otherwise
secured by a charitable non-profit
making institution solely for the
purpose of advancing declared
objectives of such institution,
subject to the similar conditions as
are envisaged for the purposes of
applying zero-rate of customs duty
under the Customs Act, 1969 (IV
of 1969).
99.12, 99.13 and 99.14
54. Educational, scientific and cultural
material imported from a country
signatory to UNESCO Agreement
or a country signatory to bilateral
commodity exchange agreement
with Pakistan, subject to the same
conditions as are envisaged for
the purposes of exemption under
the Customs Act, 1969 (IV of
1969).
99.15
55. Import of replacement goods
supplied free of cost in lieu of
defective goods imported, subject
to similar conditions as are
envisaged for the purposes of
applying zero-rate of customs duty
under the Customs Act, 1969. (IV
of 1969)
99.16
The Sales Tax Act, 1990
118
56. Re-importation of foreign origin
goods which were temporarily
exported out of Pakistan subject to
similar conditions as are
envisaged for the purposes of
applying zero-rate of customs duty
under the Customs Act, 1969. (IV
of 1969)
99.18
57. Goods (including dry fruits
imported from Afghanistan)
temporarily imported into
Pakistan, meant for subsequent
exportation charged to zero-rate of
customs duty subject to the similar
restrictions, limitations, conditions
and procedures as are envisaged
for the purpose of applying zerorate
of customs duty on such
goods under the Customs Act,
1969 (IV of 1969).
99.19, 99.20 and 99.21
58. Import of ship stores, subject to
the procedures, conditions and
restrictions as may be specified by
the Collector of Customs in this
behalf including those
consignments of such stores that
have been released without
charging sales tax since the 1st
July, 1998, but excluding such
consignments of ship stores as
have been cleared on payment of
sales tax.
99.22
The Sales Tax Act, 1990
119
59.
Artificial kidneys, eye cornea,
hemodialysis machines,
hemodialyzers, A.V. fistula
needles, hemodialysis fluids and
powder, blood tubing tines for
dialysis and reverse osmosis
plants for dialysis, double lumen
catheter for dialysis, catheter for
renal failure patient and peritoneal
dialysis solution1[, cochlear
implants system] and angioplasty
equipment (balloons, catheters,
wires and stents), subject to the
similar conditions and procedures
as are envisaged for the purpose
of applying zero-rate of customs
duty on these goods under the
Customs Act, 1969 (IV of 1969).
99.24, 99.25, 99.37 and 99.38
60. Contraceptives and accessories
thereof.
3926.9020 and 4014.1000
61. Goods produced or manufactured
in and exported from Pakistan
which are subsequently imported
in Pakistan within one year of their
exportation, provided conditions of
section 22 of the Customs Act,
1969 (IV of 1969), are complied
with.
Respective headings
2[62.] [Omitted by Finance Act, 2011]
63. Personal wearing apparel and
bonafide baggage imported by
overseas Pakistanis and tourists,
if imported under various baggage
rules and is exempt from Customs
duties.
Respective headings
3[64. [Omitted by Finance Act, 2011]
1 Words etc inserted by Finance Act, 2014.
2 Serial # 62 omitted by Finance Act, 2011.
3 Serial # 64 to 70 Omitted by Finance Act, 2011.
The Sales Tax Act, 1990
120
65. [Omitted by Finance Act, 2011]
66. [Omitted by Finance Act, 2011]
67. [Omitted by Finance Act, 2011]
68. [Omitted by Finance Act, 2011]
69. [Omitted by Finance Act, 2011]
70.] [Omitted by Finance Act, 2011]
71. Goods and services purchased by
non-resident entrepreneurs and in
trade fairs and exhibitions subject
to reciprocity and such conditions
and restrictions as may be
specified by the Board.
Respective headings
1[72 Uncooked poultry meat 02.07
73 Milk and cream 04.01 and 22.02
74 Flavored milk 0402.9900
75 Yogurt 0403.1000
76 Whey 04.04
77 Butter 0405.1000
78 Desi ghee 0405.9000
79 Cheese 0406.1010
80 Processed cheese not grated or
powdered
0406.3000
1 Serial # 72 to 116 inserted by Finance Act, 2014.
The Sales Tax Act, 1990
121
81 Cotton seed 1207.2000
82 Frozen, prepared or preserved
sausages and similar products of
poultry meat or meat offal
1601.0000
83 Meat and similar products of
prepared frozen or preserved meat or
meat offal of all types including
poultry meat and fish
1602.3200,
1602.3900,
1602.5000,
1604.1100,
1604.1200,
1604.1300,
1604.1400,
1604.1500,
1604.1600,
1604.1900,
1604.2010,
1604.2020,
1604.2090,
1604.3000
84 Preparations for infant use, put up for
retail sale
1901.1000
85 Fat filled milk 1901.9090
86 Colours in sets (Poster colours) 3213.1000
87 Writing, drawing and marking inks 3215.9010 and 3215.9090
88 Erasers 4016.9210 and 4016.9290
89 Exercise books 4820.2000
The Sales Tax Act, 1990
122
90 Pencil sharpeners 8214.1000
91 Energy saver lamps 8539.3910
92 Sewing machines of the household
type
8452.1010 and 8452.1090
93 Bicycles 87.12
94 Wheelchairs 8713.1000 and 8713.9000
95 Vessels for breaking up 89.08
96 Other drawing, marking out or
mathematical calculating instruments
(geometry box)
9017.2000
97 Pens and ball pens 96.08
98 Pencils including colour pencils 96.09
99 Compost (non-chemical fertilizer)
produced and supplied locally
Respective headings
100 Construction materials to Gawadar
Export Processing Zone’s investors
and to Export Processing Zone
Gawadar for development of Zone’s
infrastructure.
Respective headings
101 Raw and pickled hides and skins, wet
blue hides and skins, finished leather,
and accessories, components and
trimmings, if imported by a registered
leather goods manufacturer, for the
manufacture of goods wholly for
export, provided that conditions,
procedures and restrictions laid down
in rules 264 to 278 of the Customs
Rules, 2001 are duly fulfilled and
complied with.
Respective headings
The Sales Tax Act, 1990
123
102 Machinery, equipment and materials
imported either for exclusive use
within the limits of Export Processing
Zone or for making exports
therefrom, and goods imported for
warehousing purpose in Export
Processing Zone, subject to the
conditions that such machinery,
equipment,
materials and goods are imported by
investors of Export Processing
Zones, and all the procedures,
limitations and restrictions as are
applicable on such goods under the
Customs Act, 1969 (IV of 1969) and
rules made thereunder shall mutatis
mutandis, apply.
Respective headings
103 Import and supply thereof, up to the
year 2020, of ships of gross tonnage
of less than 15 LDT and all floating
crafts including tugs, dredgers,
survey vessels and other specialized
crafts purchased or bare-boat
chartered by a Pakistan entity and
flying the Pakistan flag, except ships
or crafts acquired for demolition
purposes or are designed or adapted
for use for recreation or pleasure
purposes, subject to the condition
that such ships or crafts are used
only for the purpose for which they
were
procured, and in case such ships or
crafts are used for demolition
purposes within a period of five years
of their acquisition, sales tax
applicable to such ships purchased
for demolition purposes shall be
chargeable.
Respective headings
The Sales Tax Act, 1990
124
104 Substances registered as drugs
under the Drugs Act, 1976 (XXXI of
1976) and medicaments as are
classifiable under Chapter 30 of the
First Proposed to be inserted
Schedule to the Customs Act, 1969
(IV of 1969) except the following,
even if medicated or medicinal in
nature, namely:-
a) filled infusion solution bags
imported with or without
infusion given sets;
b) scrubs, detergents and
washing preparations;
c) soft soap or no-soap soap;
d) adhesive plaster;
e) surgical tapes;
f) liquid paraffin;
g) disinfectants; and
h) cosmetics and toilet
i) preparations.
Respective headings
105 Raw materials for the basic
manufacture of pharmaceutical
active ingredients and for
manufacture of pharmaceutical
products, provided that in case of
import, only such raw materials
shall be entitled to exemption
which are liable to customs duty
not exceeding ten per cent
advalorem, either under the First
Schedule to the Customs Act, 1969
(IV of 1969) or under a notification
issued under section 19 thereof.
Respective headings
106 Import of Halal edible offal of bovine
animals.
0206.1000, 0206.2000, 0206.8000
and 0206.9000
107 Import and supply of iodized salt
bearing brand names and trademarks
whether or not sold in retail packing.
The Sales Tax Act, 1990
125
108 Components or sub-components of
energy saver lamps, namely:-
(a) Electronic Circuit
(b) Plastic Caps (Upper and Lower)
(c) Base Caps B22 and E27
(d) Tungsten Filaments
(e) Lead-in-wire
(f) Fluorescent Powder (Tri Band
Phospher)
(g) Adhesive Additive
(h) Al-Oxide Suspension
(i) Capping Cement
(j) Stamp Pad Ink
(k) Gutter for Suspension
8539.9040
8539.9040
8539.9040
8539.9040
8539.9040
3206.5010
3824.9099
3824.9099
3214.1050
3215.9010
2850.0000
109 Goods imported temporarily with a
view to subsequent exportation, as
concurred by the Board, including
passenger service item, provision
and stores of Pakistani Airlines.
Respective headings
The Sales Tax Act, 1990
126
110 The following items with dedicated
use of renewable source of energy
like solar and wind, subject to
certification by the Alternative Energy
Development Board (AEDB),
Islamabad:-
(a) Solar PV panels;
(b) LVD induction lamps;
(c) SMD, LEDs with or without
ballast, with fittings and fixtures;
(d) Wind turbines including
alternators and mast;
(e) Solar torches;
(f) Lanterns and related instruments;
(g) PV modules along with related
components, including invertors,
charge controllers and batteries.
8541.5000
8539.3990
9405.1090
8502.3100
8513.1040
8513.1090
8541.4000,
8504.4090,
9032.8990 and
8507.0000
111 White crystalline sugar 1701.9910 and 1701.9920
The Sales Tax Act, 1990
127
112 Following cardiology/cardiac surgery,
neurovascular, electrophysiology,
endosurgery, endoscopy, oncology,
urology, gynaecology, disposables
and other equipment:-
A. ANGIOPLASTY PRODUCTS
1. Coronary Artery Stents
2. Drugs Eluting Coronary Artery
Stents
3. Coronary Artery Dilatation
Catheters (Balloons)
4. PTCA Guide Wire
5. PTCA Guiding Catheters
6. Inflation Devices/Priority Packs
B. ANGIOGRAPHY PRODUCTS
1. Angiography Catheters
2. Sheaths
3. Guide Wires
4. Contrast Lines
5. Pressure Lines
6. Mannifolds
C. CONTRAST MEDIA FOR
ANGIOGRAPHY/ ANGIOPLASTY
1. Angiography Accessories
2. ASD Closure Devices
3. ASD Delivery Systems
4. VSD Closure Devices
5. VSD Delivery System
6. Guide Wires
7. Sizing Balloons
8. Sizing Plates
9. PDA Closure Devices
10. PDA Delivery system
D. TEMPORARY PACEMAKERS
(with leads, connectors and
accessories)
E. PERMANENT PACEMAKER
(with leads, connectors and
accessories)
F. HEART FAILURE DEVICES
(with leads, connectors and
accessories)
G. IMPLANTABLE CARDIOVERTES
(with leads, connectors and
accessories)
H. CARDIAC
ELECTROPHYSIOLOGY
PRODUCTS
1. Electrophysiology catheters
2. Electrophysiology cables
3. Electrophysiology connectors
Respective headings
The Sales Tax Act, 1990
128
I. LEAR CARDIOLOGY PRODUCTS
1. Radioactive isotopes
2. Cold kits (Cardioloite MAA, DTPA
etc)
J. CARDIAC SURGERY PRODUCTS
1. Oxygenators
2. Cannulas
3. Prosthetic Heart Valves
4. Luminal Shunts for heart surgery
5. Artificial limbs and appliances
K. EQUIPMENT
1. Cardiac Angiography Machine
2. Echocardiography Machines
3. ETT Machines
4. Gamma Camera for Nuclear
cardiology studies
L. PERIPHERAL INTERVENTIONS
EQUIPMENT
Disposables and other equipment
for peripheral interventions including
stents (including carotid and wall
stents), balloons, sheaths, catheters,
guide wires, filter wires coils, needles,
valves (including rotating homeostatic
valves), connecting cables, inflation
devices adaptors.
113 High Efficiency Irrigation Equipment.
(If used for agriculture sector)
1) Submersible pumps (up to 75 lbs
and head 150 meters)
2) Sprinklers including high and low
pressure (center pivotal) system,
conventional sprinkler equipment,
water reel traveling sprinkler, drip or
trickle irrigation equipment, mint
irrigation sprinkler system.
3) Air release valves, pressure
gauges, water meters, back flow
preventers, and automatic controllers.
8413.7010
8424.8100
8424.2010
8481.1000,
8481.3000,
9026.2000, 9032.8990
114 Green House Farming and Other
Green House Equipment.
(If used for agriculture sector)
1) Tunnel farming equipment.
2) Green houses (prefabricated).
8430.3100, 8430.3900
9406.0010
The Sales Tax Act, 1990
129
115 Plant, machinery and equipment
imported for setting up fruit
processing and preservation units in
Gilgit-Baltistan, Balochistan Province
and Malakand Division upto the 30th
June 2019 subject to the same
conditions and procedure as are
applicable for import of such plant,
machinery and equipment under the
Customs Act, 1969 (IV of 1969).
Respective headings
116 Plant, machinery and equipment
imported for setting up industries in
FATA upto the 30th June 2019
subject to the same conditions and
procedure as are applicable for
import of such plant, machinery and
equipment under the Customs Act,
1969 (IV of 1969).
Respective headings.]
Table 2 (Local Supplies only)
Serial
No
Description Heading Nos. of the First
Schedule to the Customs Act,
1969 (IV of 1969)
(1) (2) (3)
1.
Supply of cottonseed exclusively
meant for sowing purposes,
subject to such conditions as the
Board may specify.
1207.2000.
2. Supply of locally produced crude
vegetable oil obtained from the
locally produced seeds 1[other
than cotton seed], except cooking
oil, without having undergone any
process except the process of
washing.
Respective headings.
1 Words inserted by Finance Act, 2012.
The Sales Tax Act, 1990
130
3. 1[Supplies made by cottage
industry]
Respective headings.
4. Raw material and intermediary
goods manufactured or produced,
and services provided or
rendered, by a registered person,
consumed in-house for the
manufacture of goods subject to
sales tax.
Respective headings.
2[5.] [Omitted by Finance Act, 2011]
6. Supply of fixed assets against
which input tax adjustment is not
available under a notification
issued in terms of clause (b) of
sub-section (1) of section 8 of the
Sales Tax Act, 1990.
Respective headings.
7. Breads prepared in tandoors and
bakeries, vermicillies, nans,
chapattis, sheer mal, bun, rusk.
Respective headings.
8. Foodstuff cooked or prepared inhouse
and served in messes run
on the basis of mutuality and
industrial canteens for workers.
Respective headings.
9. Foodstuff and other eatables
prepared in the flight kitchens and
supplied for consumption onboard
in local flights.
Respective headings.
10. Agricultural produce of Pakistan,
not subjected to any further
process of manufacture.
Respective headings.
11. Supply of ware potato and onions. 0701.9000 and 0703.1000
1 Substituted for “Supplies made by (a) cottage industry; and (b) retailers whose annual turnover
from supplies, whether taxable or otherwise, made in any tax period during the last twelve
months ending any tax period does not exceed rupees five million.” by Finance Act, 2014.
2 Serial # 5 omitted by Finance Act, 2011.
The Sales Tax Act, 1990
131
1[]
2[13 Reclaimed lead, if supplied to
recognized manufacturers of lead
batteries
Respective headings
14 Waste paper Respective headings
15 (a) Sprinkler Equipment
(b) Drip Equipment
(c) Spray pumps and nozzles
Respective headings
16 Raw cotton and ginned cotton Respective headings]
NOTES:
1. For the purpose of this Schedule, for entries against which
classification of headings or sub-headings has been specified,
exemption shall be admissible on the basis of description of goods as
mentioned in column 2 of the Schedule. Pakistan Customs Tariff
classification of headings is provided for ease of reference and
commodity classification purposes only.
2. For the purposes of determining classification of any goods, the
general rules for interpretation of the First Schedule to the Customs
Act, 1969 (IV of 1969) and Explanatory Notes to the Harmonized
Commodity Description and Coding System (relevant version) as
amended from time to time shall be considered authentic source of
interpretation.
3. For the purposes of exemption of sales tax under serial numbers 46,
47, 49, 50, 51, 52, 53, 56, 57, 59, 60 and 62 of this Schedule, the
definitions, restrictions, limitations, conditions and procedures and all
the provisions of Chapter 99 of the First Schedule to the Customs Act,
1969 (IV of 1969), for the purposes of applying zero-rate of customs
duty shall, mutatis mutandis, apply and shall be deemed and construed
to be part of this Schedule.
Table – 3
1 Serial # 12 omitted by Finance Act, 2013. Earlier it was inserted by Finance Act, 2012.
12. Supplies against international tender Respective headings
2 Serial # 13 to 16 inserted by Finance Act, 2014.
The Sales Tax Act, 1990
132
The plant, machinery, equipment and apparatus, including capital
goods, specified in column (2) of the Annexure below, falling under the
HS Codes specified in column (3) of that Annexure, shall be exempt
from the whole of sales tax, subject to the following conditions, besides
the conditions specified in column (4) of the Annexure, namely:-
(i) the imported goods as are not listed in the locally manufactured
items, notified through a Customs General Order issued by the
Board from time to time or, as the case may be, certified as such
by the Engineering Development Board;
(ii) except for S. No. 9 and 14 of the Annexure, the Chief Executive,
or the person next in hierarchy duly authorized by the Chief
Executive or Head of the importing company shall certify in the
prescribed manner and format as per Annex-A that the imported
items are the company’s bonafide requirement. He shall furnish
all relevant information online to Pakistan Customs
Computerized System against a specific user ID and password
obtained under section 155D of the Customs Act, 1969. In
already computerized Collectorates or Customs stations where
the Pakistan Customs Computerized System is not operational,
the Project Director or any other person authorized by the
Collector in this behalf shall enter the requisite information in the
Pakistan Customs Computerized System on daily basis,
whereas entry of the data obtained from the customs stations
which have not yet been computerized shall be made on weekly
basis; and
(iii) in case of partial shipments of machinery and equipment for
setting up a plant, the importer shall, at the time of arrival of first
partial shipment, furnish complete details of the machinery,
equipment and components required for the complete plant, duly
supported by the contract, layout plan and drawings:
Explanation.- For the purpose of Table-3, capital goods mean
any plant, machinery, equipment, spares and accessories,
classified in Chapters 84, 85 or any other chapter of the
Pakistan Customs Tariff, required for-
(a) the manufacture or production of any goods and includes
refractory bricks and materials required for setting up a
furnace, catalysts, machine tools, packaging machinery
and equipment, refrigeration equipment, power
generating sets and equipment, instruments for testing,
research and development, quality control, pollution
control and the like; or
(b) use in mining, agriculture, fisheries, animal husbandry,
The Sales Tax Act, 1990
133
floriculture, horticulture, livestock, dairy and poultry
industry.
ANNEXURE
S.
No
Description PCT heading Conditions
(1) (2) (3) (4)
1 Machinery and equipment
for initial installation,
balancing, modernization,
replacement or expansion
of desalination plants, coal
firing system, gas
processing plants and oil
and gas field prospecting.
Respective
Headings
Nil
The Sales Tax Act, 1990
134
2 Following machinery,
equipment, apparatus, and
medical, surgical, dental
and veterinary furniture,
materials, fixtures and
fittings imported by
hospitals and medical or
diagnostic institutes:-
A. Medical Equipment.
1) Dentist chairs
2) Medical surgical dental
or veterinary furniture
3) Operating Table.
4) Emergency Operating
Lights.
5) Hospital Beds with
mechanical fittings
6) Gymnasium equipment.
7) Cooling Cabinet.
8) Refrigerated Liquid Bath.
9) Contrast Media
Injections (for use in
Angiography & MRI etc).
Injections (for use in
Angiography & MRI etc).
B. Cardiology/Cardiac
Surgery Equipment
1) Cannulas.
2) Manifolds.
3) Intravenous cannula i.v.
catheter.
C. Disposable Medical
Devices
1) Self-disabling safety
sterile syringes.
2) Insulin syringes.
3) Burettes.
E. Other Related
Equipments
1) Fire extinguisher.
2) Fixtures & fittings for
hospitals
9402.1010
9402.9090
9402.9010
9405.4090
9402.9020
9506.9100
8418.5000
3824.9099
3822.0000
9018.3940
8481.8090
9018.3940
9018.3110
9018.3110
7017.9000
8424.1000
Respective
Headings
(a) The project
requirement shall be
approved by the Board
of Investment (BOI).
The authorized officer
of BOI shall certify the
item-wise requirement
of the project in the
prescribed format and
manner as per Annex-
B and shall furnish all
relevant information
online to Pakistan
Customs
Computerized System
against a specific
under-ID and
password obtained
under section 155D of
the Customs Act, 1969
(IV of 1969);
(b) the goods shall not
be sold or otherwise
disposed of without
prior approval of the
Board and payment of
customs duties and
taxes at statutory rates
leviable at the time of
import. Breach of this
condition shall be
construed as a
criminal offence under
the Customs Act, 1969
(IV of 1969);
The Sales Tax Act, 1990
135
3 1. Machinery, equipment,
materials, capital goods,
specialized vehicles (4x4
non-luxury) i.e. single or
double cabin pickups,
accessories, spares,
chemicals and
consumables meant for
mine construction phase or
extraction phase.
2. Construction machinery,
equipment and specialized
vehicles, excluding
passenger vehicles,
imported on temporary
basis as required for mine
construction or extraction
phase.
Respective
Headings
Respective
Headings
1. This concession
shall be available to
those mineral
exploration and
extraction companies
or their authorized
operators or
contractors who hold
permits, licences lease
and who enter into
agreements with the
Government of
Pakistan or a
Provincial
Government.
2. Temporarily
imported goods shall
be cleared against a
security in the form of
a post-dated cheque
for the amount of sales
tax, along with an
undertaking to pay the
sales tax at the
statutory rate in case
such goods are not reexported
on
conclusion of the
project; and
3. The goods shall not
be sold or otherwise
disposed of without
prior approval of the
Board and the
payment of sales tax
leviable at the time of
import. These shall,
however, be allowed
to be transferred to
other entitled mining
companies with prior
approval of the Board.
The Sales Tax Act, 1990
136
4 Coal mining machinery,
equipment, spares,
including vehicles for site
use i.e. single or double
cabin pick-ups, imported
for Thar Coal Field.
Respective
Headings
(a) This concession
shall be available to
those mining
companies or their
authorized operators
or contractors who
hold permits, licenses,
leases and who enter
into agreements with
the Government of
Pakistan or a
Provincial
Government.
(b) The goods shall
not be sold or
otherwise disposed of
without prior approval
of the Board and the
payment of customs
duties and taxes
leviable at the time of
import. These shall,
however, be allowed
to be transferred to
other entitled mining
companies with prior
approval of the Board.
The Sales Tax Act, 1990
137
5 1. Machinery, equipment
and spares meant for initial
installation, balancing,
modernization,
replacement or expansion
of projects for power
generation through oil, gas,
coal, wind and wave
energy including under
construction projects,
which entered into an
implementation agreement
with the Government of
Pakistan.
2. Construction machinery,
equipment and specialized
vehicles, excluding
passenger vehicles
imported on temporary
basis as required for the
construction of project.
Respective
Headings
(i) This concession
shall also be available
to primary contractors
of the project upon
fulfillment of the
following conditions,
namely:-
(a) the contractor shall
submit a copy of the
contract or agreement
under which he
intends to import the
goods for the project;
(b) the Chief Executive
or head of the
contracting company
shall certify in the
prescribed manner
and format as per
Annex-A that the
imported goods are
the projects bona fide
requirement; and
(c) the goods shall
not be sold or
otherwise disposed of
without prior approval
of the FBR on
payment of sales tax
leviable at the time of
import;
(ii) temporarily
imported goods shall
be cleared against a
security in the form of
a post-dated cheque
for the differential
amount between the
statutory rate of sales
tax and the amount
payable under this
notification, along with
an undertaking to pay
the sales tax at the
statutory rates in case
such goods are not reexported
on conclusion
of the project.
The Sales Tax Act, 1990
138
6 1. Machinery, equipment
and spares meant for initial
installation, balancing,
modernization,
replacement or expansion
of projects for power
generation through gas,
coal, hydel, and oil
construction projects.
2. Construction machinery,
equipment and specialized
vehicles, excluding
passenger vehicles,
imported on temporary
basis as required for the
construction of project.
Respective
Headings
-doThe
Sales Tax Act, 1990
139
7 1. Machinery, equipment
and spares meant for initial
installation, balancing,
modernization,
replacement or expansion
of projects for power
generation through nuclear
and renewable energy
sources like solar, wind,
micro-hydel bio-energy,
ocean, waste-to-energy
and hydrogen cell etc.
2. Construction machinery,
equipment and specialized
vehicles, excluding
passenger vehicles,
imported on temporary
basis as required for the
construction of project.
Explanation.- The
expression “projects for
power generation” means
any project for generation
of electricity whether small,
medium or large and
whether for supply to the
national grid or to any other
user or for in house
consumption.
Respective
Headings
-doThe
Sales Tax Act, 1990
140
8
1. Machinery and
equipment meant for power
transmission Respective
Headings and grid stations
including under
construction projects.
Explanation.- For the
purpose of this serial
number, “machinery and
equipment” shall mean,-
(a) machinery and
equipment operated by
power of any description,
such as is used in the
generation of power;
(b) apparatus, appliances,
metering and testing
apparatus, mechanical and
electrical control,
transmission gear and
transmission tower, power
transmission and
distribution cables and
conductors, insulators,
damper spacer and
hardware and parts thereof
adapted to be used in
conjunction with the
machinery and equipment
as specified in clause (a)
above; and
(c) components parts of
machinery and equipment,
as specified in clause (a)
and (b) above, identifiable
for use in or with machinery
imported for the project and
equipment including spares
for purposes of the project.
2. Construction machinery,
equipment and specialized
vehicles, excluding
passenger vehicles,
imported on temporary
basis as required for the
construction of project.
Respective
Headings
-doThe
Sales Tax Act, 1990
141
9
Following machinery,
equipment and other
education and research
related items imported by
technical, training
institutes, research
institutes, schools, colleges
and universities:-
1) Quartz reactor tubes and
holders designed for
insertion into diffusion and
oxidation furnaces for
production of
semiconductor wafers.
2) Other dryers
3) Filtering or purifying
machinery and apparatus
for water
4) Other filtering or
purifying machinery and
apparatus for liquids
5) Personal weighing
machines, including baby
scales; household scales
6) Scales for continuous
weighing of goods on
conveyors
7) Constant weight scales
and scales for discharging
a predetermined weight of
material into a bag or
container, including hopper
scales
8) Other weighing
machinery having a
maximum weighing
capacity not exceeding 30
kg
9) Other weighing
machinery having a
maximum weighing
capacity exceeding 30 kg
but not exceeding 5,000kg
10) Other weighing
machinery
11) Weighing machine
weights of all kinds; parts
of weighing machinery of
machines of heading
8423.2000 & 8423.3000
7017.1010
8419.3900
8421.2100
8421.2900
8423.1000
8423.2000
8423.3000
8423.8100
8423.8200
8423.8900
8423.9000
8423.9000
8517.6970
8514.3000
9016.0010
9016.0090
9032.1010
9032.1090
9032.2000
9032.8100
9032.8990
9032.9000
Respective
Headings
Nil
The Sales Tax Act, 1990
142
12) Other weighing
machine weights of all
kinds; parts of weighing
machinery of machines of
heading 8423.2000 &
8423.3000
13) Networking equipments
like routers, LAN bridges,
hubs excluding switches
and repeaters.
14) Other furnaces and
ovens
15) Electronic balances of
a sensitivity of 5 cg or
better, with or without
weights.
16) Other balances of a
sensitivity of 5 cg or better,
with or without weights.
17) Thermostats of a kind
used in refrigerators and
air-conditioners
18) Other thermostats
19) Manostats
20) Other instruments and
apparatus Hydraulic or
pneumatic
21) Other instruments and
apparatus
22) Parts and accessories
of automatic regulating or
controlling instruments and
apparatus
23) Spares, accessories,
and reagents for scientific
equipments.
10
Machinery, equipment, raw
materials, components and
other capital goods for use
in buildings, fittings,
repairing or refitting of
ships, boats or floating
structures imported by
Karachi Shipyard and
Engineering Works Limited.
Respective
Headings
Nil
The Sales Tax Act, 1990
143
11 Following machinery and
equipment for marble,
granite and gem stone
extraction and processing
industries:
(1) Polishing cream or
material
(2) Fiber glass mesh
(3) Chain saw/diamond
wire saw in all sizes and
dimensions and spares
thereof, diamond wire joints
all types and dimensions,
chain for chain saw and
diamond wires for wire saw
and spare widia.
(4) Gin saw blades.
(5) Gang saw
blades/diamond saw
blades/multiple blades or
all types and dimensions.
(6) Air compressor (27 cft
and above)
(7) Machine and tool for
stone work; sand blasting
machines; tungsten carbide
tools; diamond tools &
segments (all type &
dimensions), hydraulic
jacking machines, hydraulic
manual press machines,
air/hydro pillows,
compressed air rubber
pipes, hydraulic drilling
machines, manual and
power drilling machines,
steel drill rods and spring
(all sizes and dimensions),
whole finding system with
accessories, manual
portable rock drills, cross
cutter and bridge cutters.
3405.4000,
3405.9000
7019.5190
8202.4000,
8202.9100
8202.9910
8202.9990
8414.8010
8464.9000 &
Respective
headings
8466.9100
1. For the projects of
Gem Stone &
Jewelery Industry,
CEO/COO, Pakistan
Gem and Jewelery
Company shall certify
in the prescribed
format and manner as
per Annex-B that the
imported goods are
bonafide project
requirement. The
authorized person of
the Company shall
furnish all relevant
information online to
Pakistan Customs
Computerized System
against a specific user
ID and password
obtained under section
155D of the Customs
Act, 1969.
2. For the projects of
Marble & Granite
Industry, CEO/COO,
Pakistan Stone
Development
Company shall certify
in the prescribed
format and manner as
per Annex-B that the
imported goods are
bonafide project
requirement. The
authorized persons of
the Company shall
furnish all relevant
information online to
Pakistan Customs
Computerized System
against a specific user
ID and password
obtained under section
155D of the Customs
Act, 1969.
The Sales Tax Act, 1990
144
(8) Integral drilling steel for
horizontal and vertical
drilling, extension thread
rods for pneumatic super
long drills, tools and
accessories for rock drills.
3. The goods shall not
be sold or otherwise
disposed of within a
period of five years of
their import except
with the prior approval
of the FBR and
payment of customs
duties and taxes
leviable at the time of
import.
12 Machinery, equipment and
other project related items
including capital goods, for
setting up of hotels, power
generation plants, water
treatment plants and other
infrastructure related
projects located in an area
of 30 km around the zero
point in Gwadar.
Respective
Headings
1. The Division dealing
with the subject matter
of industries, shall
certify in the
prescribed manner
and format as per
Annex-B that the
imported goods are
bonafide project
requirement. The
authorized officer of
the Ministry shall
furnish all relevant
information online to
Pakistan Customs
Computerized System
against.
2. The goods shall not
be sold or otherwise
disposed of without
prior approval of the
FBR and payment of
customs duties and
taxes leviable at the
time of import.
13 Effluent treatment plants Respective
headings
Nil
The Sales Tax Act, 1990
145
14
Following items with
dedicated use of renewable
source of energy like solar,
wind, geothermal etc:-
Solar Home Systems.
a) Inverters
b). Charge
controllers/current
controllers
c). Energy saver lamps of
varying voltages (operating
on DC).
d). Energy saver lamps of
varying voltages (operating
on AC).
e). Light emitting diodes
(light emitting indifferent
colors).
f). Water pumps operating
on solar energy.
g). Water purification plants
operating on solar energy.
h) Batteries NiCd, Li-ion &
Lead Acid specific
utilization and integrated
with solar electrification
system.
(i) Energy Saving Tube
Lights
2. Solar Parabolic Trough
Power Plants.
a). Parabolic Trough
collectors modules.
b). Absorbers/Receivers
tubes.
c). Steam turbine of an
output exceeding 40MW.
d). Steam turbine of an
output not exceeding
40MW.
e). Sun tracking control
system.
f). Control panel with other
accessories.
8504.4090
9032.8990
8539.3910
8539.3910
8541.5000
8413.7090,
8413.7010
8421.2100
8507.3000
8507.8000
8539.3920
8502.3900
8503.0010
8503.0090
8406.8100
8406.8200
8543.7090
8537.1090
8412.8090
8543.7000
8543.7000
Nil
The Sales Tax Act, 1990
146
3. Solar Dish Sterling
Engine.
a). Solar concentrating
dish.
b). Sterling engine.
c). Sun tracking control
system.
d).Control panel with
accessories.
e) Generator
4. Solar Air Conditioning
System
a). Absorption chillers.
b). Cooling towers.
c). Pumps.
d). Air handling units.
e). Fan coils units.
f). Charging & Testing
equipment.
5. Solar Desalination
System
a) Solar photo voltaic
panels
b) Solar water pumps
c) Storage batteries.
d) Charge controllers.
e) Inverters.
6. Solar Thermal Power
Plants with accessories.
7. Solar Water Heaters
with accessories.
a) Vacuum tubes (Glass).
b) Selective coating for
absorber plates.
c) Copper, aluminum and
stainless steel sheets.
d) Copper and aluminum
tubes.
8. PV Modules
a). Solar cells.
b) . Tempered Glass.
c) Aluminum frames.
d) O-Ring.
e) Flux
f) Adhesive labels.
g) Junction box + Cover
h) Sheet mixture of Paper
and plastic
i) Ribbon for PV Modules
(made of silver & Lead)
j) Bypass diodes.
k) EVA (Ethyl Vinyl
Acetate) Sheet (Chemical).
8543.7090
8406.8200
8501.6100
8415.1090
8418.6990
8419.8910
8413.3090
8415.8200
8415.9099
9031.8000
8421.2100
8541.4000
8413.3090
8507.2090
9032.8990
8504.4090
8502.3900
8419.1900
7020.0090
Respective
heading
Respective
heading
Respective
heading
8541.4000
8541.4000
7007.2900
7610.9000
4016.9990
3810.1000
3919.9090
8538.9090
3920.9900
Respective
headings
8541.1000
3920.9900
8479.8990
8514.3000
8461.9000
3824.9099
2848.0000
Respective
headings
9030.8900
8504.4020
The Sales Tax Act, 1990
147
9. Solar Cell
Manufacturing
Equipment.
a) Crystal (Grower) Puller
(if machine).
b). Diffusion furnace.
e). Cutting and shaping
machines for silicon ingot.
f). Solar grade polysilicon
material.
g). Phosphene Gas.
h). Aluminum and silver
paste.
10. Pyranometers and
accessories for solar
data collection
11. Solar chargers for
charging electronic
devices
12. Remote control for
solar charge controller.
13. Wind Turbines.
a). Rotor
b). Hub
c) Generator
d) Deep cycle battery
14. Wind water pump
15. Geothermal energy
equipments.
1). Geothermal Heat
Pumps
2). Geothermal Reversible
Chillers
3). Air handlers for indoor
quality control equipments
4). Hydronic heat pumps
5). Slim Jim heat
exchangers
6). HDPE fusion tools
7). Geothermal energy
Installation tools and
Equipment
8). Dehumidification
equipment
9). Thermostats and Intelli
Zone
16. Any other item
approved by the
Alternative Energy
Development Board
(AEDB) and concurred to
by the FBR.
8543.7010
8412.8090
8412.9090
8412.9090
8501.6490
8507.8000
8413.8190
8418.6100,
8418.6990
8418.6990
8415.8300
8418.6100
8419.5000
8515.8000
8419.8990
8479.6000
9032.1090
The Sales Tax Act, 1990
148
15 Following items for
promotion of renewable
energy technologies
1. LVD induction lamps
2. SMD, LEDs with or
without ballast with fittings
and fixtures.
3. Wind turbines including
alternators and mast.
4. Solar torches
5. Lanterns and related
instruments
6. PV module, with or
without, the related
components including
invertors, charge
controllers and batteries
8539.3990
9405.1090
8502.3100
8513.1040
8513.1090
8541.4000,
8504.4090,
9032.8990,
8507.0000
Nil
Subject to certification
by AEDB that the
inverters, charge
controllers and
batteries being
imported are in
quantities which
commensurate with
the PV modules being
imported.
16 Plant, machinery,
equipment and specific
items used in production of
bio-diesel.
Respective
headings
The Alternative Energy
Development Board
(AEDB), Islamabad
shall certify in the
prescribed manner
and format as per
Annex-B that the
imported goods are
bonafide project
requirement. The
goods shall not be
sold or otherwise
disposed of within a
period of five years of
their import except
with the prior approval
of the FBR and
payment of customs
duties and taxes
leviable at the time of
import.
The Sales Tax Act, 1990
149
Annex-A
Header Information
NTN/FTN of Importer
Regulatory Authority no.
Name of Regulatory authority
(1)
(2)
(3)
Details of Input goods (to be filled by the chief executive of the
importing company)
Goods imported (Collectorate of
import)
HS
Code
Descri
ption
Specs
Custom
Duty
rate
(applicable)
Sales
Tax
rate
(applic
able)
WHT
UOM
Qua
ntity
Quantity
imported
Colle
ctorat
e
CRN/
Mach
No.
Date
of
CRN/
Mach.
No.
(4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15)
CERTIFICATE. It is certified that the description and quantity
mentioned above are commensurate with the project requirement and
that the same are not manufactured locally. It is further certified that the
above items shall not be used for any other purpose.
Signature of Chief Executive, or the person next in hierarchy duly
authorized by the Chief Executive
Name ______________________
N.I.C. No. __________________________________
NOTE:- In case of clearance through Pakistan Customs Computerized
System, the above information shall be furnished online against a
specific user I.D. and password obtained under section 155D of the
Customs Act, 1969.
The Sales Tax Act, 1990
150
Explanation.-
Chief Executive means.-
1. owner of the firm, in case of sole proprietorship; or
2. partner of firm having major share, in case of partnership firm; or
3. Chief Executive Officer or the Managing Director in case of limited
company or multinational organization; or
4. Principal Officer in case of a foreign company.
Annex-B
Header Information
NTN/FTN of Importer Approval No.
Name of Regulatory authority
(1)
(2)
Details of Input goods (to be filled by the chief executive of
the importing company)
Goods imported (Collectorate
of import)
HS
Code
Descri
ption
Sp
ecs
Custom
Duty
rate
(applicable)
Sales
Tax
rate
(appli
cable)
WH
T
Quan
tity
UOM
Quantity
imported
Colle
ctora
te
CRN/
Mach
No.
Date
of
CRN/
Mach.
No.
(3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)
The Sales Tax Act, 1990
151
CERTIFICATE. Before certifying the above-authorized officer of the
Regulatory Authority shall ensure that the goods are genuine and
bonafide requirement of the project and that the same are not
manufactured locally.
Signature ________________________
Designation ________________________
NOTE:- In case of clearance through Pakistan Customs Computerized
System, the above information shall be furnished on line against a
specific user I.D. and password obtained under section 155D of the
Customs Act, 1969.
The Sales Tax Act, 1990
152
THE SEVENTH SCHEDULE
The Seventh Schedule omitted by Finance Act, 1997.
The Sales Tax Act, 1990
153
1[THE EIGHTH SCHEDULE
S.
No.
Description
Heading
Nos. of the
First
Schedule to
the
Customs
Act, 1969
(IV of 1969)
Rate
of
Sales
Tax
Condition
(1)
(2) (3) (4) (5)
1 Soyabean
meal
2304.0000
5%
2 Oil cake and
other solid
residues,
whether or not
ground or in
the form of
pellets
2306.1000
5%
3 Directly
reduced iron
72.03
5%
4 Oilseeds
meant for
sowing.
Respective
headings
5%
Import thereof
subject to the
condition that Plant
Protection
Department of
Ministry of Food,
Agriculture and
Livestock certifies
that imported seeds
are fungicide and
insecticide treated
and are meant for
sowing.
5 Raw cotton
and ginned
cotton
Respective
headings
5%
On import
6 Plant and
machinery not
manufactured
Respective
headings
5%
(i) On import of
such plant and
machinery by
1 The Schedule Eight inserted by Finance Act, 2014.
The Sales Tax Act, 1990
154
locally and
having no
compatible
local
substitutes
registered
manufacturers,
post-dated
cheque(s) equal to
the differential
amount of sales tax
payable at import
stage, shall be
submitted to the
customs
authorities, which
shall be returned on
furnishing proof of
filing of first sales
tax return after
import of such
machinery, showing
the import of such
machinery;
(ii) On import by
commercial
importers, goodfor-
payment
cheque, bank
guarantee, pay
order or treasury
challan showing
deposit, equal to
the differential
amount of sales
tax payable at
import stage, shall
be submitted to the
customs
authorities, which
shall be returned
back, or as the
case may be,
refunded, after
evidence of
subsequent supply
to registered
manufacturers or
industrial users is
furnished to the
customs
authorities;
(iii) Supply of such
The Sales Tax Act, 1990
155
imported plant and
machinery by
commercial
importers to
unregistered
persons or persons
other than
manufacturers shall
be liable to
standard rate of
tax, and evidence
to that effect shall
be produced to the
customs authorities
for release of the
abovementioned
instruments or
refund of the
amount paid at
import stage;
(iv) Subsequent
supply of plant and
machinery imported
or acquired by
registered
manufacturers to
unregistered
persons or persons
other than
manufacturers shall
be liable to tax at
standard rate; and
(v) the validity
period of
instruments
furnished under this
provision shall not
be less than one
hundred and twenty
days.
Explanation.–– For
the purpose of this
provision, plant and
machinery means
such plant and
machinery as is
used in the
The Sales Tax Act, 1990
156
manufacture or
production of goods.
Table-2
Plant, machinery, equipment and apparatus, including capital goods, specified
in column (2) of the Annexure below, falling under the HS Codes specified in
column (3) of that Annexure, shall be charged to sales tax at the rate of five
percent, subject to the following conditions, besides the conditions specified in
column (4) of the Annexure, namely:-
(i). the imported goods as are not listed in the locally manufactured items,
notified through a Customs General Order issued by the Board from
time to time or, as the case may be, certified as such by the
Engineering Development Board.
(ii) the Chief Executive, or the person next in hierarchy duly authorized by
the Chief Executive or Head of the importing company shall certify in
the prescribed manner and format as per Annex-A that the imported
items are the company’s bonafide requirement. He shall furnish all
relevant information Online to Pakistan Customs Computerized System
against a specific user ID and password obtained under section 155D
of the Customs Act, 1969. In already computerized Collectorates or
Customs stations where the Pakistan Customs Computerized System
is not operational, the Project Director or any other person authorized
by the Collector in this behalf shall enter the requisite information in the
Pakistan Customs Computerized System on daily basis, whereas entry
of the data obtained from the customs stations which have not yet been
computerized shall be made on weekly basis; and
(iii) in case of partial shipments of machinery and equipment for setting up
a plant, the importer shall, at the time of arrival of first partial shipment,
furnish complete details of the machinery, equipment and components
required for the complete plant, duly supported by the contract, lay out
plan and drawings.
Explanation.-In this Table the expression, capital goods mean any
plant, machinery, equipment, spares and accessories, classified in
chapters 84, 85 or any other chapter of the Pakistan Customs Tariff,
required for-
(a) the manufacture or production of any goods, and includes
refractory bricks and materials required for setting up a furnace,
catalysts, machine tools, packaging machinery and equipment,
refrigeration equipment, power generating sets and equipment,
instruments for testing, research and development, quality
control, pollution control and the like; or
(b) use in mining, agriculture, fisheries, animal husbandry,
The Sales Tax Act, 1990
157
floriculture, horticulture, livestock, dairy and poultry industry.
Annexure
S.
No
Description
PCT
heading
Conditions
(1)
(2)
(3)
(4)
1 Machinery and equipment
for development of grain
handling and storage
facilities.
Respective
Headings
Nil
2 Cool chain machinery and
equipment.
Respective
Headings
Nil
3
Following items imported
by Call Centers,
Business Processing
Outsourcing facilities
duly approved by
Telecommunication
Authority.
(1) Telephone sets/head
sets.
(2) Cat 5/Cat 6/Power
cables
(3) PAPX Switch
(4) Plasma TV
(5) Dedicated telephone
exchange system for call
centers.
(6) Other (digital call
8517.1100
8544.4990
8517.6290
8528.7212
8517.6290
8519.8990
Nil
The Sales Tax Act, 1990
158
recorders)
4 1. Machinery, equipment,
materials, capital goods,
specialized vehicles (4x4
non luxury) i.e. single or
double cabin pickups,
accessories, spares,
chemicals and
consumables meant for
mineral exploration phase.
2. Construction machinery,
equipment and specialized
vehicles, excluding
passenger vehicles,
imported on temporary
basis as required for the
exploration phase.
Respective
Headings
1. This concession
shall be available
to those Mineral
Exploration and
Extraction
Companies or their
authorized
operators or
contractors who
hold permits,
licenses, leases
and who enter into
agreements with
the Government of
Pakistan or a
Provincial
Government.
2. Temporarily
imported goods
shall be cleared
against a security
in the form of a
post-dated cheque
for the differential
amount between
the statutory rate of
customs duty and
sales tax and the
amount payable
under this
notification, along
with an
undertaking to pay
the customs duty
and sales tax at
the statutory rates
in case such goods
are not re-exported
on conclusion of
the project.
3. The goods shall
not be sold or
The Sales Tax Act, 1990
159
otherwise disposed
of without prior
approval of the
FBR and the
payment of
customs duties and
taxes leviable at
the time of import.
These shall
however be
allowed to be
transferred to other
entitled mining
companies with
prior approval of
the Board.
5 Complete plants for
relocated industries.
Respective
Headings
Nil
6 Machinery, equipment and
other capital goods meant
for initial installation,
balancing, modernization,
replacement or expansion
of oil refining (mineral oil,
hydro- cracking and other
value added petroleum
products), petrochemical
and petrochemical
downstream products
including fibers and heavy
chemical industry,
cryogenic facility for
ethylene storage and
handling.
Respective
Headings
Nil
7 Proprietary Formwork
System for
building/structures of a
height of 100 ft and above
and its various items/
components consisting of
the following, namely:-
1) Plastic tube.
7308.4000
(i) If not
manufactured
locally and
imported by the
construction
companies
registered with the
Pakistan
Engineering
The Sales Tax Act, 1990
160
2) Plastic tie slot
filters/plugs, plastic cone.
3) Standard steel ply
panels, Special sized steel
ply panels, wedges, tube
clamps (B-Type & G
Type), push/pull props,
brackets (structure), steel
soldiers (structure), drop
head, standard, prop tic,
buard rail post (structure),
coupler brace, cantilever
frame, decking beam/Infill
beam and doorway
angles.
3917.2390
3926.9099
Council;
(ii) the system is to
be procured from a
well renowned
international
manufacturer;
(iii) a certificate
from one of the
following
International Preshipment
Inspection
Companies/Survey
Firms to the extent
that all the
components/parts
are to be used in
the
Proprietary
Formwork System
for construction of
structures/buildings
of more than 100
feet height, is
produced, namely:-
(a) Messrs Lloyds
of London; (b)
Messrs Quality
Tech, LLC; (c)
Messrs ABS; (d)
Messrs Bureau
Veritas; and (e)
Messrs SGS; and
(iv) The Pakistan
Engineering
Council shall certify
that the imported
Proprietary
Formworks System
conform to the
requirement of the
Company’s
project..
-doThe
Sales Tax Act, 1990
161
4) Lifting Unit (Structure)
5) Bolts, tie bolts, anchor
bolt assembly (fastener),
anchor screw (fastener).
6) Nuts
7) Steel pins, tie wing nut
(fastener).
8) Steel washers, water
plate (fastener).
(9) Adjustable base jack
(thread rod with nut and
steel plate), adjustable fork
head (threaded rod with
nut and steel channel).
7308.4000
7308.9090
7318.1590
7318.1690
7318.1900
7318.2290
8425.4900
-do-
-do-
-do-
-do-
-do-
Annex-A
Header Information
NTN/FTN of Importer
Regulatory authority
no.
Name of Regulatory
authority
The Sales Tax Act, 1990
162
(1)
(2)
(3)
Details of Input goods (to be filled by the chief executive of
the importing company)
Goods imported
(Collectorate of import)
HS Code
Descri
ption
Spe
cs
Custo
m
Duty
rate
(applic
-able)
Sales
Tax
rate
(applic
able)
WHT
Quantity
UO
M
Quantit
y
importe
d
Colle
ctora
te
CRN/
Mach
No.
Date
of
CRN
/
Mac
h.
No.
(4) (5) (6) (7) (8) (9) (1
0)
(11) (12) (13) (14) (15)
CERTIFICATE. It is certified that the description and quantity mentioned
above are commensurate with the project requirement and that the same are
not manufactured locally. It is further certified that the above items shall not be
used for any other purpose.
Signature of Chief Executive, or
the person next in hierarchy duly
authorized by the Chief Executive
Name ______________________
N.I.C. No. __________________________________
NOTE:- In case of clearance through Pakistan Customs Computerized
System, the above information shall be furnished on line against a specific
user I.D. and password obtained under section 155D of the Customs Act,
1969.
Explanation.-
Chief Executive means.-
1. owner of the firm, in case of sole proprietorship; or
2. partner of firm having major share, in case of partnership firm; or
The Sales Tax Act, 1990
163
3. Chief Executive Officer or the Managing Director in case of limited company
or multinational organization; or
4. Principal Officer in case of a foreign company.
Annex-B
Header Information
NTN/FTN of Importer Approval No.
(1) (2) (3)
Details of Input goods (to be filled by the authorized
officer of the Regulatory Authority)
Goods imported (Collectorate of
import)
HS
Cod
e
Desc
riptio
Specs
Custom
Duty
rate
(applica
ble)
Sales
Tax
rate
(applic
able)
WHT
Quantity
UOM
Quantit
y
import
ed
Collector
ate
CR
N/M
ach.
No.
Date
of
CRN/
Mach
No.
(3) (4) (5) (6) (7) (8) (9
)
(1
0)
(11) (12) (13) (14)
CERTIFICATE. Before certifying the above-authorized officer of the
Regulatory Authority shall ensure that the goods are genuine and bonafide
requirement of the project and that the same are not manufactured locally.
Signature ________________________
Designation ________________________
NOTE:- In case of clearance through Pakistan Customs Computerized
System, the above information shall be furnished on line against a specific
user I.D. and password obtained under section 155D of the Customs Act,
1969.
The Sales Tax Act, 1990
164
1[NINTH SCHEDULE
[See sub-section (3B) of section 3]
TABLE
(1) (2) (3) (4) (5)
S.
No.
Description /
Specification of
Goods
Sales tax on
import
(payable by
importer at
the time of
import)
Sales tax
(chargeable at
the time of
registration of
IMEI number
by CMOs)
Sales tax
on supply
(payable at
time of
supply by
CMOs)
1. Subscriber
identification Module
(SIM) Cards
- - Rs. 250
2. A. Low Priced
Cellular Mobile
Phones or Satellite
Phones
i. All cameras: 2.0
mega-pixels or less
ii. Screen size: 2.6
inches or less
iii. Key pad
Rs. 150
Rs. 150 -
3. B. Medium Priced
Cellular Mobile
Phones or Satellite
Phones
i. One or two cameras:
between 2.1 to 10
mega-pixels
ii. Screen size:
between 2.6 inches
and 4.2 inches
Rs. 250 Rs. 250 -
1 The Schedule Ninth inserted by Finance Act, 2014.
The Sales Tax Act, 1990
165
iii. Micro-processor:
less than 2 GHZ
C. Smart Cellular
Mobile Phones or
Satellite Phones
i. One or two cameras:
10 mega-pixels and
above
ii. Touch Screen: size
4.2 inches and above
iii. 4GB or higher
Basic Memory
iv. Operating system
of the type IOS,
Android V2.3, Android
Gingerbread or higher,
Windows 8 or
Blackberry RIM
v. Micro-processor:
2GHZ or higher, dual
core or quad core
Rs. 500 per
phone
Rs. 500
LIABILITY, PROCEDURE AND CONDITIONS
(i) In case of the goods specified against S.No. 1 of the Table, the liability
to charge, collect and pay tax shall be on the Cellular Mobile Operator
(CMO) at the time of supply. In case of the goods specified against S.
No. 2, the liability to pay sales tax at the time of import shall be on the
importer, and the liability to charge, collect and pay sales tax payable
on supplies shall be on the Cellular Mobile Operator at the time of
registration International Mobile Equipment Identity (IMEI) number in
his system.
(ii) The Cellular Mobile Operators shall, if not already registered, obtain
registration under the Sales Tax Act, 1990.
The Sales Tax Act, 1990
166
(iii) No IMEI shall be registered in his system by a Cellular Mobile Operator
without charging and collecting the sales tax as specified in the Table.
(iv) The Cellular Mobile Operator shall deposit the sales tax so collected
t

hrough his monthly tax return in the manner prescribed in section 26 of
the Sales Tax Act, 1990, and rules made thereunder.
(v) The Cellular Mobile Operator shall maintain proper records of all IMEI
numbers registered for a period of six years, and such records shall be
produced for inspection, audit or verification, as and when required, by
an authorized officer of Inland Revenue.
(vi) The Pakistan Telecommunication Authority shall provide data regarding
IMEI numbers registered with other Cellular Mobile Operators to
prevent double taxation on the same IMEI number in case of switching
by a subscriber from one operator to another, and to provide data
regarding registration of IMEI numbers to the Board on monthly basis.
(vii) No adjustment of input tax shall be admissible to the Cellular Mobile
Operator or any purchaser of cellular mobile phone against the sales
tax charged and paid in terms of this Schedule.
(viii) The tax specified in column (4) of the Table shall be charged, collected
and paid with effect from such date as may be specified by the Board
and the sales tax specified in column (3) shall stand withdrawn from the
date so specified.
Note:- Notwithstanding anything contained in any other law for the time being
in force, the levy, collection and payment of sales tax under Notification
No. S.R.O. 460(I)/2013 dated the 30th May, 2013, shall be always
deemed to have been lawfully and validly, levied, collected and paid.