Before Registration and Filing of your Sales Tax Return, it is recommended that one should establish basic understanding regarding these processes. Knowledge of basic concepts would not only ensure that the tasks are performed easily but also in the prescribed manner.
Sales Tax is a tax
levied by the Federal Government under the Sales Tax Act, 1990, on sale and
supply of goods and on the goods imported into Pakistan. Sales Tax on services
is levied by the Federal Government under The
Islamabad Capital Territory (Tax on Services) Ordinance, 2001.
INPUT TAX
Input tax is the tax
paid by registered person on the taxable goods and services purchased or
acquired by him. This also includes the sales tax paid on imports.
OUTPUT TAX
It is the sales tax
charged and levied on the sale or supply of goods or services on which sales
tax is leviable.
SCOPE OF SALES TAX
Sales tax applies to
the following:
GOODS
All goods are taxable
except those that have been exempted under section 13 as mentioned under 6th
Schedule of the Sales Tax Act, 1990. For sales tax purposes goods include every
kind of movable property other than actionable claims, money, stocks, shares
and securities.
IMPORTS INTO PAKISTAN
All goods imported
into Pakistan are liable to sales tax at the time of import, except goods
specifically exempted under section 13 as mentioned in Sixth Schedule to the
Act.
EXEMPT GOODS
Under section 13 of
The Sales Tax Act 1990, the Sixth Schedule of the Sales Tax Act, 1990
specifically and explicitly mentions those goods on which exemption of sales
tax is available. Other exemptions are available through various notifications
(SROs) issued by the Government under section 13.