This document discusses sales tax in Pakistan. It defines sales tax and notes that it is charged on locally produced and imported goods with some exemptions. It outlines who must register and pay sales tax, including manufacturers, retailers above a certain threshold of sales, importers, wholesalers, and others required by law. It also discusses sales tax invoices, input and output tax, tax rates schedules, and provides an example calculation of net tax owed. Finally, it briefly discusses provincial sales tax on services in Punjab and Pakistan's Income Support Levy Act.

2. PRESENTATION BY:
HASSAN SHAHID

3. A SALES TAX IS A TAX PAID TO A GOVERNING BODY FOR
THE SALES OF CERTAIN GOODS AND SERVICES. LAWS ALLOW (OR
REQUIRE) THE SELLER TO COLLECT FUNDS FOR THE TAX FROM THE
CONSUMER AT THE POINT OF PURCHASE.

4. WHO IS GONNA REGISTER AND PAY THE SALES
TAX?
 Sales Tax is chargeable on all locally produced and imported
goods except computer software, poultry feeds, medicines
and unprocessed agricultural produce of Pakistan and other
goods specified in Sixth Schedule to The Sales Tax Act, 1990.

5. TYPES OF REGISTRATION
 By application
 Voluntary
 Compulsory

6. PERSONS MUST BE REGISTERED UNDER
SALES TAX
 A manufacturer not having a cottage industry
 A retailer whose supplies values exceeds 5 million
any time in last 12 months
 An importer
 A wholeseller,dealer and distributer
 A person who is required under any law i:e under
provincial or federal law is bound to be rgistered
 Any commercial exporter

7. COTTAGE INDUSTRY
 Annual sales for taxable supplies must not exceed
5 million any time in last 12 months
 Annual utility bills during last 12 months must not
exceed Rs.700,000

8. SALES TAX INVOICE
 Sales tax invoice can be issued only by the sales tax
registered person
 It is required for a registered person to issue it wether he sells
to a registered person or not
 A further tax of 1% is to be charged to un registered person
 An unregistered person can not issue sales tax invoice
 A person who purchased goods from an unregistered person
cannot claim his credit refund as he has not paid it
 Sales invoice is an evidence of input tax and output tax

9. SALES TAX INVOICE

12. Output tax
 It is the total amount of
sales tax charged at
current rate of sales tax
on taxable sales made
during the month i.e.
total sales excluding
exempt and zero-rated
supplies.
Input tax
 It is the amount paid by
the registered person
on business purchases
and imports. He/she
can claim a deduction
for the sales tax paid
as input tax if used in
the manufacture of
taxable supplies.

13. Schedule number Rate of sales tax
First schedule Omitted
Second schedule Omitted
Third schedule 17% of retail price
Fourth schedule Omitted
Fifth schedule 0%
Sixth schedule Exempt from sales tax
Seventh schedule Omitted
SALES TAX SCHEDULES

14. NUMERICAL
 Data of Shahab zari house is as follows:
1. Sales to registered person=800,000
2. Sales to unregistered person=700,000
3. Sales against tax invoice=500,000
4. Export of goods=70,000
5. Sales to reg. person @20% discount=400,000
6. Sales to unregistered person @10% discount=45,000
7. Purchase from reg, person=700,000
8. Purchase from non reg. person=600,000
9. Purchase against commercial invoice=200,000
10. Import of raw material=300,000
11. Tax refundable of last month=75,000
 Calculate net tax??

15. Description Amount(Rs.)
Sales to reg. person(800,000*17%) 136,000
Sales to un reg. person(700,000*18%) 126,000
Sales against invoice(500,000*17%) 85,000
Export of goods(70,000*0%) 0
Sales to reg. person @disc.(500,000*17%) 85,000
Sales to un reg. person @disc,(50,000*18%) 9,000
Total outputs 441,000
Purchase from reg. person(700,000*17%) (119,000)
Import raw material(300,000*17%) (51,000)
Tax payable 271,000
Less: tax refundable (75,000)
Net tax 196,000

16. PROVINCIAL SALES TAX IN PUNJAB
 Enforce sales tax on services by Punjab revenue
authority(PRA)
 Enacted the punjab sales tax on services act 2012
in supercession of punjab sales tax ordinance 2000

17. SERVICES COVERED UNDER THIS ACT
 Hotels and restaurants
 Clubs
 Caterers
 Customs agents
 Ads on tv
 Ship chandlers
 Stevedores
 Telecommunication
 Insurance banking companies
 Stock brokers
 Shipping agents
 Courier services
 franchises

18. RATES APPLIED ON THESE SERVICES SECTORS
 Rates applied by PRA on these services is 0.5% of
their annual income

19. INCOME SUPPORT LEVY ACT 2013
 Definition section(2)
 Charge of levy section(3)
 Time and manner of payment of levy
section(4)
 Assessment of levy section(5)
 Default surcharge section(6)
 Recovery,appeals.revisions and rectification of levy
section(7&8)
 Rate of levy section(9)
 Power to make rules section(10)