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  1. 1. FINANCE ACT 2009 CHANGES IN SALES TAX ACT, 1990 Presented By Syed Muhammad Ijaz, FCA, LL.B.
  2. 2. SYNOPSIS OF AMENDMENTS Section 8B amended to allow refund to registered person beside adjustment that was already allowed u/s 8B(2) Section 11 being changed to reduce the time of extension in passing the order from 120 to 60 days. However, for calculation of such 60 days adjournments by petitioner, stays, ADR proceeding be excluded and such exclusion shall not in any case exceed 30 days Amendments in section 36 (for recovery of tax not levied or short levied) made similar to section 11 Amendments in section 45B (Appeal to Collector of Appeals) made similar to section 11 Section 34 changed to incorporate Kibor plus three percent for calculation of additional tax. Kibor also defined u/s 2 clause 14A. Compensation for delayed refund u/s 67 is also linked with Kibor
  3. 3. Section 38 amended to allow only board to give authority to officers to access the record, previously this was with collector as well Section 47 amended to give reference to section 194-A, B and C of the customs Act for making reference to High Court. Subsections 3,4,5,6,7,8 and 9 being redundant now are omitted Section 47A changed to extend the time of ADR’s recommendation from 60 to 90 days If the Committee fails to give recommendation the board can dissolve the committee and constitute a new committee that shall decide in further 90 days. Still no recommendation the matter then be taken to appropriate level for resolution If recommendation is received within time by the board then board shall within 45 days decide the matter previously there was no such limit
  4. 4. Section 33 subsection 12 amended to include default (i.e. obstruction to officers) of section 40B (posting of officers at premises by the board) AMENDMENTS IN 6TH SCHEDULE TABLE 1 Onions and shallots Grains Dry whole and split Seeds for sowing Beans and others News print in Rolls or sheets Tractors, bulldozers and combined harvesters Table 2 Seeds Onions and Shallots
  5. 5. SROs AND CIRCULARS SRO 509(I)/2007 Goods charged to tax at zero rate (import and supply). Clause 2 amended through SRO 471(1)/2009 to exclude monofilament, sun shedding, fishing nets of nylon and others, polyethylene or nylon ropes and tire cord fabrics under respective headings (w.e.f June 14, 2009 ) SRO 549(i)/2008 Goods charged to tax at zero rate amended through SRO 472(I)/2009 to restrict zero rating of plant and machinery to items not specified in annexure to the said SRO w.e.f June 14, 2009. SRO 549(i)/2008 Goods charged to tax at zero rate further amended through SRO 625(I)/2009. SRO 551(I)/2008 amended via SRO 473(I)/2009 to include cinematographic film exposed in Sales tax exempt goods. W.e.f June 14, 2009 SRO 542(I)/2008 changed via SRO 476(I)/2009 to reduce amount of sales tax on import or supply of per hand set of cellular phone from 500 Rs. To 250 Rs. (w.e.f July 1, 2009) SRO 1007(I)/2005 amended via SRO 477(I)/2009 to include lysine monohydro sulphate in exempted poultry feed and meal w.e.f June 14, 2009 Circular 2 of 2009 to grant amnesty in revision of returns incases where discrepancy notices are issued – Amnesty ends on 31st july, 2009
  6. 6. SRO 603(I)/2009 AMENDMEND IN WITHHOLDING RULES Definition changed to include LTUs taxpayers and expand withholding agents scope All purchases by LTUs taxpayers from unregistered persons are effected Registered person are required to withhold tax from payments made at the applicable rates Tax so withheld is adjustable by registered persons subject to section 7, 8, 8b and 73 Legal Lacuna What about persons exempt from tax under any SRO or 6th schedule What about supplies that are exempt under SRO or 6th schedule What about application of section 7 that allows input only if invoice is available in present cases since the purchase is from unregistered who cannot issue invoice u/s 23 which virtually means input disallowance.