Other concepts of ST

Question 1

what is the time of supply for the different items as per Sales tax?

Answer 1

(1) Earlier of
(a) goods delivered
(b) made available
(c) Any payment is
received by the supplier

(2) Hire purchase: at the time agreement is entered into on full amount.

(3) Services: at the time when services are provided.

Question 2

what is the mechanism of chargeability of sales tax to the part payments?

Answer 2

Any part payment received for exempt supply, shall be accounted for in the return during which exemption is withdrawn.

To claim input on advance paid, buyer must have advance payment receipt which is to be issued by seller and will be treated as tax invoice. Moreover, sales tax is chargeable only on that advance payment
which is adjustable against sale. (not chargeable on security deposit).

Question 3

what is the time of supply in case of full advance was received in month when goods were exempt and then became taxable later on at the time of delivery of goods?

Answer 3

No ST shall be charged

Question 4

what is the condition for claiming input tax on advance payment

Answer 4

To claim input on advance paid, buyer must have advance payment receipt which is to be issued by seller and will be treated as tax invoice. Moreover, sales tax is chargeable only on that advance payment
which is adjustable against sale. (not chargeable on security deposit)

Question 5

what is the exception for the time of supply for goods made available?

Answer 5

In the case of a supply of sugar by a sugar mill to the Trading Corporation of Pakistan (TCP), if TCP does not remove the quantity of sugar
purchased from the mill premises and also does not make the payment of sales tax amount involved to sugar mill, the issuance of sales tax invoice by sugar mills may be deferred till the time of removal of sugar by TCP.
At the time of such removal or at the time of receipt of sales tax amount
involved whichever is earlier, the sugar mill shall issue the invoice for sales
tax and shall reflect the same in the return for the relevant tax period.

Question 6

what is the sequence for taxes in case of import by commercial importer?

Answer 6

1. Duties
2. FED
3. Sales tax
4. Income tax

Question 7

what are the possible values of supply for goods imported.

Answer 7

1. Values determined by customs act +FED
2. Value fixed by board (if actual value> value fixed by board then actual value.
3. value of 3rd schedule items however there are conditions.
   sales tax shall be at the retail price and it should be printed there is except ion to printing.

Question 9

what is sales tax on 3rd schedule item imported.

Answer 9

The sales tax shall be regular sales tax calculated on retail price rather than custom assessed value and there is no VAT (extra 3%) on such item.

Question 10

what is the penalty if importer or manufacturer fails to print the retail price on goods and what is the exception to this rule.

Answer 10

If a Person being a manufacturer/importer of an item subject to tax on retail price and fails to print the retail price, a
penalty of ten thousand rupees or five per cent of the amount of tax involved, whichever is higher will be charged.
Further, such goods shall also be liable to confiscation.
However, the adjudication
authority, after such
confiscation, may allow
redemption of such goods on payment of fine which shall not be less than twenty percent of
the total retail price of such goods. (Sec 32, S no. 26)

if the phrase “in retail
packing appears against any item/entry in 3rd schedule, the retail price taxation shall not apply If such items are not in
retail packing at the time of
import

if it is not possible to print the retail price at import, the import shall undertake to print the retail price after clearance of goods and shall pay sales tax on retail price which shall not be
less than 130% of the custom value increased by all duties and taxes. (Sales tax general order
no. 103/2019).

Question 11

what will be the sales tax on value of the supply for items imported in which it is specifically mentioned that it should be in retail packing.

Answer 11

then sales tax shall be charged on custom assessed value and value of supply shall be custom assessed value or board determined value.

Question 12

what is the value of supply in the case of other than import or export particularly in case of in-kind transaction, transaction between associates and general public on instalment inclusive of markup open market price?

Answer 12

a) Consideration in money which
supplier receives provided in
case consideration is:

(i) in kind or partly in kind and partly
in money, then FMV (E.g. Land
Rs. 2.5 M, Rs. 75,000 cash
whereas Mv of supply is 2.8. ST
will be on 2.8M)

(ii) between associates/difficult to
ascertain- Higher of open
market price or actual

(iii) General public on installment
inclusive of markup- Open
market price

Note: Markup shall also be excluded
from credit sale (General Order
3,2004)

Question 13

Taxation when the discount is given?

Answer 13

(b) Discounted price if invoice
shows price and discount as per
normal business practice.

Note 1: discount should not be
considered in the following cases.

(i) case of early payment discount
(ii) Third Schedule item
(iii) If the discount allowed is in excess
of the industry norm, then it will be
allowed up to industry average
only.

Question 14

what if a non register person gives discount to the registered person?

Answer 14

(iv) A non-register person cannot
issue tax invoice, therefore, any
discount given should not be
considered for withholding tax
calculation @ 5% (5/118) on
value.

Question 15

what the value of supply will be when the subsidy is provided to a person?

Answer 15

Any subsidy provided by
any person shall not be deducted
from sale price while calculating
value of supply except in case of
subsidy provided by Government
to electricity /natural gas including
RLNG consumers.

Question 16

what is the value of supply in case 3rd schedule items?

Answer 16

Third Sch items- Retail price. (In
case of more than one price for
a particular brand, highest price will be retail price).
Note: Retail price mechanism also
applicable on imported 3rd sch item.

Question 17

what is the value of supply in case of toll manufacturing?

Answer 17

Toll manufacturing- Actual
consideration received by the
manufacturer for the value
addition carried out in relation to
such goods (Conversion
charges)

Question 17

Does the capacity payments are included in the value of supply?

Answer 17

No, Electricity supplied by
independent power producers
(IPPs) or WAPDA- value of
supply is amount received on
account of energy purchase
price only. Any other amount
received on account of capacity
purchase price, bonus,
supplementary charges, energy
price premium, Late payment
surcharge shall not be included
in value.

Question 18

what is taxation in case of sale of used vehicles

Answer 18

See Notes

Question 19

what are the exceptions to the sales tax withholding

Answer 19

ales tax will be withheld except in case of
following:

(a) Goods specified in 3rd Schedule and goods on which federal excise duty is payable in sales tax mode on the basis of retail price.

(b) Supplies made by commercial importer who paid value addition tax on such goods at the time of import.

(c) electrical energy, natural gas, vegetable ghee and cooking oil, petroleum products by OMC, telecommunication services.

(d) Supply of sand, stone, crush and clay to low-cost housing schemes sponsored or approved by Naya Pakistan Housing and development Authority
Note: Sales tax withholding is to be made in the
month of purchase regardless of pending payment.