S. Tax (Determination of Tax Liability)

Question 1

Liability to pay

Answer 1

Imported goods- Person importing goods irrespective of their final destinatio in territories of Pakistan. (Tariff or non-tariff)
Supply of goods- person making the supply

Question 2

Formula

Manufacturer, Dealer, Distributor, Wholesaler (Other than specified goods)

Registered retailers

Non-registered retailers

Answer 2

Manufacturer, Dealer, Distributor, Wholesaler (Other than specified goods)
Output - Input
Retailers:
(a) Registered retailers (Other than specified goods) (i) will pay tax in normal manner other than vehicle dealers and retailers selling specified goods (tyres, tubes, tiles etc). Vehicle dealers and specified goods retailers shall pay tax as per special procedure rules for vehicle dealers and specified goods.
(ii) Registered retailers also have the option to pay sales tax @ 2% of their turnover (including exempt supply) without any input tax adjustment.option to be filed by 15th July 2017 and remain in force for whole financial year.
(iii) Retailers of five sectors shall pay sales tax @ 5% on supply of finished fabric and locally manufactured finished articles.
(iv) A jeweller shall exclude value of gold or silver used in jewellery provided such value is not less than ten percent of actual sale price excluding amount of tax.
(b) Non-registered retailers
Electricity bill upto Rs.20,000pm-5%, Electricity bill > 20,000- 7.5%
Note: Unregistered retailer will pay normal sales tax of 17%, further tax @ 2%, 5% extra tax u/s 3(5) and 5/7.5% on their bills (Total 29/30.5% tax on electricity)

Question 3

Restriction of adjustment upto 90% of output

Answer 3

Not applicable:
(a) fertilizer manufacter,Oil & Marketing co, Persons registered in electrical energy sector and gas distribution companies, telecommunication
(b) distributors and wholesale-cum-retailers (excluding wholesalers)
(c) person making zero rated supplies provided value of supplies exceed 50% of all taxable supplies. (90% not applicable on whole entity)
(d) Commercial importers provided value of imports subject to 3% value addition tax exceeds 50% of value of all taxable purchases in a tax period.
(e) Supplies charged to reduced rate under SRO 1125 (Garments, sports, surgical)
Note: Full input claimable on purchase of fixed assets. 90% rule not applicable.