S. Tax (Registration - Rate - Value)

Question 1

Commercial Importer

Manufacturer

Answer 1

Must
Must
Note: A person liable to be registered but not actually registered shall not be entitled to any benefit available to a registered person under any of the provisions (input not allowable in respect of unregistered period)

Question 2

Manufacturer/Dealer/Distributor/Wholesaler/Retailer

Answer 2

(1) Manufacturer: Only if not a cottage industry (Last 12M: Sales > 10M, Utility bills (electricity, gas, telephone > 0.8M)
(2) Wholesaler, dealer, distributor: Every person
(3) Retailer: Mandatory for retailers mentioned in section 2(43A)- Tier-1 retailers (i.e international chain of store, retailer having debit/credit card machine,operating in air conditioning mall or plaza, whose cumulative electricity bill during last 12M is 600,000 and wholesale-cum-retailer). Rest are not required to be registered and they pay final sales tax through electricity bill.
(4) Exporter: who intends to obtain refund on zero rated supplies.

Question 3

Import
Local

Answer 3

(i) Tax rate will be on the date on which goods declaration is presented.
(ii) If goods declaration presented in advance then on date on which manifest of conveyance is delivered.
(iii) If tax not paid within 7 days of goods declaration, then rate on the date of payment will be used.
(iv) Tax rate will be used as is applicable at the time of supply.

Question 4

On what value ST to be applied

Answer 4

(a) Value determined under the customs act including custom duty + FED
Note: Sequence should be striclty followed. First add all duties, then FED, then Sales tax and lastly Income tax.
(b) Value fix by board. If actual value of goods imported is greater than value fixed, actual value will be value of supply.

Question 5

Considerations

Answer 5

(a) Consideration in money which supplier receives provided in case consideration is:
(i) in kind and 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- Higer 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)
(b) Discounted price if invoice shows price and discount as per normal business practice.
Note: discount should not be considered in case of early payment discount and Third sch items. Further, a non register person cannot issue tax invoice and hence any discount given should not be considered for calculating withholding tax @ 1% on value of supply.
(c) Third Sch items- Retail price
(d) reasons to believe that value is under declared then value determined by the valuation committee consisting of FBR and trade association.
(e) Toll manufacturing-Conversion charges, however if exempt goods are supplied to registered person for processing then sales tax will be charged on market price.
(f) value fix by board (imported or supplies). If actual value is greater than value fixed, actual value will be value of supply.