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Message from Editor-in-Chief
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General
sales tax relief not admissible on some military vehicles
ISLAMABAD (November 25 2002) :
The Central Board of Revenue (CBR) has conveyed to the authorities engaged
in defence purchases that the exemption of general sales tax (GST) would not
be available for certain types of vehicles assembled or manufactured by the
local industry for the armed forces.
GST at the rate of 15 percent would be chargeable on the supply of fire
fighting vehicles, pick-ups, delivery vans, removal vans, browsers, etc.
In its legal interpretation to the Controller of Military Accounts
Rawalpindi, the CBR has held that under serial No. 29 of the Sixth Schedule
of the Sales Tax Act, 1990, inter alia, trucks assembled or manufactured
locally for supply to armed forces are exempt from sales tax.
Although no specific PCT heading has been mentioned in column (3) against
the said serial number, yet it has been clarified that only trucks falling
under PCT heading 87.04 are covered under serial No. 29 of the said
Schedule. Vehicles like pick-ups, delivery vans, removal vans, browsers,
fire fighting vehicles, etc are not entitled to the said exemption.
As regards the fabrication of superstructures on truck chassis through third
party procured from local assemblers, exemption of sales tax remains
admissible provided the description and classification do not change. If
description of classification changes, exemption of sales tax remains no
more admissible. Thus, the manufacturers fabricating super structures on
truck chassis converting them into vehicles of different description or
classification are liable to charge and pay sales tax on the total value of
such vehicles.
Clarifying payment of sales tax against tax invoices, the CBR said that
sales tax invoice issued by a registered person is sufficient proof in case
of established and recognised suppliers. However, in case of new suppliers,
a copy of the sales tax registration certificate and latest sales tax return
may be demanded. In doubtful cases, the documents may be referred to the
collector of sales tax having jurisdiction over the registered person
(supplier) for verification.
In order to ensure that the due sales tax is paid to the government as due
under the law, the concerned authorities should submit information about the
supplies paid for the period of last three years and such information may be
furnished in future on monthly basis as well, the CBR added
Source:
Business Recorder
(http://www.brecorder.com)
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