GOVERNMENT OF PAKISTAN
REVENUE DIVISION
CENTRAL BOARD OF REVENUE
(SALES TAX & FEDERAL EXCISE WING)
*****
Islamabad, the 1st September, 2005
SALES TAX GENERAL ORDER NO. 03 OF 2005
Subject : - REPAYMENT OF SALES TAX TO DUTY FREE SHOPS ON LOCALLY MANUFACTURED GOODS.
Under serial No. 3 of the Fifth Schedule to the Sales Tax Act, 1990 read with the main para (U) of PART V of the Sales Tax General Order No. 3 of 2004, dated 12th June, 2004, supplies made to duty free shops are entitled to the facility of zero-rating subject to the fulfillment of conditions laid down therein. These shops have reported to the Board that there are several manufacturers who, for some peculiar business reasons, do not sell their products to duty free shops on zero-rate basis with the result that these shops cannot meet their diversified inventorial requirements and eventually their sale business suffers. In view of the fact that their duty free sales under different duty free baggage concessions cannot be subjected to the incidence of sales tax, these shops have requested the Board for repayment of sales tax paid by them on the goods sold free of customs duty under the baggage rules.
2. Board has examined the request of duty free shops and is pleased to clarify that the principal purpose of entry at serial No. 3 of the Fifth Schedule is not to charge sales tax at any stage of the supply of goods sold by duty free shops free of customs duty under different baggage rules. Hence if these shops have paid any amount of sales tax on the purchase of such goods from the manufacturers, they are entitled to claim and take repayment (refund) of the same provided these goods have been sold free of customs duty under the relevant baggage concessions.
3. In order however, to streamline such sales tax refund payments to duty free shops, Board is pleased to prescribe the following procedure:-
(i) Refund shall be claimed and allowed only in respect of such goods as have been sold by duty free shops under different baggage rules free of customs duty.
(ii) Duty free shops shall as usual file the prescribed monthly sales tax return showing the relevant tax paid purchases and the refundable amount of tax in the relevant columns of the return.
(iii) In order to obtain refund payment, duty free shops shall produce to the concerned Collector of Sales Tax, original sales tax invoices with a set of photocopies thereof and a statement in the following format, namely:-
|
S.No. |
Name of the Manufacturer |
Sales Tax Invoice No. & Date |
Description of Goods |
Quantity Purchased |
Quantity Sold |
Name and passport No. with date of issue of the passenger to whom sold |
Remarks |
|
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
(iv) The above statement shall be furnished on electronic media as well as in hard form duly attested by the Customs staff posted in the concerned duty free shop.
(v) The purchase invoices once furnished shall not be required to be submitted again in case goods covered therein are sold and refund thereon is claimed in piecemeal in different tax periods.
(vi) The original sales tax invoices shall be returned to these shops after all the relevant goods covered therein have been sold and the amount of sales tax involved therein has been refunded as admissible and each of such invoice shall be returned after making endorsement of an official certificate ‘fully used for sales tax refund’ by the concerned officer of sales tax.
(vii) Duty free shops shall observe all the foreign exchange regulations applicable on their trading business.
4. The admissible refund under this order shall be paid within fifteen days of the filing the said statement.
5. The concerned Collectorates of Sales Tax shall properly maintain both computerized and manual records of all refunds claimed by and paid to duty free shops under this order.
(Ahmad Reza Khan)
Secretary (ST&FE-L&P)