GOVERNMENT OF PAKISTAN

CENTRAL BOARD OF REVENUE

(REVENUE DIVISION)

(SALES TAX WING)

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C. No. 3(2)STP/99                                                                                         Islamabad, the 5^th December, 2003

SALES TAX GENERAL ORDER NO. 05/2003

Subject:-       DETERMINATION OF MINIMUM TAX LIABILITY.

                        Consequent upon the addition of section 11(5) in the Sales Tax Act, 1990, the Central Board of Revenue is pleased to specify the following conditions to determine minimum tax liability of a registered person who fails to file a return:

(i)         the minimum tax liability of the registered person shall not be less than the highest amount of tax paid by the registered person in any of the previous twelve months.

(ii)        In case tax paid in the previous twelve months is Nil, the minimum tax liability shall be calculated on the basis of monthly average of the sales declared by the registered person to the income tax department for the last assessment year.

(iii)        In case minimum tax liability cannot be determined in the manner given above, it shall be determined taking into account three or more of the following factors:

(a)               Location of business;

(b)               Type of business (i.e. retail etc);

(c)               Item produced / supplied or service provided;

(d)               No of persons employed;

(e)               Capital employed in the business;

(f)                 Amount of utility bills i.e. phones, electricity, gas and water;

(g)               Production capacity of machinery installed;

2.                     If the registered person pays the due amount of sales tax for the month alongwith additional tax and penalty under section 33(1) of the Sales Tax Act, 1990, within one month of the determination made as above, the notice of minimum tax liability determination will be considered to have been withdrawn. In case the registered person does not pay the amount of sales tax determined for the tax period, the tax liability determined will be recovered under section 48 of the Sales Tax Act, 1990 without issuance of Show Cause Notice.

3.                     Determination and / or payment of minimum tax liability for a tax period shall not be the final tax liability and the registered person shall be liable to discharge actual liability which may accrue or determined at a later stage through audit.

 ( Dr. Kamal Azhar Minhas )

Secretary (STP)