GOVERNMENT OF PAKISTAN

REVENUE DIVISION

CENTRAL BOARD OF REVENUE

(Sales Tax Wing)

*****

C.No. 3(22)STP/98.

Islamabad, the 11th April, 2000.

SALES TAX GENERAL ORDER NO. 02 OF 2000

Subject:        LEVY OF FURTHER TAX UNDER SECTION 3(1a) OF THE SALES TAX ACT, 1990

Ever since the levy of further tax under section 3(1A) of the Sales Tax Act, 1990, persons making supplies of goods exempt from sales tax under section 13(1) read with the Sixth Schedule have started taking voluntary registrations as provided under section 13(4) read with section 18(1) of the Act. Section 13(4) envisages voluntary registration if a person does not desire to avail any tax exemption while section 18(1) provides for voluntary registration of such a person who makes or intends to make taxable supplies but is not required to be registered under the Sales Tax Act, 1990. Keeping in view the different grounds for voluntary registration mentioned in section 13(4) and section 18(1), the following questions were raised and sent to the Law & Justice Division for an advice:

(i)     whether or not a person making supply of goods exempt under section 13(1) is entitled to voluntary registration under section 18(1);

(ii)    whether or not on such voluntary registration, a person has to fulfill all duties and responsibilities as assigned to a registered person under the Act (e.g. issuing tax invoice and filing of monthly return) and also to avail of the benefits (e.g. non-payment of further tax etc.) as are available to a registered person under the Act; and

(iii)    whether or not on such voluntary registration, his supplies (even if otherwise exempt under sub-section (1) of section 13) become liable to sales tax and the exemption stands negated.

2.     On the basis of advice received from the Law & Justice Division, the following answers to the above questions have been ascertained :-

(i)     A person making supplies of goods exempt under section 13(1) is entitled to voluntary registration under section 18(1) as provided under section 13(4);

(ii)    All rights, duties, liabi9lities, responsibilities and benefits of a "registered person" including the provisions of section 8, shall accrue to such a voluntarily registered person; and

(iii)    Supplies of such voluntarily registered person even if otherwise exempt under section 13(1) will become liable to sales tax as is clear from the plain reading of sub-section (4) of section 13.

3.     All the field formations of sales tax may take further necessary action accordingly and ensure that all such voluntarily registered persons pay sales tax due on their supplies otherwise exempt under section 13(1) read with the Sixth Schedule to the Sales Tax Act, 1990.

(IFTIKHAR QUTAB)

Secretary (STP)   

Phone No. 9209874