SALES TAX GENERAL ORDER NO. 06 OF 1995

DATED 1ST JUNE, 1995

SUBJECT:           CLARIFICATION REGARDING TIME OF SUPPLY.

             According to the definition of “time of supply” given in sub-section (30) of section (2) of Sales Tax Act, 1990, the supply is deemed to take place at the earlier of the time of the delivery of goods or the time when any payment is received by supplier in respect of that supply. It means, sales tax is chargeable if the amount is received in advance. The concept is clear. However, problems arise when full payment is not received and only some percentage of the actual amount is received in advance. Similarly, in certain other situations, supplies are made in parts over a period of time. Thus, a supply can spread over a period of several moths.

2.         It is clarified that sales tax for a tax period should be charged only o that portion of money which received or only on that portion of supply which is made during that tax period and not an the whole of amount which is to be received in due course or on the whole of the supply which has to yet be completed.

(AHAD NAWAZ)

SECRETARY (STP)