GOVERNMENT OF PAKISTAN
 CENTRAL BOARD OF REVENUE 
***

Islamabad, the 14th September, 1999

NOTIFICATION
(SALES TAX)

            S.R.O. 1039(I)/99.-     In exercise of the powers conferred by section 71 of the Sales Tax Act, 1990, the Federal Government is pleased to make the following rules, namely:--

1. Short title, application and commencement.--

           (1)    These rules may be called the Special Procedure for Supply of Food Rules,1999.

           (2)    These rules shall apply for collection and payment of sales tax on foods, drinks, and other eatables

                   supplied by hotels, restaurants, clubs, caterers, parlours, kitchens and other such similar

                   establishments, whether for consumption inside the premises of such establishments or for supply 

                   for outside consumption or use.

           (3)    They shall come into force at once.

           (1)    In these Rules, unless there is anything repugnant in the subject or context, --

                   a.     "Act" means the Sales Tax Act, 1990;

                   b.    "caterer" means a person or establishment, by whatever name called, which in ordinary course of

                          business supplies foods, drinks and other eatables in any mode or manner or on any occasions,

                          whether or not it provides entertainment or supplies furniture or crockery and cutlery, or

                          ornamental or decorative accessories or lighting for illumination, on hire, lease or for any other

                          consideration;

 

                   c.    "club" means an establishment, organization or place, other than a hotel or restaurant, the

                          membership of which is restricted to a particular class of people or which is run on the basis of

                          mutuality and supplies foods, drinks or other eatables, whether or not it has any arrangement for

                          boarding, lodging or games;

 

                   d.    "Daily Gross Take (DGT)" means the total value of supply received during each day and includes

                          the amount of tax;

 

                   e.    "Fiscal Electronic Cash Register (FECR)" means an electronic cash register with fiscal memory

                          (black box), fiscal screw and seal and capability to simultaneously print second copy (record

                          copy) containing all information in addition to that on the first paper roll (customer copy) and

                          having two displays, one for operator and the other for customer;

 

                   f.    "food" includes baked, cooked, prepared or fresh food, ice-cream, beverages or drinks, whether

                          alcoholic or otherwise, and other eatables, whether prepared by the person supplying the same or

                          otherwise procured from others;

 

                   g.    "hotel" means an establishment, organization or place where rooms, suites of rooms, or hall or

                          any other such premises are let out on rent, and it also supplies food;

 

                   h.    "kitchen" includes a flight kitchen and means an establishment, organization or place where food

                          is prepared and supplied on board any aircraft, ship, bus, wagon, railway train or any other means

                          of transportation irrespective of the fact whether the kitchen is owned by the person operating the

                          conveyance or not;

 

                    i.    "person" includes a caterer, hotel , restaurant, club, parlour, kitchen, kiosk or such other

                          establishment or organization making supplies of food; and

 

                    j.    "restaurant" means an establishment, organization or place, by whatever name called, supplying

                          food consumed in that premises or catered outside or supplied as take-aways, whether or not it

                          provides any other services, facilities or utilities and includes a club, marriage hall or

                          establishment meant for holding ceremonies where food is supplied on such ceremonies.

 

           (2)    All other words and expressions used, but not defined herein shall have the meanings assigned to

                   them in the Act.

           (1)   Every person supplying food, in or from the premises of clubs, caterers, kitchens, hotels or restaurants

                  shall be liable to charge and pay sales tax at the rate specified in sub-section (1) of section 3 of the

                  Act irrespective of the fact whether food is consumed in that premise or supplied or catered outside or

                  supplied as take-aways.

 

           (2)   The taxable supplies made by the said person shall not be subjected to the further tax leviable under

                  sub-section (1A) of section 3 of the Act.

 

           (3)   Every such person, whose total annual turnover exceeds rupees two and a half million during the last

                  twelve months, shall be liable to registration and shall get himself registered under the Act, if not

                  already registered.

 (4)   The sales tax on food served in a tax period shall be calculated in accordance with the following

        formula, namely:-

                            Amount of              Total value of supply due from                 Rate of

                            sales tax     =         consumer or recipient of food         X       sales tax

                                                              100 + rate of sales tax

 

           (5)   Every person shall submit the monthly return as prescribed in the Act. The tax due alongwith monthly

                  return shall be deposited in the Government Treasury under the relevant head "0220000-Sales Tax" by

                  the 15th day of the month following the month in which supplies were made:

 

                        Provided that in respect of supplies made by clubs, the date shall be 15th day of the second moth

                        following the month in which supplies were made by the club.

 

           (6)   If the supplies are made free of charge or for some other consideration or a consideration which is 

                  lower than the listed prices, the sales tax shall be charged as if it were supplied at the price listed in

                  the menu card in terms of sub-clause (a) of clause (46) of section 2 of the Act.

 

           (7)   Such person shall be entitled for input tax credit for the tax paid on his purchases or utilities consumed

                  for preparation or supply of food against output tax payable subject to the limitations and restrictions

                  imposed under section 8 of the Act or the notifications issued thereunder; Provided that the input tax

                  credit shall only be admissible for amount of tax which was paid on the purchases made during that tax

                  period for which return is being submitted.

 

           (8)   Where the said person is engaged in making taxable supplies as well as exempt supplies, the input tax

                  credit shall be allowed as per the Apportionment of Input Tax Rules, 1996.

           (1)   Every person shall print, in his menu card or list of food items to be supplied, the price of each item or

                  combination of food, as the case may be, intended to be supplied or sold by him which shall include

                  price of the food and all duties and indirect taxes, local Provincial and Federal, including also the sales 

                  tax. The recipient or consumer of food shall be invoiced or billed to pay only the price shown in the

                  menu card or the price list.

 

           (2)   The food supplied by flight-kitchens to the conveyances leaving for a destination outside Pakistan shall

                  be zero-rated in accordance with clause (b) of section 4 of the Act. The Collector of Sales Tax, may

                  through a general or a special order, prescribe special procedure for issuance of invoice or bills by flight

                  kitchens whether for consumption on domestic flights or for foreign bound flights.

 

           (3)   The registered persons shall issue a serially numbered Sales Tax Invoice or bill starting with 0001 on

                  first day of every financial year or commencement of business, in the format given in Annex-I to these

                  rules. The persons using in their business a Fiscal Electronic Cash Register (F.E.C.R) or a

                  computerized accounting system may, with prior permission of the Collector, issue the fiscal

                  ECR-generated or the computer-generated sales tax invoice and computerized Cash Memo in the

                  format and manner so  approved by the respective Collector of Sales Tax.

 

           (4)   The persons opting for generation and issuance of Sales Tax Invoices or bills on Fiscal E.C.R. or a

                  computer shall retain their record electronically as required under sub-section (3) of section 22 of the

                  Sales Tax Act, 1990.

 

           (5)   At the end of each business day the hotel, restaurant, club, caterer, kitchen, parlour or any other

                  person registered under these rules shall keep a record of their Daily Gross Take (DGT) showing, 

                  where applicable, any zero-rated or exempt supplies separately.

           (7)   The registered person shall start issuing sales tax invoices or bills and using printed menu cards in

                  accordance with these rules from the 1^st October, 1999. For the period to the 1^st October, 1999,

                  the existing prevalent system shall be accepted.

           (8)   The amount of sales tax payable by the registered person shall be calculated as under: --

                                                                EXAMPLE

                  If the price of any food item printed in the menu card or the price list is Rs.1000/- then,

                  (i)    Amount of sales                    1000 x 15*

                         tax payable             =             100 + 15*                     =            Rs.130.43

 

                  (ii)   Amount of                           Total amount due -                          Amount of

                         Provincial or local              Amount of Sales Tax          X             Provincial or local duty

                         duty, applicable,      =        100 + rate of Provincial                    

                         say @ 10%                        or local duty    

                              

                                                                  1000-130.43 x 10              =            79.05

                                                                          110

 

                  (iii)  Price to be retained     =         Total Price                      __        Amount of Sales Tax

                        by the supplier                       received                                      and Amount of

                                                                                                                      Provincial or local duty.

                                                             1000 – (130.43 + 79.05) = 790.52

Sales Tax Registered No._______________                                     CTI No., if any __________________

    M/s. NAME & ADDRESS OF SUPPLIER OF FOOD

----------------------------------------------------------------------------------------

Book No.__________________________                                         Invoice No. _________

Table/Room No.____________________         Date___________       Time    _________

* Rate of sales tax in per cent terms.

TOTAL:_____________

Signature of authorised person

NB: This invoice / bill includes amount of sales tax.