GOVERNMENT OF PAKISTAN
MINISTRY OF FINANCE, ECONOMIC AFFAIRS,
STATISTICS AND REVENUE
(REVENUE DIVISION)
*********
Islamabad, the 9th August, 2004
 NOTIFICATION
(SALES TAX)

             S.R.O. 673 (I)/2004.– In exercise of the powers conferred by section 71 of the Sales Tax Act, 1990, read with clause (9) of section 2, section 3, 3AA and 4, sub-section (2) of section 6, section 7A, clause (b) of sub-section (1) of section 8, clause (a) of sub-section (2) of section 13, section 26AA and 34A, and the first and second provisos to section 45 thereof, the Federal Government is pleased to direct that following further amendments shall be made in the Sales Tax Special Procedure Rules, 2004, namely:-

In the aforesaid rules, –

(a) in rule 16, in sub-rule (1), for clause (e), the following shall be substituted, namely:-

 “(e) ‘value addition’ means the value added by the retailer on the value for which the goods are acquired
(purchased) by him and calculated in the manner specified in Rule 19.

 Explanation: For a particular tax period the value for which the goods are acquired shall be the sum of the values indicated in all the invoices, bills, vouchers, cash payment slips and cash memos against which the goods are purchased by a retailer in a tax period.”;

                         (b)            for rule 19, the following shall be substituted, namely:-

19. Determination of sales tax liability.– A retailer shall pay retail tax on his monthly value addition, at the rate specified under sub-section (1) of section 3 of the Act.

Provided that the value addition, in percentage terms, shall not be less than ten per cent of the total value of purchases made during the said period.

                        EXAMPLE:
(a) value of purchases Rs. 100
(b) value addition rate 10%
(c) value addition (a x b) 100 X 10% = 10.00
(d) retail tax on value addition 10 X 15% =   1.50
            Tax Liability                                              Rs 1.50.”;

                          (c)            for rule 20, the following shall be substituted, namely:-

“20. Record keeping and invoicing.–– A retailer shall issue cash memo for each supply in the form as set out in Annex ‘B’ and shall maintain record of purchases indicating description, quantity and value of goods purchased both excluding sales tax and value inclusive of sales tax, separately and the name and address of the seller.”; and

    (d)     in rule 21, in sub-rule (2) for the word “sales” occurring twice, the word “purchases” shall be substituted; and

    (e)     after rule 21, for "Annex-A" the following shall be substituted, namely:―.