Before Registration and Filing of your Sales Tax Return, it is recommended that one should establish basic understanding regarding these processes. Knowledge of basic concepts would not only ensure that the tasks are performed easily but also in the prescribed manner.

Sales Tax is a tax levied by the Federal Government under the Sales Tax Act, 1990, on sale and supply of goods and on the goods imported into Pakistan. Sales Tax on services is levied by the Federal Government under Azad Jammu and Kashmir Sales Tax (Tax on services) Act, 2001.

INPUT TAX

Input tax is the tax paid by registered person on the taxable goods and services purchased or acquired by him. This also includes the sales tax paid on imports.

OUTPUT TAX

It is the sales tax charged and levied on the sale or supply of goods or services on which sales tax is leviable.

SCOPE OF SALES TAX

Sales tax applies to the following:

GOODS

All goods are taxable except those that have been exempted under section 13 as mentioned under 6th Schedule of the Sales Tax Act, 1990. For sales tax purposes goods include every kind of movable property other than actionable claims, money, stocks, shares and securities.

IMPORTS INTO PAKISTAN

All goods imported into Pakistan are liable to sales tax at the time of import, except goods specifically exempted under section 13 as mentioned in Sixth Schedule to the Act.

EXEMPT GOODS

Under section 13 of The Sales Tax Act 1990, the Sixth Schedule of the Sales Tax Act, 1990 specifically and explicitly mentions those goods on which exemption of sales tax is available. Other exemptions are available through various notifications (SROs) issued by the Government under section 13.