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Sales tax at the rate of 2 percent has been proposed on supplies to unregistered person in recently announced Finance Bill however its application on retail price items is questioned by legal experts. According to details Arshad Shehzad, Advocate High Court has explained in order to increase the cost of business of unregistered person further tax @ 2 percent is proposed on supplies to unregistered person.
However, question arises that in case of sales tax recovered on retail price since the sales tax is already been recovered on maximum price ie end consumer price there remain no need or logic to collect/charge further 2% tax. The measure being an inflationary affects has already comes under serious criticism.
The newly inserted provision 3(1A) is proposed in addition to sales tax rate prescribed under section 3(1),(1B),(2),(5) and (6), whereas 3(2) deals with sales tax on retail price. Thus the plan reading the law suggesting further tax is made applicable on items falling in the ambit of retail price as well.
Arshad Shehzad informed further tax was discontinue in 2004 and at that point of time certain clear cut exclusion such as supplies by retailers, supplies of utilities, petroleum product etc were clearly provided in the Sales Tax Act, however this time the board though has sought power for issuance notification to exclude any person or class of person, but no notification for exclusion was yet issued. He opined that since the application of this section was sought with immediate effect, the exclusion notification, if any, required to be issued simultaneously to remove any ambiguity and to avoid uncertainty. The same was unfortunately not done, he concluded.

Copyright Business Recorder, 2013

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