The Federal Board of Revenue has allowed the retailers including jewellers, who have paid due amount of sales tax under 'special procedure for payment of sales tax by retailers' during the year 2007-08, to continue to operate under these rules till further orders. The FBR on Tuesday amended the 'special procedure for payment of sales tax by retailers' through a notification issued here on Tuesday.
The FBR has abolished the specific time period of two years for the retailers for operating under the 'special procedure for payment of sales tax by retailers'. Now retailers can make payment of sales tax on special sales tax rates on the basis of quarterly turnover as specified in the rules till further orders.
According to the rules, the provisions of rules shall apply to the registered persons, including jewellers, who make supplies from retail outlets to final consumers and such persons shall be deemed to be retailers in respect of such supplies. A retailer operating under these rules shall charge and collect sales tax at the specified rate against turnover.
The turnover as aforesaid shall constitute value of all supplies of a retailer, including supplies of goods otherwise exempt and zero-rated and those specified in the Third Schedule of the Act. In case the supplies are made to a person who deducts income tax at source under the Income Tax Ordinance, 2001 from a retail outlet, such supplies shall not be subjected to tax but at a rate under section 3 of the Act and the supplier shall be entitled to deduction of input tax paid on purchase of the goods so supplied.
While determining his turnover, a jeweller shall be entitled to exclude the value of gold or silver used in the jewellery supplied, provided that such assessable value for turnover is not less than ten per cent of the actual sale price excluding the amount of tax. The retailers who have paid due amount of sales tax under this Chapter during the year 2007-08 shall continue to operate under this Chapter till further orders.
Following is the text of the notification issued on Tuesday: S.R.O.862(I)/2010. In exercise of the powers conferred by section 71 of the Sales Tax Act, 1990, read with clauses (9) and (46) of section 2, sections 3 and 4, subsection (2) of section 6, section 7, section 7A, clause (b) of sub-section (1) of section 8, clause (a) of sub-section (2) of section 13, sub-sections (2A) and (3) of section 22, sections 23 and 60 thereof, the Federal Government is pleased to direct that the following further amendment shall be made in the Sales Tax Special Procedures Rules, namely: In the aforesaid Rules, in rule 5, in sub-rule (6), for the words, "for the next two years", the words, "till further orders" shall be substituted. This notification shall take effect from the 1st July 2010.