AIRLINK 65.20 Decreased By ▼ -0.70 (-1.06%)
BOP 5.57 Decreased By ▼ -0.12 (-2.11%)
CNERGY 4.56 Decreased By ▼ -0.09 (-1.94%)
DFML 24.52 Increased By ▲ 1.67 (7.31%)
DGKC 69.96 Decreased By ▼ -0.74 (-1.05%)
FCCL 20.30 Decreased By ▼ -0.05 (-0.25%)
FFBL 29.11 No Change ▼ 0.00 (0%)
FFL 9.83 Decreased By ▼ -0.10 (-1.01%)
GGL 10.01 Decreased By ▼ -0.07 (-0.69%)
HBL 114.25 Decreased By ▼ -1.00 (-0.87%)
HUBC 129.10 Decreased By ▼ -0.40 (-0.31%)
HUMNL 6.71 Increased By ▲ 0.01 (0.15%)
KEL 4.44 Increased By ▲ 0.06 (1.37%)
KOSM 4.89 Decreased By ▼ -0.13 (-2.59%)
MLCF 37.00 Increased By ▲ 0.04 (0.11%)
OGDC 132.30 Increased By ▲ 1.10 (0.84%)
PAEL 22.54 Increased By ▲ 0.06 (0.27%)
PIAA 25.89 Decreased By ▼ -0.41 (-1.56%)
PIBTL 6.60 Increased By ▲ 0.07 (1.07%)
PPL 112.85 Increased By ▲ 0.73 (0.65%)
PRL 29.41 Increased By ▲ 1.02 (3.59%)
PTC 15.24 Decreased By ▼ -0.87 (-5.4%)
SEARL 57.03 Decreased By ▼ -1.26 (-2.16%)
SNGP 66.45 Increased By ▲ 0.76 (1.16%)
SSGC 10.98 Decreased By ▼ -0.04 (-0.36%)
TELE 8.80 Decreased By ▼ -0.14 (-1.57%)
TPLP 11.70 Increased By ▲ 0.17 (1.47%)
TRG 68.62 Decreased By ▼ -0.62 (-0.9%)
UNITY 23.40 Decreased By ▼ -0.55 (-2.3%)
WTL 1.38 Increased By ▲ 0.03 (2.22%)
BR100 7,291 Decreased By -12.5 (-0.17%)
BR30 23,955 Increased By 4.8 (0.02%)
KSE100 70,290 Decreased By -43.8 (-0.06%)
KSE30 23,093 Decreased By -27.8 (-0.12%)

LAHORE: The Sales Tax Act does not stipulate any condition or restriction of time for adjustment of the input tax from the output tax payable in respect of taxable supplies made in a tax period, sources said.

They have pointed out that the stipulation of time in a tax period is with regard to determining the tax liability of the output tax on taxable supplies made by the taxpayer during that period and does not relate to the period of payment of input tax on the taxable supplies received by him.

Sources said the Sales Tax Act introduces an indirect tax to be levied, charged and collected on imported goods or on taxable supplies of goods, and the same is collected by the supplier on behalf of the government, while the incidence of the tax is finally borne by the consumer of the imported goods or of the taxable supplies of the goods.

The Sales Tax Act lays down the foundational parameters of the sales tax, which are: firstly, the quantum of the tax is based on the value of the goods imported into Pakistan or the taxable supplies made in Pakistan by a registered person; secondly, the incidence of the tax is triggered or made chargeable when the goods are imported into Pakistan or when the registered person makes taxable supplies in the course or furtherance of any taxable activity carried out by him; and finally, the liability to pay the tax is on the person importing the goods in respect of the imported goods, or on the person making the supplies in respect of taxable supplies made in Pakistan.

According to them, in order to cater for and facilitate the value addition of goods made during the supply chain of production, and to ease the burden of tax on the supplier, the legislature has introduced in the Sales Tax Act, the concept of ‘input tax’ and ‘output tax’, and then provided for the adjustment of the former at the time of paying the latter, ‘Input tax’ being the tax paid by the person receiving the supply of goods, while ‘output tax’ being the tax payable at the time of making the supply of the value added goods.

To facilitate the supplier, the legislature has provided a facility for the adjustment of the ‘input tax’ from the ‘output tax’ payable at the time of making the supply of the value-added goods, thus, the ‘input tax’ paid by one supplier on receiving the goods would be the ‘output tax’ of the other, who is supplying the said goods, and the supplier on receiving the price of the goods supplied would after deducting the already paid ‘input tax’ from the ‘output tax’, deposit the balance in the treasury. This process would continue at each successive stage of the supply chain, until the final goods is purchased by the final consumer, who would be finally burdened with the entire incidence of sales tax.

Copyright Business Recorder, 2024


Comments are closed.