The Federal Board of Revenue (FBR) has excluded manufacturers-cum-retailers from special procedure pertaining to the payment of sales tax on reduced rates by retail sector. Now, all manufactures who were directly retailing their goods or selling their goods to the end consumers would operate under the normal tax regime. The FBR has amended the Sales Tax Special Procedure Rules 2007 through SRO 1(I)/2011 issued here on Saturday.
According to sources, the Special Procedure for Payment of Sales Tax by Retailers would not be applicable to manufacturers-cum-retailers who sell their products through retail outlets. There are manufacturers, who are also engaged in the activity of selling through their retail outlets. In such cases, they would not be eligible to pay sales tax at reduced rates of the Special Procedure for Payment of Sales Tax by Retailers.
So far, the special procedure for retailers was not applicable to dealers of motorcycles and specified electric goods who shall pay sales tax as prescribed under the rules. The special procedure for retailers would also not be applicable on the said manufacturers-cum-retailers.
Following is the text of the notification issued on Saturday: 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, sub-section 2 of section 6, sections 7 and 7A, clause (b) of sub-section (1) of section 8, clause 9a) of sub-section (2) of section 13, sub-sections (2A) and (3) of section 22, section 23 and 60 thereof, the Federal Government is pleased to direct that in the Sales Tax Special Procedure Rules 2007 in rule 3, in the proviso after the words "respectively" the following words and comma shall be inserted, namely:- "and shall not be applicable to manufacturers-cum-retailers who sell their products through retail outlets".