Sales tax period is a period of one month as specify in the sales tax act. The Federal government of Pakistan may notify some other period as tax period through notification in the official Gazette.
Input tax is the tax levied under Sales Tax Act, 1990 on the supply of goods to a person i.e. sales tax on purchases of goods . It also includes sales tax levied on import of goods by the person meaning every time a person import any plant, machinery or simple goods into Pakistan he would be charges sales tax on it at the time of clearance from custom authorities.
Third as Sales Tax Act, 1990 describes. ”in relation to goods or services acquired by the person, tax (Excise duty) levied under the Federal Excise Act, 2005 in the sales tax mode as a duty of excise on the manufacture or production of the goods, or the rendering or providing of the services.
Further any provincial sales tax levied on services rendered or provided to the person and tax levied under the Sales Tax Act, 1990 as adapted in the state of Azad Jammu and Kashmir on the supply of goods received by the person.
Summarizing above, input tax is part of;
- Purchases of (taxable) goods or services received.
- Import of goods.
- Fedral Excise Duty (FED) in sales tax mode on goods acquired or services received.
- Provincial sales tax, Sindh Sales tax on services for example.
Output tax means tax levied under sales tax act on supply of goods or rendering of services, which includes;
- Tax levied under Sales Tax Act, 1990 on supply of goods made by the person.
- Excise duty levied under Federal Excise Act, 2005 in sales tax mode on manufacturing or production of goods or rendering of the services by the person and last but not least;
- The provincial sales tax levied on services rendered or provided by the person.
Supply means sale or other transfer of right to dispose of goods as owner. It also includes sale or hire purchase agreement. Putting to private, business or non-business use of the goods acquired, produce or manufactured in the course of taxation activity for purposes other than those of making a taxable supply.
Auction or disposal of goods to satisfy a debt owned by a person, possession of taxable goods held immediately before a person ceases to be a registered a person and in case of manufacture of goods belonging to another person, the transfer or delivery of such goods to the owner or to a person nominated by him all above accounted as supply.
Taxable supply means supply of taxable goods other than those, which have been exempted by the Federal Government under section 13 of the said Act. It also includes a supply of goods chargeable to tax at the rate of zero percent.
Time of supply is the earlier of the time at which the goods are delivered or made available to the recipient of the supply or the time when any payment is received by the supplier in respect of that supply. Distinguishing from the mentioned rule in hire purchase agreement time of supply means the time at which agreement is entered into.
Time of supply in relation to services, means the time at which the services are rendered or provided. Note that when any part payment is received in tax period for a supply, it shall be accounted for in the return for that tax period. But where any part payment is receive in respect of an exempt supply it shall be accounted for in the return in the tax period during which the exemption is withdrawn from such supply.
Talal Hassan 