Special Procedure for Jewellers Rules, 2001

GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS & REVENUE REVENUE DIVISION ***** Islamabad, the 18th June, 2001 NOTIFICATION (SALES TAX) S.R.O. 391(I)/2001. -- In exercise of the powers conferred by sub-section (1) of section 71 of the Sales Tax Act, 1990, read with clause (b) of sub-section (1) and sub-section (7) of section 8, and clause (a) of sub-section (2) of section 13 thereof, the Federal Government is pleased to make the following rules, namely:-- 1. Short title, application and commencement.-- (1) These rules may be called the Special Procedure for Jewellers Rules, 2001. (2) They shall apply to the jewellers, goldsmiths and other persons engaged in the manufacture or supply of jewellery whether on ownership basis or on labour or service charges basis, and to persons engaged in the supply of ready-made jewellery. (3) They shall come into force with immediate effect. 2. Definitions. (1) In these rules, unless there is anything repugnant in the subject or context,-- (a) ‘Act’ means the Sales Tax Act, 1990; (b) ‘jeweller’ means any person engaged in the supply of jewellery as a manufacturer, wholesaler or retailer, but does not include a zargar; (c) ‘jewellery’ includes ornaments and articles of adornment made of gold, silver, precious and semi-precious metals, precious or semi-precious stones, gems or any other such materials; (d) ‘manufacture’ means the process of making of jewellery or the carrying out of any process in the making or in connection with making of jewellery and includes repair of jewellery; and (e) “zargar” means any person who is engaged in the making of jewellery or carrying out any related process on labour charge basis and is not involved in the sale of jewellery to ordinary consumers. (2) All other expressions and words used but not defined in these rules shall have the same meanings as are assigned to them under the Act. 3. Registration.-- (1) Every jeweller engaged in the business of manufacturing or supplying jewellery shall, if not already registered, apply to the Collector of Sales Tax having jurisdiction for registration under section 14 of the Act and rules made thereunder. (2) The exemption available to manufacturers and retailers having annual turnover less than that specified in serial No. 42 of the Sixth Schedule to the Act, shall be available to jewellers. (3) A zargar shall not be required to be registered if he is not engaged in the sale of jewellery to ordinary consumers. 4. Exemption. In respect of his output tax liabilities, a registered jeweller shall be entitled to exemption equal to the amount of sales tax as is in excess of sales tax chargeable on the difference between sale price of jewellery, excluding amount of sales tax, and the value of exempt gold or silver used therein provided that,-- (a) such difference is in no case less than ten per cent of the sale price excluding the amount of tax; and (b) the labour charges incurred in the making of the jewellery and the price of precious or semiprecious stones and gems, if used, is included in the sale price for the purpose of assessment of tax. 5. Payment of tax.-- (1) A jeweller shall pay sales tax at the rate specified in subsection (1) of section 3 of the Act on the following basis, namely:-- (i) In case of a jeweller working on labour (making) charges basis, on the amount of labour (making) charges received by him: Example.-- A jeweller receives material from a customer for manufacturing jewellery, on which he charges ten thousand rupees as labour (making) charges. Sales tax payable on this amount shall be Rs. 10,000 x 15/100 = Rs. 1500; and (ii) in case a jeweller making or supplying jewellery wholly or partly from exempt unworked gold or silve purchased or owned by him, sales tax shall be paid on the differential amount determined in accordance with the provisions of rule 4. Example.-- A jeweller purchases exempt unworked gold for eight thousand rupees and after manufacturing jewellery sells the same at value of ten thousand rupees. Difference between sale value and value of exempt gold used is Rs. 10,000 - Rs. 8,000 = Rs. 2,000. Sales tax shall be payable on this differential amount, i.e., Rs. 2000 x 15/100 = Rs. 300/- (2) A registered jeweller shall not be entitled to take adjustment of any input tax or claim any refund of sales tax. 6. Invoices and returns.-- (1) A registered jeweller shall issue in English or in Urdu language tax invoices in the form as set out at Annex A to these rules. (2) A registered jeweller shall file monthly returns in the form as set out in Annex B to these rules. 7. Record keeping.-- A registered jeweller shall keep the following record, namely:-- (a) register in the form as set out in Annex C to these rules in English or in Urdu language; (b) copies of sales tax invoices issued under sub-rule (1) of rule 5; (c) electricity bills, telephone bills, rent receipts, wage payment receipts and proof, if any, of all such other expenditures as relate to business activity; (d) copies of monthly returns filed in the bank; and (e) purchase invoices, purchase memos or receipts in any form, if any, received on purchase of raw materials and other inputs. 8. Audit.-- Audit of a person registered under these rules shall be conducted in usual manner under the Act, but the auditors shall not require the registered jewellers to furnish any document or record other than the ones specified in these rules. 9. Responsibility of Jewellers’ Association.-- The concerned Jewellers Association or Trade Body shall be responsible to ensure that all its member jewellers having turnover above the threshold for exemption are registered, and the concerned office bearer shall be personally responsible if, at any later stage, it is found that the turnover of any jeweller certified by him as less than the aforesaid threshold was actually above such threshold. 10. Miscellaneous.-- All provisions of the Act and the rules made thereunder, insofar as these are not inconsistent with these rules shall, mutatis mutandis, apply to the jewellers registered under these rules. Amended vide SRO No. 675((I)/2001 dated 27.09.2001 ANNEX A [See rule 6(1)] SALES TAX INVOICE S. No. _________ Date: ________ ( Jeweller’s Name ) ( ….Address ….) ( ….Tel. No. / Fax No. …..) Sales Tax Registration No. _________________________ Buyer’s name :___________________________________________________________ Address :___________________________________________________________ S. No. | Description. | Quantity/Weight. | Price (per gm) | Price. (1) | (2) | (3) | (4) | (5) grams-milligrams Total. Less: E xempt Gold/Silver used. Value for sales tax purposes. Sales Tax @ 15% Total sale price. --------------------------------------------------------------------------------------------------------------------------------------------------- ANNEX B [See rule 6(2)] GOVERNMENT OF PAKISTAN SALES TAX RETURN-CUM-PAYMENT CHALLAN FOR JEWELLERS PART - I (01) SALES TAX REGISTRATION NO. (02) NATIONAL TAX NO. (02) NAME AND ADDRESS OF JEWELLER (03) TAX PERIOD Month Year ___________________________________________________________________________ PART - II (04) TOTAL VALUE OF SALES (05) VALUE OF EXEMPT GOLD/SILVER (06) TAXABLE VALUE (07) SALES TAX PAYABLE DECLARATION (08) I declare that the above particulars are true and correct. _______________________________________ _____________ Signature of authorised person with office stamp Date (Name and designation) PART - III (For Bank Use) SALES TAX PAYMENT CHALLAN (09) SALES TAX (A/C HEAD: 0220000) Sr. No.____________ (10) Amount Paid: Rs. (11) Amount in words: __________________________________________________ _______________________ Dated: __________________ (Treasury/Authorised Bank) with official stamp ANNEX C [See rule 7(a)] FORM OF REGISTER TO BE MAINTAINED BY A REGISTERED JEWELLER GOODS DISPATCHED/SOLD (1) S. No. (2) Date. (3) Tax invoice. (4) No. Brief particulars of goods sold. (5) Name of buyer. (6) Weight. (7) Total sale price. (8) Value of exempt gold/silver. (9) Value for sales tax purpose. (10) Amount of sales tax @15%. _____________________________________________________________________________________________ [C. No. 3(9)STL&P/2001] ( Riaz Ahmad Malik ) Additional Secretary