Sales Tax (refund of Excess Input Tax to the Manufacturers) Rules, 2005

GOVERNMENT OF PAKISTAN (REVENUE DIVISION) CENTRAL BOARD OF REVENUE *** Islamabad, the 30th June, 2005 NOTIFICATION (SALES TAX) S.R.O. No. 666(I)/2005.-- In exercise of the powers conferred by section 50 of the Sales Tax Act, 1990, read with the provisos to sub-section (1) of section 10 thereof, the Central Board of Revenue is pleased to make the following rules, namely:- SALES TAX (REFUND OF EXCESS INPUT TAX TO THE MANUFACTURERS) RULES, 2005. 1. Short title, application and commencement.--(1) These rules may be called the Sales Tax (Refund of Excess Input Tax to the Manufacturers) Rules, 2005. (2) They shall apply to such registered manufacturers who meet the criteria of ‘manufacturer’ as defined under these rules. (3) They shall come into force on the first day of July, 2005. 2. Definitions.-- Unless there is anything repugnant in the subject or context,- (a) “Act” means the Sales Tax Act, 1990; (b) “Adjustment advice” means the automated advice generated by the computer system, authorizing the registered manufacturer to utilize the admissible amount specified therein for adjustment against his future output tax liabilities; (c) “Adjustment note” means the intimation given by the manufacturer to the Collector about his intention to utilize the amount of excess input tax against his output tax liabilities during the three tax periods subsequent to the tax period to which the monthly return containing declaration of such excess inputs relate. The adjustment note shall be serially numbered on financial yearly basis with dates mentioned therein; (d) “Collector” means the Collector of Sales Tax having jurisdiction; (e) “Manufacturer” means such registered person,- (i) who is engaged in the manufacture and supply of goods other than those specified in Notification No. S.R.O. 621(I)/2005, dated the 17th June, 2005; and (ii) whose refund claims are not being dealt with under CHAPTER V of the Sales Tax Rules, 2005; (f) “Excess input tax” means input tax not utilized on account of adjustment against output tax for the tax period in respect of which a return-cum-payment challan has been filed; (g) “Refund” means the refund of excess input tax claimed in column (8) of the sales tax return-cum-payment challan filed under rule 15 of CHAPTER II of the Sales Tax Rules, 2005; and (h) “Summary” means summary statement of purchase invoices and sales invoices furnished under Notification No. S.R.O. 525(I)/2005, dated the 6th June, 2005. 3. Scope of claim.--Only such input goods shall be taken into account for the purpose of availing refund under these rules which have been acquired on payment of sales tax during the relevant tax period. 4. Summary of invoices.-- The bone fides of the claim shall be determined on the basis of summary statement of purchase and sale invoices filed by the manufacturer in terms of Notification No. S.R.O. 525(I)/2005, dated the 6th June, 2005. 5. Adjustment note and Adjustment advice.-- (1) The manufacturer shall at the time of furnishing summary of purchase and sale invoices, intimate the Collector that he intends to utilize the amount claimed in refund for the purpose of adjustment against his output tax liabilities during the three tax periods subsequent to the tax period to which the relevant monthly return relates. (2) The manufacturer shall certify in the adjustment note that he has fulfilled the conditions of section 73 of the Act. 6. Automated scrutiny of claims. -- The Collectorate shall maintain separate database of each manufacturer wherein every adjustment note shall be entered along with summary of invoices so as to ensure that the amount claimed in refund is adjusted against output tax liabilities within the time specified in the note and the computer will generate an Adjustment advice which shall be conveyed to the registered person within ten days. The Adjustment advice shall be treated as an authorization of refund of the specified amount and the concerned manufacturer shall be entitled to utilize the admissible amount as specified in the advice for adjustment against his future output tax liabilities as provided under these rules. 7. Manner of adjustment.-- The reference number and the date of Adjustment note and particulars of the relevant Adjustment advice shall be mentioned by the manufacturer on the monthly return on which adjustment of excess amount of input tax is made. 8. Miscellaneous.-- (1) The Collector or any officer duly authorized by him in this behalf may refuse adjustment of any amount claimed by a registered manufacturer: Provided that no claim for adjustment of any amount under these rules shall be refused unless a show cause notice and an opportunity of being heard has been given to the concerned manufacturer. (2) Pending adjudication or decision of the case, the Collector or any officer duly authorized by him in this behalf may direct the registered manufacturer not to utilize the claimed amount or any such amount in such manner and subject to such conditions as may be specified by the Collector, or as the case may be, by such officer. (3) These rules shall also apply in case of public sector electric power and gas companies irrespective of the nature and composition of their input tax. ______________________________________________________________________ [C. No. 3(4)ST-L&P/2005] (Dr. Muhammad Zubair) Secretary (ST & CE-Budget) ___________________________________________________________________________________________________________________________________________ Government of Pakistan Revenue Division Central Board of Revenue (ST & FE wing) *** C.No.3(4)ST-L&P/05 Islamabad, August 9, 2005 The Collector, Large Taxpayer Unit Lahore/Karachi The Collector Sales Tax & Federal Excise, Karachi (Hqrs)/Karachi (Enforcement)/Karachi (Audit) Lahore/Faisalabad/Gujranwala/Rawalpindi/Peshawar The Collector, Customs, Sales Tax & Federal Excise, Hyderabad/Quetta/Multan Subject: SRO 666(I)/05 Dated 30-06-2005- Clarification regarding I am directed to refer to SRO 666(I)/05 dated 30th June, 2005 and to say that the said SRO envisages adjustment of excess input tax by the registered manufacturers for three tax periods subsequent to the tax period to which the monthly return containing declaration of such input relate. For availing the facility of excess input adjustment, the registered manufacturer is required to give an intimation to the Collector having jurisdiction in the form of an Adjustment Note and after receipt of an Adjustment Advice from the concerned Collectorate the said manufacturer is entitled to make the adjustment. 2. With a view to facilitate the registered manufacturers for availing the excess input adjustment in terms of SRO 666(I)/05 dated 30-06-2005, the Board is pleased to prescribe standard formats of Adjustment Note and Adjustment Advice appended herewith. (Wajid Ali) Secretary (ST&FE Budget)