Federal Government is pleased to direct that the following amendments shall be made in the Sales Tax Special Procedures Rules, 2005.

GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS & REVENUE CENTRAL BOARD OF REVENUE ***** Islamabad, the 11th July, 2005. NOTIFICATION (SALES TAX) S.R.O. 694(I)/2005.- In exercise of the powers conferred by section 71 of the Sales Tax Act, 1990, read with clause (9) of section 2, sections 3, 3AA and 4, sub-section (2) of section 6, section 7A, clause (b) of sub-section (1) of section 8, clause (a) of sub-section (2) of section 13, sub-section (3) of section 22, section 23, sections 26AA and 34A and the first and second provisos to section 45 thereof, the Federal Government is pleased to direct that the following amendments shall be made in the Sales Tax Special Procedures Rules, 2005, namely:- In the aforesaid Rules, after rule 122, the following new Chapter shall be inserted, namely:- “CHAPTER XVII SPECIAL PROCEDURE FOR PAYMENT OF SALES TAX BY MANUFACTURERS OF BISCUITS AND CONFECTIONERY 122A. Application.- The provisions of this Chapter shall apply to the manufacturers of biscuits and confectionery who are required to pay sales tax on printed retail price in terms of clause (a) of sub-section(2) of section 3 of the Act, read with the Third Schedule thereto. 122B. Definitions.- (1) In this Chapter, unless there is anything repugnant in the subject or context,- (a) “Act” means the Sales Tax Act, 1990; (b) “manufacturer” means the person registered as manufacturer of biscuits and confectionery under this Act; and (c) “retail price”, with reference to the items specified in the Third Schedule to the Act, means the price fixed or declared by the manufacturer at which any particular brand or variety of biscuits or confectionery should be sold to the general body of consumers. (2) All other expressions and words used, but not defined in this Chapter, shall have the same meaning as is assigned to them under the Act. 122C. Mode of payment of tax.- All the registered manufacturers shall, in addition to the sales tax payable at the rate of fifteen percent of the value at which the goods are cleared or supplied from the factory ( ex-factory price), pay sales tax on a value addition of twelve per cent in lieu of sales tax payable on the basis of printed retail price, as illustrated below:- ILLUSTRATION: (a) Value of supplies prior to value addition= Rs. 100/- (b) Sales tax @ 15% = Rs. 15/- (c) Ex-factory price = (a) + (b) = Rs. 115/- (d) Value of supplies with value addition of 12% = [c + (c x 12 /100)] or 115 + (115 x 12 / 100) = Rs. 128.80/- (e) Value addition on which sales tax is payable = [(d) - (c)] or 128.8 (-) 115 = Rs. 13.80/- (f) Amount of sales tax on value addition = [e x 15 / 100] or 13.80x 15 / 100 = Rs. 2.07/- (g) Total sales tax payable by a manufacturer = [(b) + (f)] or [15 (+) 2.07] = Rs. 17.07/- 122D. Determination of tax liability.- While determining his tax liability, a manufacturer shall be entitled to claim input tax credit for the tax paid on account of taxable purchases or imports made by him and utilities like gas or electricity consumed for furtherance of taxable activity, against his output tax liability, subject to the conditions, limitations, and restrictions prescribed under section 7 and 8 of the Act and the rules or notifications issued thereunder and subject to fulfillment of the conditions laid down under section 73 of the Act. 122E. Printing of retail price.- The retail price inclusive of sales tax shall be legibly, prominently and indelibly printed or embossed by a manufacturer on each article, packet, container, package, cover or label, as the case may be. The manufacturer, who for any reason, cannot have the retail price printed, shall declare to the Collector of Sales Tax having jurisdiction the retail price, at which the item would be sold to the general body of consumers, along with the reasons or justification for not printing the retail price. 122F. Records.- Every manufacturer shall maintain the records prescribed under section 22 of the Act or any notification issued thereunder.”. [C. No. 1(2)STR/2002]. (SHAHID AHMAD) Additional Secretary