Debit and Credit Note and Destruction of Goods Rules, 1996

GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE Islamabad, the 22nd August, 1996 NOTIFICATION SALES TAX S.R.O.696(I)/96.-- In exercise of the powers conferred by section 50 of the Sales Tax Act, 1990, read with section 9 thereof, and in suppression of S.R.O.802(I)/91, dated the 12th August 1991, and S.R.O.130(I)/92, dated the 22nd February, 1992, the Central Board of Revenue is pleased to make the following rules, namely.- 1. Short title, application and commencement.-- (1) These rules may be called the Debit and Credit Note and Destruction of Goods Rules, 1996. (2) These shall apply to a taxable supply where the goods are returned by the buyer in terms of the provisions of section 9 of the Sales Tax Act, 1990. 2. Issuance of Debit and Credit Note.-- (1) Where a registered person makes a supply of taxable goods which are returned by the buyer within ninety days of such supply, the buyer shall issue a Debit Note (in duplicate) in respect of goods returned by him indicating their value determined on the basis of supplier, amount of sales tax paid thereon, number and date of the original tax invoice: Provided that the Collector may, at the request of the supplier, in specific cases, by giving reason in writing, extend the period of ninety days to one hundred and eighty days. (2) The original copy of Debit Note shall be sent to the supplier and the other copy shall be retained for his own record. (3) On receipt of the goods returned by the buyer and the Debit Note, the supplier shall issue a Credit Note (in duplicate) in respect of the goods received by him indicating their value, amount of sales tax charged thereon at the time of their supply and the number and date of tax invoice which was issued by the supplier in respect of these goods and send the original copy to the buyer and retain the duplicate copy for his own record. 3. Adjustment of input and output tax.-- (1) The buyer shall not be entitled to claim input tax in respect of goods which he has returned to the supplier. (2) Where the buyer has already claimed input credit in respect of these goods, he shall reduce the amount of input tax to that extent in his return for the tax period in which the goods were returned by him to the supplier. (3) The supplier shall on the basis of the Credit Note issued by him, correspondingly reduce, the amount of output tax in his return for the tax period in which the goods were received by him. (4) Where the aforesaid goods are supplied to the original buyer or some other person with or without carrying out any repairs, the supplier shall charge sales tax thereon in the normal manner and account for it in his return for the period in which these goods were supplied. 4. Destruction of goods and adjustment of input and output tax.-- (1) Where the goods are returned by the buyer on the ground that the same are unfit for consumption and need to be destroyed by the supplier, he shall issue a Credit Note in respect of these goods indicating their value and the amount of sales tax charged thereon at the time of supply. (2) The Credit Note shall also indicate the original tax invoice number, date and reason for destruction and on the basis of the Credit Note the supplier shall correspondingly reduce the amount of output tax in his return for the tax period in which the goods were destroyed. (3) The goods shall be destroyed after obtaining permission from the Collector of Sales Tax having jurisdiction, and under the supervision of an officer of Sales Tax not below the rank of an Assistant Collector as may be deputed by the Collector for the purpose ( Lutfullah Virk ) Secretary (Sales Tax) [C.No.1/43-STB/96] Amended vide SRO. 682(I)/99 dated 12.06.1999 Amended vide SRO. 400(I)/2001 dated 18.06.2001