Special Procedure for Collection and Payment of Sales Tax on Vehicles

GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE (REVENUE DIVISION) ******* Islamabad, the 14th September, 2005 NOTIFICATION (Sales Tax) S.R.O. 951(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 further amendments shall be made in the Sales Tax Special Procedure Rules, 2005, namely:- In the aforesaid Rules, ¾ (1) in CHAPTER II, in rule 9, in clause (d), after the word “goods”, the words “excluding vehicles” shall be inserted; and (2) after CHAPTER XVI, the following new chapter shall be added, namely:- “ CHAPTER XVII SPECIAL PROCEDURE FOR COLLECTION AND PAYMENT OF SALES TAX ON VEHICLES 124. Application. - (1) The provisions of this Chapter shall apply to the ¾ (a) manufacturers who are engaged in the assembly or manufacture of vehicles for the purpose of supply; (b) importers who import vehicles for further supply; (c) dealers who are engaged in or deal in the sale of vehicles imported or assembled or manufactured locally whether on the basis of commission or otherwise; and (d) persons who get the registration of any old, used or second hand vehicles transferred in their name. 125. Definitions. - (1) In this Chapter, unless there is anything repugnant in the subject or context, ¾ (a) “Act” means the Sales Tax Act, 1990; (b) “Collector” means a Collector of Sales Tax in whose jurisdiction a manufacturer, importer or dealer is or is required to be registered for the purpose of the Act and rules made thereunder; (c) “commission” means the amount payable by the consumer to a dealer for the purpose of intermediating sale, booking, delivery or other related services or activities in respect of a vehicle and includes any other amount charged from a consumer or seller over and above the price of the vehicle; (d) “consumer” means a person who buys vehicle in any capacity; (e) “dealer” means a person appointed or authorized by the manufacturer or importer of vehicles whether or not he deals in old, used or second hand vehicles and includes a person who deals in vehicles as dealer or otherwise on commercial basis; (f) “delivery advice-cum-invoice” means the document issued by the dealer in the form set out at Annex I indicating, inter alia, the amount, if any, and the sales tax charged thereon by the dealer over and above the price indicated in the invoice issued by the assembler or, as the case may be, the importer directly in the name of the consumer; (g) “importer” means a person who imports completely built-up vehicles for further supply and includes a dealer if he is also importing vehicles and making further supplies in addition to his other business as dealer; (h) “manufacturer” means a person who imports vehicles in CKD condition and is engaged in the assembly of such vehicles into CBU condition for further supply and includes a person who is otherwise engaged in the assembly or manufacture of vehicles for sale; (i) “old, used and second hand vehicles” means such vehicles whether or not already registered in Pakistan as are purchased by a dealer for sale or are brought to him by owners or sellers from the public for sale against commission and include the vehicles the registration of which is sought to be transferred from the concerned authority by any person in his name or in the name on whose behalf such transfer is being sought: Provided that the old used, second hand vehicles whether reconditioned or not imported for further supply in Pakistan shall be deemed new vehicles for the purpose of these rules before they are registered in Pakistan; (j) “vehicles” include all types of vehicles covered under Chapter 87 of the Pakistan Customs Tariff other than headings 8712.0000, 8715.0000 and 87.16 thereof, as are generally used for the transportation of persons or goods including three or two wheelers; and (k) “vehicle identification number (VIN) chip” means a device to be affixed on the vehicle with unique identification number in such form, style and manner as may be specified by the National Database and Registration Authority (NADRA). (2) All other expressions and words used but not defined in this Chapter shall have the same meanings as are assigned to them in the Act and rules made thereunder. 126. Registration. - (1) Each manufacturer, importer and dealer of vehicles, if not already registered, shall obtain registration from the Collector for the purposes of sales tax. (2) Every manufacturer or importer of vehicles shall within seven days of coming into force of, this chapter declare to the Collector full particulars of his dealers and the Collector shall ensure that no such or other dealer of vehicles falling in his jurisdiction remains unregistered. (3) From such date as may be specified by the Central Board of Revenue, no manufacturer of vehicles shall supply any vehicle to any person unless vehicle identification number (VIN) chip has been affixed to the vehicle in the form, style and manner as specified by the National Database and Registration Authority. 127. Booking of vehicles. - No vehicle shall be booked by the concerned manufacturer or importer through a dealer unless the particulars of such dealer and the concerned buyer are clearly mentioned in the relevant booking documents. 128. Invoicing. - (1) Each manufacturer or an importer who sells any vehicle through a dealer shall issue sales tax invoice in the name of the dealer mentioning full particulars of such dealer and the dealer shall issue sales tax invoice in the name of the consumer: Provided that nothing shall bar any manufacturer or importer to issue consolidated sales tax invoice in the name of his dealer for more than one vehicles. (2) Where a manufacturer or an importer sells a vehicle directly to a consumer, sales tax invoice shall be issued in the name of the consumer and sub-rule (3) shall not apply in such cases. (3) Notwithstanding any thing in sub-rule (1), in case where the vehicle is invoiced directly to customer through a dealer the dealer shall issue a delivery advice-cum-invoice as specified in clause (f) of rule 125 and hand over the same to the buyer at the time of delivery of the vehicle along with the invoice issued by the manufacturer or importer to the customer. 129. Tax on old, used and second-hand vehicles. - In case of old, used and second hand vehicles sold by a dealer whether after purchase or on behalf of any person from the public, the dealer shall issue a sales tax invoice taking ten percent of the sales price of the vehicle plus the amount of commission, if any, as ‘assessable value’ and charge net sales tax accordingly at the rate specified in sub-section (1) of section 3 of the Act: Provided that where any old, used or second hand vehicle is brought to any authority for transfer of the registration without the involvement of any dealer, sales tax at the aforesaid rate taking ten per cent of the declared purchase price as assessable value, shall be deposited by the transferee in the nearest branch of National Bank of Pakistan under the relevant head of account and proof of such payment shall be produced to the said authority before the transfer of registration is allowed: Provided further that the said authority shall intimate the Collector of Sales Tax of the jurisdiction figures of all such tax payments relating to a month by tenth of the succeeding month. (2) Where a manufacturer, an importer or a dealer is also engaged in the business of selling auto parts and auto repair including auto-wash, sales tax invoice shall also include auto- parts, spare parts and other taxable goods supplied or used in the course of such sales, repairs or washing. Provided that no sales tax shall be payable on the amount charged exclusively for the service rendered for repair or washing. 130. Declaration of commissions. - (1) Each manufacturer or as the case may be, importer shall declare to the Collector the rates of commissions payable to his dealers in case of each category, make and model of vehicle and changes as and when made in these rates shall also be communicated to the Collector within seven days. (2) Nothing shall prohibit the Collector to ascertain or verify the accuracy of the declared rates or amounts of commissions and other information supplied under any of the provisions of this chapter. 131. Input tax adjustment. - (1) Subject to sub-rules (2) and (3), the manufacturers, importers and dealers, shall be entitled to input tax adjustment in respect of tax-paid vehicles in terms of sections 7 and 8 of the Act. (2) The dealer shall not be entitled to any input tax adjustment or refund on any used, old and second hand vehicle sold after purchase from any person or on behalf of any other person. (3) No input tax adjustment shall be admissible in respect of a vehicle supplied by a manufacturer of vehicles without affixing VIN chip as required under sub-rule (3) of rule 126. (4) In case of vehicles which are imported for further sale or purchased on payment of sales tax for further sale, sales tax shall be paid after availing input tax adjustment on the basis of relevant goods declaration or as the case may be, sales tax invoice: Provided that in case of imported vehicles which have been cleared on payment of duty and taxes in US dollar or in equivalent amount of Pak rupee in terms of the Federal Government’s Notification No. SRO 577(I)/2005, dated 6th June 2005, the adjustment shall be admissible only to the extent of sales tax calculated on the goods declaration as reduced by the apportionment of the amount so paid as if it were the total assessed duties and taxes payable on such vehicle. Provided further that the dealer through whom the vehicle imported in terms of the said notification is first sold shall be deemed to be the importer of such vehicle for the purpose of availing input tax adjustment and payment of net output tax on the supply thereof. 132. Determination of tax liability. - (1) A manufacturer or importer of vehicles shall pay sales tax due on the supply of their vehicles as per relevant law. (2) A dealer shall not be required to pay sales tax on such amounts of commission on which tax has been paid by the manufacturer or importer on whose behalf vehicles is sold by such dealer provided that in case any amount is received over and above such commission, the obligation to pay tax shall be of the dealer. (3) In case of old, used or second hand vehicles sold whether after purchase or on behalf of other persons other than manufacturer or importer whose dealer he is, the dealer shall be responsible to pay tax on the basis of invoices issued under rule 129. (4) In case of vehicles exchanged without involvement of any cash payment between the dealers exclusively for subsequent sale at their respective ends, tax shall be paid only at the time of their actual sale to the public. (5) Where a vehicle owned by any person from the public is sold through a dealer in exchange of other vehicle, tax shall be paid on both the vehicles as if these have been sold without any such exchange. 133. Payment of tax. - Each manufacturer, importer and dealer shall deposit sales tax by 15th of the following month on a return-cum-challan as stated in rule 135. 134. Registration of vehicles. - No vehicle purchased through a dealer shall be registered by the authority competent to register vehicles under any law, rules or regulation unless the dealer’s original sales tax invoice or as the case may be, original dealer’s delivery advice-cum-invoice along with the invoice of the manufacturer or importer is produced to become a part of the official record of the vehicle with such authority; Provided that vehicle which has been privately imported by any person from the public in his own name shall be registered on the basis of original import documents as per procedure already in vogue under the relevant law. 135. Filing of return. - (1) Each manufacturer or, as the case may be, importer shall file monthly sales tax return-cum-challan in the manner prescribed under CHAPTER II of the Sales Tax Rules, 2005. (2) Each dealer shall file in triplicate the monthly return-cum-challan by 15th of each month in the form set-out at Annex II and make payment of sale tax accordingly. 136. Statements by assemblers or importers. - (1) Each manufacturer or, as the case may be, importer of vehicles shall furnish to the Collector a dealer-wise consolidated statement by 20th of each month in the form set out at Annex III. (2) The manufacturers and importers shall also furnish a monthly consolidated statement to the Collector indicating the number and value of vehicles, if any, sold directly to the consumers and the amount of sales tax paid on such vehicles. 137. Records. - (1) Each manufacturer, importer and dealer shall keep proper record of all purchases, sales and tax invoices including import documents. (2) Where so requested by the Collector, the registration authority shall furnish all information about the vehicles on which sales tax has been paid in terms of the first proviso to rule 129. 138. Audit. - Audit of a manufacturer, importer or dealer of vehicles shall generally be a composite audit for all taxes administered by the Board and conducted preferably on annual basis.

Annex-II [ See sub rule (2) of rule 135] GOVERNMENT OF PAKISTAN Sales Tax Return - cum - Payment Challan Pl. tick the relevant box (FOR DEALERS OF VEHICLES) (01) Sales Tax Registration Number (02) N.T.N # (03) Name & Phone # _________________________________________________________________________________________________ (05) Sales | VALUE (excluding Sales Tax) | Rate | SALES TAX DUE (a) Supplies of vehicles sold on behalf of assemblers / importers on commission | Rs. (b) Supplies of vehicles purchased by the dealer | Rs. | 15% (c) Supplies of old / used/second hand vehicles on commission basis | Rs. | 15% (d) Other taxable supplies | Rs. (e) Exempt supplies | Rs. TOTAL | Rs. | Rs. (06) Purchases | VALUE (excluding Sales Tax) | Rate | SALES TAX PAID (a) Taxable imports | Rs. | 15% | Rs. (b) Taxable purchases | Rs. | 15% | Rs. (c) Exempt imports / purchases | Rs. (f) Tax paid on Utilities (tele+gas+electricity) | Rs. TOTAL | Rs. | Rs. Rs. (08) Penalty for late filing Rs. (07) Arrears / Default Surcharge / Recoveries pointed out by Audit (09) Net amount payable (Including Arrears, Default Surcharge and Penalties ) Rs. (Under each head) q Rs. 0220000 Sales Tax on commissions q Rs. 0225000 Sales Tax on sale of purchased / imported vehicles q Rs. 0225000 Sales Tax on supplies of old / used / 2nd hand vehicles q 0220000 Sales Tax on the other sales (other than vehicles) Rs. TOTAL SALES TAX PAYABLE Declaration (Including amounts of Col 07 & 08 if any) I declare that the entries in this return are true and correct Name Signature N.I.C # Stamp Designation Date __________________________________________________________________________________________________ Rs. For Bank use Serial No……………… Amount Amount in words. ……………………………………………………..… Received …………………………………………………………………………..…. Bank Officer’s Signature …………………………….……….………… Bank’s Stamp ____________________________________________________________________________________________________ Annex-III (See sub-rule (1) of 136) MONTHLY STATEMENT TO BE FURNISHED BY ASSEMBLERS / IMPOTERS OF VEHICLES ( FOR THE MONTH OF _______________) Name & address of the Importer / Assembler ________________________ Sales Tax Registration No._______________________________________ Dealer’s Name & Address _______________________________________ Sales Tax Registration No. ______________________________________ S # | Vehicles imported (CKD) | Vehicles Imported (CBU) | Vehicles Sold | Sales Tax Paid | Commissions paid | Sales Tax paid on Commission | Remarks No | Value | No | Value | No | Value Name & Signature of Authorized Representative ________________________________________” [C.No.3(12)ST&FE-L&P/04] (SHAHID AHMAD) ADDITIONAL SECRETARY Annexure I (See clause (vi) of rule 125) DELIVERY ADVICE-CUM-INVOICE SNo. NAME OF THE DEALER | Collector ________________________________ PART ‘A’ (Customer’s Particulars) Manufacturer Invoice Number. | : Sales Order No. | Manufacturer Invoice Date. | : Customer Name. | NTN No. | : Address. | NIC No. | : Customer Phone # | Customer S.Tax Reg.# | : PART ‘B’ (Vehicle Particulars) DESCRIPTION CHASIS NO ENGINE NO: | Registration No. (if applicable) (Number Plate) COLOUR PART ‘C’ (Invoicing Portion) i) Manufacturer’s or importer’s Invoice price Rs.___________________________________________________________________ ii) Amount, if any, charged over and above the manufacturer or importer’s invoice Rs.______________________________ iii) Sales tax charged on the amount mentioned in (ii) above Rs.______________________________________________________ We this day have taken the delivery of the above vehicle (through name of the dealer) detail of which is specified above together with the following items in perfect running condition to our satisfaction. A) Spare Wheel | B) Tool Kit | C) Warranty Book ______________________ _____________________ Authorized Signature (Dealer) Authorized Receiver Signature Name __________________ Name __________________ Title ___________________ Date ___________________ Date __________________ NIC __________________