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Sales Tax Schedules
Adnan Mufti ACA
Shekha & MuftiChartered Accountants
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Schedules - Overview
Third Schedule (Retail Price Regime)
Fifth Schedule (Zero Rating Regime)
Sixth Schedule (Tax Exemptions)
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Retail Price Regime (3rd Schedule)
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What is Retail Price Mechanism ?
With reference to the Third Schedule, retail price
means the price fixed by the manufacturer, inclusive of
all charges and taxes (other than sales tax) at which
any particular brand or variety of any article should
be sold to the general body of consumers or, if more
than one such price is so fixed for the same brand or
variety, the highest of such price.
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What is Retail Price Mechanism ?
Taxable supplies specified in the 3rd Schedule are
charged to tax at the rate of 15% of the retail price.
This retail price alongwith related sales tax is liable to
be legibly, prominently and indelibly printed or
embossed by the manufacturer on each article, packet,
container, package, cover or label of the concerned
product.
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Input Tax Value of supply Output Tax Net Payable
Manufacturer 5,000 50,000 7,500 2,500
Wholesaler 7,500 55,000 8,250 750
Distributor 8,250 59,000 8,850 600
Retailer 8,850 60,000 9,000 150
4,000
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Input Tax Value of supply Output Tax Net Payable
Manufacturer 5,000 50,000 9,000 4,000
Wholesaler 9,000 55,000 9,000 -
Distributor 9,000 59,000 9,000 -
Retailer 9,000 60,000 9,000 -
4,000
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Ice Cream Tea
Aerated waters or beverages Powder drinks
Syrups and squashes Milky drinks including Flavored Milk
Cigarettes. Footwear
Toilet soap Spices in retail packing bearing brand names
Detergents Electric bulbs, energy saving lamps and tube lights
Shampoo Snacks including potato chips sold in retail packing
Toothpaste Shoe polish and shoe cream
Shaving cream Toilet Paper & Tissue Paper
Perfumery and cosmetics
Biscuits
Confectionary
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Issues in Retail Price Taxation !
Printing of retail price and sales tax on stock in
hand Disclosure in Tax Return by Manufacturer Tax Return of Wholesaler, Distributor, Dealer,
Retailer Taxation of Importer dealing Items under 3rd
Schedule Liability of Tax
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Zero Rating Regime (5th Schedule)
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What is Zero Rating ?
“Zero rated supplies are taxable supplies but the
rate of tax is zero”
Goods exported
Goods specified in the Fifth Schedule
Supply of stores and provisions for consumption aboard
a conveyance proceeding to a destination outside
Pakistan
Such other goods as Federal Government may specify
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5th Schedule
Supply, repair or maintenance of specific ships
Supply, repair or maintenance of specific aircrafts
Supply to diplomats, diplomatic missions, etc
Supplies to duty free shops
Supplies of raw materials, components for further
manufacturing in the Export Processing Zone
Supplies against international tenders
Dairy Items
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5th Schedule
Supplies of specified locally manufactured plant
and machinery to the Export Processing Zones and
to petroleum and gas sector Exploration &
Production companies
Supplies made to exporters under the Duty and
Tax Remission Rules, 2001
Imports or supplies made to Gawadar Special
Economic Zone, (excluding vehicles)
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Zero Rated Sectors
Leather and articles thereof including artificial
leather footwear
Textile and articles thereof
Carpets
Sports goods
Surgical goods
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Zero Rated Goods under Section 4
Milk
Yogurt
Cheese
Flavoured Milk
Pens & Balls Pen
Pencils including colour pencils
Trucks and dumpers exceeding 5 tonnes
Locally produced compost (non chemical fertilizer)
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Goods Specified by Govt. as Zero Rated
Goods
Imported plant, machinery and equipment (whether
or not manufactured locally), including parts thereof
Supply of plant, machinery and equipment, whether
locally manufactured or imported
Electricity and Gas of zero rated sectors is also zero
rated
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Issues in Zero Rating !
Exempt vs. Zero Rating
Zero Rating of Exempt Products possible ?
Registration of Commercial Exporters under
Section 14 of the Act
Indirect Exporter liable for zero rating ?
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Tax Exemptions (6th Schedule)
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Exempted Goods
Agricultural Produce
Pulses, Grains, Cereals, Vegetables, Fruits, Eggs,
Poultry, Meat, Dried Milk
Newspapers, Books, Journals, Directories
Currency Notes
Temporary Imports for subsequent exportation
Imported Samples
Import of Personal Effects including vehicles
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Exempted Goods
Supplies made by Manufacturers & Retailers not
exceeding Rs. 5 million in a year
Raw Material & Intermediary Goods manufactured
and consumed or Services rendered to himself in the
manufacture of taxable goods
Computer Software (Hardware now subject to sales
tax ! )
Supply of Fixed Assets whose input tax in not
admissible
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Issues in Tax Exemptions !
Pharma Products not registered in Drug Act
Implication when exempt product used in
manufacture of taxable goods and vice versa
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