Sales Tax Registration
A Sales Tax is a tax paid to a governing body for the sales of certain goods and services. Usually laws allow the seller to collect funds for the tax from the consumer at the point of purchase. When a tax on goods or services is paid to a governing body directly by a consumer, it is usually called a use tax. Often laws provide for the exemption of certain goods or services from sales and use tax.
Following sectors are required to get registration for sales tax and charge sales tax on their supplies/ services: Manufacturing, Import, Services, Distribution, Wholesale & Retail stage.
Previously it was being charged at the manufacturing & import stage, and its scope has been extended now to remaining sectors.
Sales tax is chargeable on all locally produced and imported goods except computer software, poultry feeds, medicines and unprocessed agricultural produce of Pakistan and other goods specified in Sixth Schedule to the Sales Tax Act, 1990.
Every person in sectors mentioned above, who makes a taxable supply in Pakistan is required to be registered under the Sales Tax Act. However, manufacturers having taxable turnover below five million rupees and also utility bill below Rs. Seven lac during the last twelve months are exempted from registration and payment of sales tax. Similar exemption is also available to retailers having total turnover below Rs. five million in the last twelve months.
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