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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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