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style=\u0027tab-interval:.5in\u0027\u003e\r\n\r\n\u003cdiv class=Section1\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center\u0027\u003e\u003cb\u003eADJUSTMENT OF\r\nINPUT TAX PAID ON ADVERTISEMENT SERVICES\u003co:p\u003e\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center\u0027\u003e\u003cb\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center\u0027\u003e\u003cb\u003eBy\u003co:p\u003e\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center\u0027\u003e\u003cb\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center\u0027\u003e\u003cspan class=SpellE\u003e\u003cb\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.1pt\u0027\u003eAkhtar\u003c/span\u003e\u003c/b\u003e\u003c/span\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:\r\n.1pt\u0027\u003e \u003cspan class=SpellE\u003eJaved\u003c/span\u003e, Advocate, \u003cst1:place w:st=\"on\"\u003e\u003cst1:City\r\n w:st=\"on\"\u003eLahore\u003c/st1:City\u003e\u003c/st1:place\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eTo promote their business,\r\nvarious manufacturers hire the services of advertising agencies which charge\r\nsales tax on the supply of services of advertisement in pursuance of section\r\n3(2) read with serial No. 2 of the Schedule to the Punjab Sales Tax Ordinance,\r\n2000. These advertising services are utilized either exclusively for the\r\npurpose of taxable supplies made by the registered persons or for taxable as\r\nwell as exempt supplies.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e2. C.B.R. has consistently held\r\nthe view in its various \u003cspan class=SpellE\u003eclarificatory\u003c/span\u003e letters that a\r\nregistered person is entitled to make adjustment of input tax paid on services\r\nagainst output tax payable on taxable supplies of goods. C.B.R. vide C. No. 4(80)\r\nSTB. Retail (Pt) dated \u003cst1:date Month=\"7\" Day=\"1\" Year=\"2000\" w:st=\"on\"\u003e1-7-2000\u003c/st1:date\u003e\r\nhas clearly stated that \u0026quot;\u003cu\u003eall the provisions of Sales Tax Act, 1990 are\r\ntherefore, applicable on these services without any exception\u003c/u\u003e.\u0026quot;\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e3. Similarly C.B.R. in its letter\r\n1/16-STR/2000 dated 15th January 2001 has clarified that \u0026quot;\u003cu\u003esales tax\r\npaid on taxable services is adjustable against the output tax of a registered\r\nperson, because the same is to be charged and collected in the same mode and\r\nmanner as provided by the Sales Tax Act, 1990.\u003c/u\u003e\u0026quot;\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e4. In spite of \u003cspan\r\nclass=SpellE\u003eC.B.R.\u0027s\u003c/span\u003e categorical clarifications, field staff of sales\r\ntax had been raising observations regarding adjustment/refund of input tax paid\r\non advertisement services. In a recent Letter C. No. 1(17\u003cspan class=GramE\u003e)STR\u003c/span\u003e/2000\r\ndated \u003cst1:date Year=\"2002\" Day=\"11\" Month=\"11\" w:st=\"on\"\u003e11-11-2002\u003c/st1:date\u003e,\r\nC.B.R. has clarified that\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e\u0026quot;Adjustment\r\nof sales tax on services of advertisement as input tax can be claimed under\r\nclause (a) of subsection (I) of section 8 of the Sales Tax Act, 1990 provided\r\nit is established that sales tax invoice has been issued by a sales tax\r\nRegistered Person (Service Provider) directly in the name of sales tax\r\nregistered person/buyer who procured services only for exclusive use in making\r\nsupplies of taxable goods or rendering of service. 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