Law: Sales Tax Act, 1990

Section: 3,8,2(37),2(41),13Sixth Schedule,Entry21

Law: Sales Tax Special Procedure (Withholding) Rules, 2007

Section: R.2

Sales Tax Act (VII of 1990)- -Ss. 3, 13, 8, 2(41), 2(37) & Sixth Schedule, Entry 21-Sales Tax Special Procedure (Withholding) Rules, 2007, R. 2-Scope of sales tax-"Taxable activity-Taxable goods-Supply of goods- Determination of tax liability-Tax credit not allowed-Claim of input tax-Exemption from sales tax-Withholding of sales tax- Responsibility of withholding agent-Printing and supply of books to Provincial Textbook Board-Scope-Question before the High Court related to the applicability of sales tax upon printing and subsequent supply of textbooks to Provincial Textbook Board; and whether Provincial Textbook Board was required to withhold sales tax in such transactions-Held, that in order to attract applicability of S. 3 of the Sales Tax Act, 1990 which was the charging section, all essential ingredients must exist in a transaction rendering a person liable to sales tax and a transaction was utaxable supply " when the same was in furtherance of a *taxable activity"-When a manufacturer made supply of goods which were exempt from sales tax under S. 13 of the Sales Tax Act, 1990 then such manufacturer was not required to pay sales tax at time of supply of goods as said exemption would take such supply outside the regime of "taxable supply"; which was condition precedent for invoking S. 3 of the Sales Tax Act, 1990-In the present case, printing and supply of textbooks to Textbook Board pursuant to an agreement would constitute a taxable activity however, the same could not be termed as taxable supply per S. 2(41) of the Sales Tax Act, 1990-Textbook Board was not required to withhold sales tax on such transactions as under R. 2 of the Sales Tax Special Procedure (Withholding) Rules, 2007; withholding of sales tax was only required when withholding agent was making payment against taxable goods and supply of books was exempt from levy of sales tax under Entry 21 of the Sixth Schedule to the Sales Tax Act, 1990-High Court observed that printing of books fell within definition of "manufacturing" under Sales Tax Act, 1990 and was therefore not a service rendered under the said Act and thus, claim ^of input tax could not be made by a person on goods .that were…

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