Law: Sales Tax Act, 1990

Section: 2(43A),3,3(9A)

Sales Tax Act (VII of 1990)--- ----Ss. 3(9A) & 2(43A)---Scope of sales tax---Tier-1 retailers---Option to pay sales tax under the turnover regime---Scope---Taxpayer as per provisions of S. 3(9A) of Sales Tax Act, 1990 applied to the Commissioner Inland Revenue, Large Taxpayers Unit for exercising its option to pay sales tax at the rate of 2% under the turnover regime on its total sales---Request of taxpayer was declined by Commissioner on the ground that first proviso to subsection (9A) of S. 3 of Sales Tax Act, 1990 barred taxpayer to exercise the option under turnover regime---Validity---Taxpayer fell within the second proviso to subsection (9A) of S.3 of Sales Tax Act, 1990 and was entitled to exercise the option of payment of 2% sales tax on turnover basis---Taxpayer was a Tier-1 retailer having multiple sale outlets in air-conditioned malls in various cities and had rightly exercised its option as per the third proviso to S. 3(9A), Sales Tax Act, 1990---Appeal was accepted and taxpayer was held entitled to pay sales tax on turnover basis. THIS JUDGMENT PASSED BY: SHAHID MASOOD MANZAR, (CHAIRMAN):---.--- Through this appeal the impugned order dated 16.08.2018 passed by the learned Commissioner Inland Revenue, Zone-IV, Large Taxpayers Unit, Lahore, has been assailed by the appellant on the following grounds: 1. That appellant being Tier-1 retailer had rightly opted to pay sales tax @ 2%. The option of appellant has wrongly been rejected by the Commissioner Inland Revenue. 2. That the Commissioner Inland Revenue has wrongly held that appellant cannot opt to pay sales for 2%. 2. Brief facts of the case are that the taxpayer, a private limited company, derives income from manufacture and sale of garments through its own sales outlets at Lahore and other cities in Pakistan. As per subsection 9(A) to Section 3 of the Sales Tax Act, 1990 which was inserted in the said statute by the Finance Act, 2017 whereby Tier-1 retailers shall pay sales tax at the standard rate of 17% as prescribed in Rule 5 of the Sales Tax Rules, 2006. Subsection 9(A) through its First proviso provides that the retailers making supplies of finished goods of the 5 sectors specified in…

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