Sales tax registration

SALES TAX REGISTRATION

SALES TAX:
Sale tax is a tax on the supply of goods and is charged, levied and paid at the rate of 17% of
the value of taxable supplies made by a registered person and the value of goods imported
into Pakistan. The sales tax is not imposed on the supply or import of such goods as specified
in the sixth schedule

REGISTRATION IN SALES TAX:

Under section 14 the registration will required for such person and be regulated in such
manner and subject to the rules as the board may, by notification in the official gazette,
prescribe

PROCEDURE OF REGISTRATION:
The application may be submitted electronically on Form STR-1 as well as either
through post or courier services to Central Registration Office (CRO).

Application

can also be sent to Local Registration Office (LRO) in the form of hard copy. The
LRO after proper scrutiny of documents and necessary editing of the application and
particulars, electronically forwards the application to CRO.
All the columns of the Forms have to be duly filled in as per instructions given with
the Form.
After verification, the Central Registration Office will issue a Registration Certificate
bearing registration number and mail the same to the Registered Person, on a
prescribed Form (STR-5).
Office (CRO) normally verifies the contents from the data available with it, but has an
authority to get an enquiry conducted through Local Registration Office, to verify
contents of declaration by a person. The CRO may reject the application within fifteen
days from the date, the complete application is received in CRO, under intimation to
the applicant, specifying the reasons for such rejection.

Sales tax registration

WHERE IS TO BE REGISTERED?
A corporate person (listed/ unlisted public company, private limited company) has to
be registered under the Collectorate where the registered office of the business is
located.
A non-corporate person is to be registered under the collectorate, where the business
is actually carried on.
In case of non-corporate person having single manufacturing unit and the same is
located in a different place than the business premises, in the Collectorate having
jurisdiction over the manufacturing unit. A corporate person has the option of
transferring his registration to the place of business.

WHO IS TO BE REGISTERED?
All importers.
All wholesalers (including dealers) and distributors.
Manufacturers not falling in cottage industry. {Cottage industry is defined as having
annual turnover below Rs.5 million and whose annual utility bill (including electricity
, gas and telephone) does not exceed rupees six hundred thousand}.
Retailers (having value of supplies of over 5 million rupees, in any tax period during
the last 12 months.
A person required under any Provincial or Federal Law to be registered for purpose of
any duty or tax collected or paid as if it were a levy of sales tax, e.g. service providers
like hotels, clubs, caterers, customs agents, ship chandlers, stevedores, courier
services etc.
Persons making zero-rated supplies, including commercial exporter who intends to
obtain sales tax refund against his zero rated supplies.
A person who is required to be registered by virtue of aforesaid criteria, but still
avoids registration, can be compulsorily registered by the department, after proper
enquiry, under sub rule 1 of Rule 6 of Sales Tax Rules, 2006.

DOCUMENT ALONG WITH APPLICATION OF REGISTRATION:

Under the new procedure to get registration for sales tax an applicant is required to submit
through the computerized system the following documents, namely:

Sales tax registration

a) CNIC of all owners, members, partners or directors, as the case may be, and the
representative, if any, and in case of non-residents, their passports;
b) in case of a company or registered AOP, the Registration or Incorporation Certificate,
along with Form III or Form A as prescribed in the Companies Ordinance, 1984
c) in case of a partnership, the partnership deed;
d) bank account certificate issued by the bank in the name of the business;
e) lease or rent agreement, if the premises is on rent, along with CNIC of the owner of
the premises;
f) ownership documents of the premises, such as registered sale deed or registered
transfer deed;
g) latest utility bills (electricity, gas, land-line telephone, and post-paid mobile phones,
as the case may be);
h) list of machinery installed in case of manufacturer;
i) distribution certificate from the principal showing distributorship or dealership, in
case of distributor or dealer;
j) balance sheet/statement of affairs/equity of the business;
k) particulars of all branches in case of multiple branches at various locations; and
1. Particulars of all franchise holders in case of national or international franchise.
The FBR said that the applicant being the owner, authorized member or partner or
authorized director, as the case may be, shall visit the concerned RTO for biometric
verification along with all those documents specified under sub-rule.
2. Which have not been submitted through computerized system.
3. Subject to sub-rule (2) the applicant shall also submit the following to the
computerized system through the electronic application prescribed by the Board for
the

purpose,

namely:-

(a) GPS-tagged photographs of the business premises, office equipment, electricity

meter and gas meter;
(b) in case of manufacturer, in addition to clause (a), GPS-tagged photographs of
factory premises, machinery, industrial electricity or gas meter installed; and
(c) In case of wholesaler, in addition to clause (a), GPS-tagged photographs of the
business premises and go-down.
4. Incomplete applications shall not be entertained by the computerized system.
5. Where an applicant has unsold or unused stocks of tax-paid inputs on which he
desires to claim the benefit of section 59 of the Act, he shall declare such stocks in a
statement in the Form set out as STR-4, to be appended with his application for
registration.
6. The application shall be processed by the computerized system and if found complete
in all respects, shall be assigned a risk score. In case the application is found low risk,

Sales tax registration

registration shall be issued by the computer system and certificate shall be sent to the
applicant by courier service. The high risk cases shall, for further inquiry and scrutiny
of documents, be sent to the Commissioner Inland Revenue, designated in the RTO
for the purpose.
7. Where a person, who has furnished a Form for registration, discovers any omission or
wrong statement therein, or notices a subsequent change in any information,
particulars, annexures, statements, documents or data already furnished, he may,
without prejudice to any liability incurred by him under any provision of the Act,
furnish a revised Form for registration.
8. In case the person applying for registration as manufacturer is sharing the premises,
he shall provide evidence of
(a) Demarcation of manufacturing premises for registration, and
(b) Installation of sub-meter by the relevant utility company, in case he does not have
independent industrial utility connection but is using electricity or gas through submeter.