CBR imposes 15pc sales tax on vehicles
By Azhar Mahmood
KARACHI: The Central Board of Revenue (CBR) has imposed 15 per cent sales tax on sale/purchase of new and old cars.
In this regard the CBR has issued an SRO on September 14, 2005 by prescribing special procedure, which will be effective immediately. The SRO would also apply to two wheelers.
Sources said CBR had issued instructions to National Bank of Pakistan - the collecting bank of sales tax - through a letter.
The letter said, "Government of Pakistan has imposed sales tax on sale of new and old vehicles and its parts at both import and local manufacturing stages."
It further said, "This has been decided to overcome the deficiencies in system for collection of sales tax at dealer side involving sale of second hand vehicles."
The letter said under the procedure, the sale of used and second hand vehicle, including individual transfer of registration without the involvement of a dealer, had been made liable to the payment of sales tax.
"The tax shall be deposited with NBP prior to transfer of registration of vehicle."
Each manufacturer, importer and dealer of vehicles, if not registered, will obtain registration from the respective sales tax collector for the purpose of deposit of sales tax.
"The provincial vehicle registration authorities will be required to report the sales tax receipts on monthly basis, to the collector of sales tax," the letter added.
As per SRO each manufacturer, importer and dealer of vehicles shall file monthly return-cum-payment challan and deposit the sales tax by 15th of the following month.
In this regard Sales Tax Department has introduced a new sales tax payment return, which shows five categories of sellers.
Sources said the one-page return has been designed in a such way that Audit of filed return would be carried out on this filed return.