KARACHI: The sales tax law has explained application of sales tax on taxable activity or transfer of ownership.
According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR) the law explained the sales of taxable activity or transfer of ownership.
Section 49: Sales of taxable activity or transfer of ownership
Sub-Section (1): In case of termination of taxable activity or part thereof or its sale or transfer of ownership to a non-registered person, the possession of taxable goods or part thereof by the registered person shall be deemed to be a taxable supply and the registered person shall be required to account for and pay the tax on the taxable goods held by him:
Provided that if the tax payable by such registered person remains unpaid, the amount of unpaid tax shall be the first charge on the assets of the business and shall be payable by the transferee of business.
(2) In the case of sale or transfer of ownership of a taxable activity or part thereof to another registered person as an ongoing concern, the taxable goods or part thereof shall be transferred to the new owner through a zero-rated invoice and the sales tax chargeable thereon shall be accounted for and paid by the registered person to whom such taxable activity or part thereof is transferred.