Sales Tax Act, 1990 has explained the meaning of sales tax imposed on supply of goods.
The Sales Tax Act, 1990 [updated up to June 30, 2020 issued by the Federal Board of Revenue (FBR)] has explained the following:
“sales tax” means – –
(a) the tax, additional tax, or default surcharge levied under this Act;
(b) a fine, penalty or fee imposed or charged under this Act; and
(c) any other sum payable under the provisions of this Act or the rules made thereunder;
“sales tax account” means an account representing the double entry recording of sales tax transactions in the books of account.
The concept of sales tax plays a central role in Pakistan’s indirect taxation system and applies to the supply, import, and manufacturing of taxable goods. Under the law, registered persons are required to maintain proper records of sales tax transactions through a sales tax account to ensure transparency and compliance with tax regulations.
The Federal Board of Revenue (FBR) monitors the collection and payment of sales tax through monthly returns and audits. Failure to comply with provisions of the Sales Tax Act, 1990 may result in penalties, default surcharge, and legal action. Sales tax remains one of the major sources of revenue collection for the federal government and contributes significantly to national economic resources.
