ISLAMABAD: The Federal Board of Reve­nue has notified rules for registration of persons as registered sales tax payers.

A sales tax general order no 68 of 2014 issued here has clarified the conditions mandatory for registration of persons under the sales tax act 1990.

The persons engaged in making of taxable supplies in Pakistan, including zero-rated supplies in the course or furtherance of any taxable activity carried by them, if not already registered, were required to be registered in the prescribed manners.

They are: a manufacturer not being cottage industry; a retailer whose value of supplies, in any period during the last 12 months exceeds Rs5 million; an importer; a wholesaler (including dealer) and distributor; a person required, under any other federal law or provincial law, to be registered for the purpose of any duty or tax collected or paid as if it were a levy of sales tax to be collected under the Act and a commercial exporter, who intends to obtain sales tax refund against his zero-rated supplies.

Under section 2(47) of the Sales Tax Act, 1990, a wholesaler (including dealer) was defined as to also include such person, who was supplying taxable goods to a person who deducts income tax at source under the income tax ordinance, 2001.

In other words, every person making supplies of taxable goods, any person, who deducts income tax at source falls within the definition of wholesaler and all such wholesalers are required to be registered in terms of rule 4 of the sales tax rules, 2006.

The general order further said that all such persons registered under the sales tax act are prescribed persons (withholding agents) for the purpose of withholding/deduction of income tax, and thus every person making supplies to such prescribed persons/withholding agents falls within the definition of wholesaler or dealer.

As a result, all such wholesalers or dealers are liable to be registered under the sales tax act.

Published in Dawn, August 19th, 2014