ISLAMABAD, Aug 9: The Central Board of Revenue has reduced the minimum value addition to 10 per cent from 15 per cent for the levy of sales tax on purchases of retailers.

The decision was announced through a sales tax notification issued on Monday by amending the Sales Tax Special Procedure Rules, 2004.

A sales tax official told Dawn that to further encourage retailers registration to come under the tax net, it was also decided to exempt them from audit of their past liabilities. The audit would be carried out from the date the retailers got themselves registered with the sales tax department, he added.

He said that initially this scheme would continue for two- three years but on having successful, it might be extended further. According to the notification, a retailer shall pay retail tax on his monthly value addition at the rate specified under sub-section (1) of section 3 of the act provided that the value addition in percentage term shall not be less than 10 per cent of the total value of purchases made during the said period.

A retailer shall issue cash memo for each supply in the form as set out in Annex 'B' and shall maintain record of purchases, indicating description, quantity and value of goods purchased, both excluding sales tax and value inclusive of sales tax, separately and the name and address of the seller.

The government had announced a special procedure for payment of retail tax during the budget 2004-05. Although the retailers were not satisfied with the prescribed value addition for the determination of sales tax liability and audit of the previous records.