Government
of Pakistan
Revenue
Division
......
F.No.1(43)STR/99
Islamabad, the 14th September, 1999.
CIRCULAR
NO. 2/99
SUBJECT: DEVELOPMENT TAX
In pursuance of unanimous decisions taken in the meetings with representatives
of trade community held on the 8th and 9th September, 1999, it has been decided
that the shopkeepers and retailers, other than a private limited company or a
public limited company, whose annual turnover during the last 12 months was less
than Rs.5 million shall, in lieu of 2% turnover tax payable under section 3A of
the Sales Tax Act, 1990 and 1% Income Tax payable under Income Tax Ordinance,
1979, pay, in the manner hereinafter provided, the sum (known as Development
Tax) at the rate of 0.75% of the turnover on all supplies except the food items
( listed in Appendix-I to this Circular) on which the rate of Development Tax
shall be 0.5%(Development Tax Scheme).
2.
The Development Tax shall be payable across the board and shall be compulsory
for all shopkeepers and retailers whose annual turnover does not exceed Rs.5
million. There shall be no exemption in relation to description of goods or
quantum of turnover below the said threshold of Rs.5 million.
3.
The Development Tax shall be payable w.e.f. 16th September, 1999 and shall
remain in force upto the 30th June, 2001.
4.
The shopkeepers and retailers with annual turnover of less than Rs.5 million
shall have the option to get them registered under the Sales Tax Act and pay GST
@ 15% under the normal VAT regime. 2
5.
The Development Tax shall be paid quarterly in any of the branch of the National
Bank of Pakistan through a challan (Appendix-II), payable by the last working
day of September, December, March and June for the quarters ending 15th
September, 15th December,
15th March and 15 th
June.
6.
The collection of the Development Tax shall be enforced and monitored by a
Development Tax Advisory Committee comprising six members from each Province and
two members from the Federal Capital Territory. The Development Tax Advisory
Committee shall, initially, meet every month to ensure proper compliance and
implementation of the Development Tax Scheme. The Committee may form Provincial,
Divisional, District, City/Town and Market Committees for the purpose of the
enforcement, collection and monitoring of the Development Tax.
7. The Development Tax Scheme shall not affect the following:-
(a) the normal GST regime which
shall remain in force for the manufacturers, importers, wholesalers (including
dealers), distributors (including stockists), suppliers and such shopkeepers and
retailers whose annual turnover exceeds Rs.5 million;
(b) the persons not registered
under the normal GST regime shall continue to pay further tax @ 3% under section
3(1A) of the Sales Tax Act, 1990, in addition to the standard rate of 15% on
taxable supplies made to them;
(c) the persons not registered
under the normal GST regime shall not be allowed to claim any input sales tax
credit/adjustment/refund, etc;
(d) the persons not registered
under the normal GST regime shall not be allowed to issue the prescribed sales
tax invoices; and
(e) the right of a taxpayer,
under the Sales Tax Act, 1990, to opt for sales tax registration for payment of
sales tax at standard rate in a normal VAT-mode, instead of payment of
Development Tax. 3
8.
Payment of Development Tax shall discharge all income tax and sales tax
liabilities of the shopkeepers and retailers with annual turnover of less than
Rs. 5 million (without any adjustments/credits/refunds). Persons paying
Development Tax shall be immune from visit, inspection and audit by the Income
Tax and the Sales Tax Departments.
9.
All issues relating to Development Tax shall be resolved by the Development Tax
Advisory Committee.
__________________________________________________________________________________________
Appendix-I
(See
para 1 of the Circular)
LIST
OF FOOD ITEMS
1.
Live animals.
2.
Agricultural produce of Pakistan not subjected to any process of manufacture.
3.
Cereals, grains and pulses, whether or not milled, hulled or polished, packed or
not.
4.
Vegetables and fruits and juices.
5.
Eggs.
6.
Poultry, mutton, beef, fish and bovine animal meat, (except those sold under
brand name or trade mark).
7.
Fresh or dried milk, plain yogurt and lassi.
8.
Cream, whey, butter and cheese except those sold under brand names or trade
marks.
9.
Breads, nans, chapattis, sheer malls, bun, rusk, vermicillis.
10.
Ice and water excluding mineral waters.
11.
Desi ghee, vegetable ghee and vegetable oils.
12.
Cooked and prepared foodstuff subject to central excise duty or sales tax in
hotels,restaurants, clubs, catering houses, etc.
___________________________________________________________________________________________
Appendix-II
[See Para 5 of the Circular]
DEVELOPMENT
TAX CHALLAN (in Quintuplicate)
PART-I
(01)
TAX PERIOD
Quarter Year
(02)
NAME AND ADDRESS
(03)
N.I.C. No.
(04) N.T.N. (if any)
(05) SALES TAX ENROLMENT (if any)
(06)
SALES :
VALUE(Excld. Tax)
Dev. Tax
Total
(3) + (4)
Food items other
than at
0.5% at
0.75%
in
in