SALES TAX CIRCULAR NO. 3 OF 1991,

DATE 28^th DECEMBER , 1991

SUBJECT:--  CHARGEABILITY OF SALES TAX ON SECOND HAND BALING HOOPS.

A question has arisen about the taxability or otherwise of the second hand baling hoops. The issue has been examined in the Board after receipt of representation from various quarters. It has been found that baling hoops classifiable under PCT heading No. 73.26 are manufactured in the re-rolling mills and are mostly purchased by the ginning factories for fastening the cotton bales. Sales Tax is livable at the manufacturing stage in the re-rolling mills. Their cutting or unfastening during opening of the bales at the textile mills does not render them liable to sales tax as opening and cutting out of hoops for the purpose of re-use does not attract the definition of manufacture. As regards the classification of the item in question, it is clarified that it does not fall within the definition of waste and scrap as the explanatory notes to heading No. 72.04 of the harmonized system exclude articles, which with or without repair or renovation can be re-used for their former purpose.

Mr. Rozi Khan Burki

Second Secretary (Sales Tax)