Exemption from extension of Federal Taxes to erstwhile FATA/PATA

GOVERNMENT OF PAKISTAN
REVENUE DIVISION
(FEDERAL BOARD OF REVENUE)

Islamabad, the 5th October, 2018.

NOTIFICATION
(SALES TAX)

S.R.O. 1212(I)/2018. - WHEREAS prior to commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018), the Sales Tax Act, 1990, was not in force in the Tribal Areas as defined in Article 246 of the Constitution of the Islamic Republic of Pakistan, hereinafter called as the Constitution, and the levy of sales tax was not attracted to the supply transactions made in the said Tribal Areas;

AND WHEREAS Article 247 of the Constitution stood omitted on commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) with effect from the 31st day of May, 2018 and the Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA) stood merged in the Provinces of Khyber Pakhtunkhwa and Balochistan under paragraph (d) of Article 246 of the Constitution;

AND WHEREAS on commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018), the Sales Tax Act, 1990 is in force in the said Provinces including the erstwhile Tribal Areas forming part thereof;

AND WHEREAS a phased approach was needed for the full application of fiscal laws to the said erstwhile Tribal Areas, a decision was made to exempt all those supplies and transactions from levy of federal taxes which were not applicable to the said areas by virtue of said Article 247 and accordingly three sales tax Notifications No. S.R.O. 888(I)/2018, No. S.R.O. 889(I)/2018 and No. S.R.O. 890(I)/2018, all dated the 23rd July, 2018, were issued by the Federal Government granting exemption from sales tax to the supplies specified therein;

AND WHEREAS concerns were raised by the trading community of the said erstwhile Tribal Areas to the effect that the three aforesaid Notifications did not restore the position as

existed prior to the commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018);

NOW, THEREFORE, in order to address the concerns so raised and to restore the position in relation to levy of sales tax to the said erstwhile Tribal Areas, the Federal Government, in exercise of the powers conferred by clause (a) of sub-section (2) of section 13 of the Sales Tax Act, 1990, is pleased to-

(a) ab-initio rescind its Notifications No. S.R.O. 888(I)/2018, No. S.R.O. 889(I)/2018 and No. S.R.O. 890(I)/2018, all dated the 23rd July, 2018; and

(b) exempt from whole of sales tax, by whatever name called, as levied under the Sales Tax Act, 1990, or notifications issued thereunder, on supplies made till the 30th June 2023, to which the provisions of the said Act of 1990 or the notifications issued thereunder, would have not been applied had Article 247 of the Constitution not been omitted under the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018).

2. This Notification shall take effect on and from the date the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) received assent of the President of the Islamic Republic of Pakistan.

[C. No. 5/94-STB/2018]

(Dr. Muhammad Iqbal)
Additional Secretary