Comrehensive sales tax 7 2-14

Sales Tax
Sr. No

Term

Definition

1

Title

Sales Tax Act 1990

2

Effective

With effect from 01-11-1990

3

Levy on

Sales, importation, exportation, Production, Manufacture and
consumption of Goods

4

Rate

17%

Definitions
Sr. No

Term

Section

Definition

1

Appellate
Tribunal

2(1)

As defined in Income Tax Ordinance 2001

2

Arrear

2(2A)

Means, on any day, the amount of sales tax due and
payable by a person under the S.Tax Act 1990
before that day but which has not yet been paid

3

Banking
Company

2(3AA)

As defined in Banking Companies Ordinance 1962

4

BOrad

2(4)

FBR

Definitions
Sr. No

Term

Section

Definition

5

Company

2(5AA)

As defined in companies ordinance 1984

6

Cottage
Industry

2(5AB)

A manufactures whose
Annual turnover does not exceeds Rs. 5,000,000
Annual Utility bills does not exceeds Rs. 700,000

7

Crest

2(6)

Means the computerized programs for analyzing and
cross matching of sales tax returns.

8

Due Date

2(9)

15th day of the month following the end of the tax
period and tax period is a period of one month

Definitions
Sr. No

Term

Section

Definition

9

Input Tax

2(14)

Input Tax Means
1.
The tax levied on the supply of goods to the person.
2.
The tax levied on the import of goods
3.
Goods or services acquired by the persons, Excise
duty levied under Federal Excise Act, 2005 in sales
tax mode on manufacture or production of goods or
rendering the services
4.
The provincial sales tax levied on services rendered
or provided to the person
5.
Tax levied on supplies in the state of Azad Jammu
and Kashmir

10

Output Tax

2(21)

Output Tax means
1.
Tax levied on supply of goods made by that person
2.
Excise duty levied under Federal Excise Act, 2005 in
sales tax mode on manufacture or production of
goods or rendering the services by the persons
3.
The provincial sales tax levied on services rendered
or provided by the person

Definitions

Sr. No

Term

Section

Definition

11

Retail Price

2(27)

A price fixed by the manufacturer inclusive of all
duties, taxs other than Sales Tax

12

Sales Tax

2(29)

Means
1.
The tax, additional tax or default surcharge
levied under S.T Act 1990
2.
A fine, penalty or fee imposed under S.Tax act
1990
3.
Any other sum payable under the provision of
said act

13

Supply

2(32)

Means
1.
Sale or transfer under a hire purchase
agreement
2.
Use of goods in the course of taxable actuvity
3.
Auction or disposal of goods to satisfy a debt
owed by a person
4.
Possession of taxable goods held immediately
before a person ceases to be a registered
person

Definitions
Sr. No

Term

Section

Definition

14

Tax Invoice

2(40)

Means a document rquired to be isued while making taxale
supply. Invoice shall contain
1.
Serial Number
2.
Name, address and reg No of the supplier
3.
Name, address and reg No of the recipient
4.
Date of issue
5.
Description and quantity of goods
6.
Value before tax
7.
Amount of sales tax
8.
Value inclusive of sales tax

Difference Between Exempt and Zero rated Supply
Sr. No

Point

Exempt Supply

Zero Rated
Supply

1

Taxability

Not taxable

Taxable

2

Registration under sales tax Act

Not Required

Required

3

Credit of Input Tax

Not Allowed

Allowed

4

Maintenance of records under sales Tax act

Not Required

Compulsory

5

Filing of Return

Not Required

Required

Sales Tax Authorities
(1) There shall be the following Sales Tax authorities for the
purposes of this Act and rules made hereunder, namely:—
1. Chief Commissioner Inland Revenue (CCIR);
2. Commissioner Inland Revenue (CIR);
3. Commissioner Inland Revenue (Appeals);
4. Additional Commissioner Inland Revenue;
5. Deputy Commissioner Inland Revenue;
6. Assistant Commissioner Inland Revenue;
7. Inland Revenue Officer;
8. Inland Revenue Audit Officer;
9. Superintendent Inland Revenue;
10. Inspector Inland Revenue; and
11. Officer of inland Revenue with any other Designation

Sales Tax Authorties
Sr. No

Tax Authorities

Subordinate to

1

Chief Commissioner
Commissioner Appeals

Federal Board of Revenue

2

Commissioner

Chief Commissioner

3

•
•
•
•
•
•
•
•

Additional Commissioners
Deputy commissioners
Assistant Commissioners
Inland Revenue Officer
Inland Revenue Audit Officer
Superintendents
Auditors
Inspectors

Commissioner

4

•
•
•
•
•
•
•

Deputy commissioners
Assistant Commissioners
Inland Revenue Officer
Inland Revenue Audit Officer
Superintendents
Auditors
Inspectors

Additional Commissioners

Computation of Sales Tax Liability
Sr No

Description

1

Output Tax on
•Taxable Supplies
•Zero rated supplies
•Supply to DTRE registered Person
•Exempt supplies (not taxable)

xxx
xxx
xxx
-

Less
Input Tax
•Taxable imports
•Taxable supplies
•Tax paid on utilities
•Zero rated purchases
•Exempt purchases

xxx
xxx
xxx
xxx
-

2

3

Sales Tax for the Tax Period (1-2)

4

Add
Arrear of tax
Default surcharge
Penalties

Rs

5

Less
Input tax carried forward from previous tax period
Unclaimed input tax from six pervious tax years
Net Tax Liabilty for the tax period (5-6)

(XXXX)
XXXX

xxx
xxx
xxx

Total Tax (3+4)

6

XXXX

XXXX
XXXX

xxx
xxx

XXXX
XXXX

Computation of Sales Tax Liability
Note:
According to section 8B(1) a registered person
can claim credit of input tax maximum upto
90% of output tax for a tax period. Under
such a case, if input tax is more than the
output tax even then a registered person
has to pay 10% of output tax.

RETURNS
(1) Every registered person shall furnish not later than the due date a
true and correct return in the prescribed form to a designated bank
or any other office specified by the Board, indicating the purchases
and the supplies made during a tax period, the tax due and paid and
such other information, as may be prescribed:
Provided that the Board may, by notification in the official Gazette,
require any person or class of persons to submit return on quarterly
basis:
Provided further that the Board may, by notification in the official
Gazette, require any person or class of persons to submit such
return as may be prescribed annually in addition to the monthly
return or quarterly return:
Provided also that the return filed electronically on the web or any
magnetic media or any other computer readable media as may be
specified by the Board shall also be deemed to be a return for the
purpose of sub-section (1) and the Board may, by notification in the
official Gazette, make rules for determining eligibility of the data of
such returns and e-intermediaries who will digitize the data of such
returns and transmit the same electronically under their digital
signatures.

RETURNS
(2) If there is a change in the rate of tax during a tax period,
a separate return in respect of each portion of tax period
showing the application of different rates of tax shall be
furnished.
(3) A registered person may, subject to approval of the
1Commissioner Inland Revenue having jurisdiction, file a
revised return within one hundred and twenty days of the
filing of return under sub-section (1) or, as the case may
be, sub-section (2), to correct any omission or wrong
declaration made therein.
(4) Notwithstanding the penalties prescribed in section 33, if
a registered person wishes to file revised return
voluntarily along with deposit of the amount of tax short
paid or amount of tax evaded along with default
surcharge, whenever it comes to his notice, before
receipt of notice of audit, no penalty shall be recovered
from him:

RETURNS
(5) The Board may, by notification in the
official Gazette, require any person or
class of persons, for any goods of
such description or class, to furnish
such summary or details or particulars
pertaining to the imports, purchases
and supplies during any tax period or
periods, in such format as may be
specified.

Special Returns.
In addition to the return specified under section 26-(a) a person registered (***) under this Act shall furnish
special return within such date and in such form
indicating information such as quantity manufactured
or produced, purchases made, goods supplied or
payment of arrears made, etc, for such period as the
Board may, by a notification in official gazette, specify;
and

(b) the commissioner may require any person
whether, registered or not, to furnish a return
(whether on his own behalf or as an agent or
trustee) in a prescribed form and such person
shall furnish the return not later than the date
specified in this regard.

Final Return
If a person applies for de-registration in
terms of section 21, he shall before such
de-registration, furnish a final return to the
1commissioner in the specified form in
such manner and at such time as directed
by the commissioner.

Offences and penalties
Whoever commits any offence described in
column (1) of the Table below shall, in
addition to and not in derogation of any
punishment to which he may be liable under
any other law, be liable to the penalty
mentioned against that offence in column (2)
thereof

Sr. No

Offences

Penalty

Section of the
Ordinance to
which offence
has reference
26

Where any person fails
to furnish a return within
the due date.

Such person shall pay a penalty of five thousand rupees:
Provided that in case a person files a return within fifteen
days of the due date, he shall pay a penalty of one hundred
rupees for each day of default.

Any person who fails to
issue an invoice when
required under this Act.

Such person shall pay a penalty of five thousand rupees or
three per cent of the amount of the tax involved, whichever
is higher.

23

1

2

Sr. No

Offences

Penalty

Section of the
Ordinance to
which offence
has reference

3

Any person who unauthorizedly issues an
invoice in which an
amount of tax is
specified.

Such person shall pay a penalty of ten thousand rupees
or five per cent of the amount of the tax involved,
whichever is higher.

3,7,23

4

Any person who fails
to notify the changes
of material nature in
the particulars of
registration of taxable
activity.

Such person shall pay a penalty of five thousand
rupees.

14

Sr. No

Offences

Penalty

Section of the
Ordinance to
which offence
has reference

5

deposit the amount of
tax due or any part
thereof in the time or
manner laid down under
this Act or rules or
orders made there
under.

Such person shall pay a penalty of ten thousand rupees or
five per cent of the amount of the tax involved, whichever is
higher:
Provided that, if the amount of tax or any part thereof is paid
within fifteen days from the due date, the defaulter shall pay
a penalty of five hundred rupees for each day of default:
Provided further that no penalty shall be imposed when any
miscalculation is made for the first time during a year:
Provided further that if the amount of tax due is not paid
even after the expiry of a period of sixty days of issuance of
the notice for such payments by an officer of 1Inland
Revenue, not below the rank of Assistant 2Commissioner
Inland Revenue, the defaulter shall, further be liable, upon
conviction by a Special Judge, to imprisonment for a term
which may extend to three years, or with fine which may
extend to amount equal to the amount of tax involved, or
with both.

3,6,7,48

Sr. No

Offences

6

Any person who repeats
erroneous calculation in
the return during a year
whereby amount of tax
less than the actual tax
due is paid.

7

Any person who is
required to apply for
registration under this
Act fails to make an
application for
registration before
making taxable
supplies.

Penalty

Such person shall pay a penalty of five thousand rupees or
three per cent of the amount of the tax involved, whichever
is higher.

five per cent of the amount of tax involved, whichever is
higher:
Provided that such person who is required to get himself
registered under this Act, fails to get registered within sixty
days of the commencement of taxable activity, he shall,
further be liable, upon conviction by a Special Judge, to
imprisonment for a term which may extend to three years, or
with fine which may extend to an amount equal to the
amount of tax involved, or with both.

Section of the
Ordinance to
which offence
has reference
7,26

14

Sr. No

Offences

8

maintain records
required under this Act
or the rules made there
under.

Penalty

five per cent of the amount of tax involved, whichever is
higher.

Section of the
Ordinance to
which offence
has reference
22,24

Sr. No

Offences

9

Where a registered
person who, without any
reasonable cause, in
non compliance with the
provisions of section 25,
—
(a) fails to produce the
record on receipt of first
notice;
(b) fails to produce the
record on receipt of
second notice; and
(c) fails to produce the
record on receipt of
third notice.

Penalty

Section of the
Ordinance to
which offence
has reference
25

such person shall pay a penalty of five thousand rupees;

such person shall pay a penalty of ten thousand rupees;
and

such person shall pay a penalty of fifty thousand rupees.

Sr. No

Offences

10

furnish the information
required by the Board
through a notification
issued under subsection (5) of section
26.

Penalty

Section of the
Ordinance to
which offence
has reference
26

Such person shall pay a penalty of ten thousand rupees.

Sr. No

11

Offences

Any person who,—
(a) submits a false or
forged document to any
officer of sales tax; or
(b) destroys, alters,
mutilates or falsifies the
records including a sales
tax invoice; or
(c) Knowingly or
fraudulently makes false
statement, false
declaration, false
representation, false
personification, gives any
false information or issues
or uses a document which
is forged or false.

Penalty

Section of the
Ordinance to
which offence
has reference

Such person shall pay a penalty of twenty five thousand
rupees or one hundred per cent of the amount of tax
involved, whichever is higher. He shall, further be liable,
upon conviction by a Special Judge, to imprisonment for
a term which may extend to five years, or with fine which
may extend to an amount equal to the loss of tax
involved, or with both.

2 (37) and
General

Sr. No

Offences

Penalty

Section of the
Ordinance to
which offence
has reference

12

Any person who denies or
obstructs the access of an
authorized officer to the
business premises,
registered office or to any
other place where records
are kept, or otherwise
refuses access to the
stocks, accounts or records
or fails to present the same
when required under
section 25, 38 38A or 40B.

a term which may extend to three years, or with fine
which may extend to an amount equal to the amount of
tax involved, or with both.

25, 38 38A or
40B.

Sr. No

Offences

Penalty

Section of the
Ordinance to
which offence
has reference

13

Any person who commits,
causes to commit or
attempts to commit the tax
fraud, or abets or connives
in commissioning of tax
fraud.

a term which may extend to five years, or with fine which
may extend to an amount equal to the loss of tax

2 (37)

Sr. No

Offences

Penalty

Section of the
Ordinance to
which offence
has reference

14

Where any person violates
any embargo placed on
removal of goods in
connection with recovery of
tax.

rupees or ten per cent of the amount of the tax involved,
whichever is higher. He shall, further be liable, upon
conviction by a Special Judge, to imprisonment for a
term which may extend to one year, or with fine which
may extend to amount equal to the amount of tax

48

Sr. No

Offences

Penalty

Section of the
Ordinance to
which offence
has reference

15

Any person who obstructs
the authorized officer in the
performance of his official
duties.

involved, whichever is higher.

31 and general

16

make payment in the
manner prescribed under
section 73 of this Act.

Such person shall pay a penalty of five thousand rupees
or three per cent of the amount of tax involved,

73

Sr. No

Offences

Penalty

Section of the
Ordinance to
which offence
has reference

17

fulfil any of the conditions,
limitations or restrictions
prescribed in a Notification
issued under any of the
provisions of this Act.


71 and General

18

Where any officer of Sales
Tax authorized to act under
this Act, acts or omits or
attempts to act or omit in a
manner causing loss to the
sales tax revenue or
otherwise abets or
connives in any such act.

Such officer of Inland Revenue shall be liable, upon
conviction by a Special Judge, to imprisonment for a
term which may extend to three years, or with fine which
may extend to amount equal to the amount of tax

General

Sr. No

Offences

Penalty

Section of the
Ordinance to
which offence
has reference

19

Any person who
contravenes any of the
provision of this Act for
which no penalty has,
specifically, been provided
in this section.


General

21

Where any person repeats
an offence for which a
penalty is provided under
this Act

Such person shall pay twice the amount of penalty
provided under the Act for the said offence

General

Sr. No

Offences

Penalty

Section of the
Ordinance to
which offence
has reference

Any person who,(a) knowingly and without lawful authority gains
access to or attempts to gain access to the
computerized system; or
(b) unauthorizedly uses or discloses or publishes
or otherwise disseminates information obtained
from the computerized system; or
(c) falsifies any record or information stored in the
computerized system; or
(d) knowingly or dishonestly damages or impairs
the computerized system; or
(e) knowingly or dishonestly damages or impairs
any duplicate tape or disc or other medium on
which any information obtained from the
computerized system is kept or stored; or
(f) unauthorizedly uses unique user identifier of any
other registered user to authenticate a
transmission of information to the computerized
system; or
(g) fails to comply with or contravenes any of the
conditions prescribed for security of unique user
identifier.

Such person shall pay a penalty
of twenty-five thousand rupees
or one hundred per cent of the
amount of tax involved,
whichever is higher. He shall,
further be liable, upon conviction
by the Special Judge, to
imprisonment for a term which
may extend to one year, or with
fine which may extend to an
amount equal to the loss of tax
involved, or with both.”;

50 A

REGISTRATION
Under this Act, registration will be required
for such persons and be regulated in such
manner and subject to rules as the Board
may, by notification in the official Gazette,
prescribe.

De-registration, blacklisting and suspension of
registration.—

(1) The Board or any officer, authorized in this
behalf, may subject to the rules, de-register a
registered person or such class of registered
persons not required to be registered under this
Act.
(2) Notwithstanding anything contained in this Act,
in cases where the 1Commissioner is satisfied
that a registered person is found to have issued
fake invoices or has otherwise committed tax
fraud, he may blacklist such person or suspend
his registration in accordance with such
procedure as the Board may, by notification in
the official Gazette, prescribe.

REGISTRATION, COMPULSORY
REGISTRATION AND DE-REGISTRATION
Application. — The provisions of this Chapter shall apply to the
following persons,
namely:-(a) a person required to be registered under the Act;
(b) 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 sales tax
under the
Act;
(c) a person who is subject to compulsory registration;
(d) a person who is already registered and requires a change in the
name, address or
other particulars of registration;
(e) a person who is blacklisted or whose registration is suspended; and
(f) a person who is required to be de-registered.

Requirement of registration
The following persons engaged in making of taxable supplies in Pakistan
(including zero-rated supplies) in the course or furtherance of any
taxable activity carried on by them, if not already registered, are
required to be registered in the manner specified in this Chapter,
namely:-(a) a manufacturer not being a cottage industry;]
(b) a retailer whose value of supplies, in any period during the last twelve
months exceeds five million rupees;
(c) an importer;
(d) a wholesaler (including dealer) and distributor;
(e) 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
(f) a commercial exporter, who intends to obtain sales tax refund against
his zero-rated supplies.

Application for registration.
(1) A person required to be registered under the Act shall, before
making any taxable supplies, apply to the CRO, through electronic
means as provided by the Board or otherwise, through owner,
member or director, as the case may be. Such application shall be
made in the Form STR-l, as annexed to these rules, transmitted to
the CRO electronically or through registered mail or courier service.
Such application will specify the Collectorate in whose jurisdiction
the registration is sought, as per criteria given below, namely:-(a) in case of a corporate person, that is, a listed public limited company
or an unlisted public limited company or a private limited company,
the area where the registered office is located;
(b) in case of a person not incorporated, the area where the business is
actually carried on; and
(c) in case of a person not incorporated, having a single manufacturing
unit, whose business premises and manufacturing unit are located in
different areas, shall apply for registration in the Collectorate of the
area in whose jurisdiction his manufacturing unit is located:
Provided further that a corporate person shall have the option to apply
for transfer of registration to the Collectorate having jurisdiction
where the place of business is located.

Application for registration.
(2) Where an applicant has unsold or un-used stocks of tax-paid Inputs
on which he desires to claim the benefit of section 59 of the Act, he
shall declare such stocks in a statement in the Form set out as STR4, to be appended with his application for registration.
(2a) CRO may cause further inquiry from the applicant through LRO or
otherwise including issuance of Objection Slip.
(3) On completion of such verification or inquiry, through LRO or
otherwise, as the CRO deems necessary, it may register the
applicant and issue a certificate of registration containing the
registration number of the applicant in the Form as set out in the
Form STR-5, or reject the application within fifteen days from the
date complete application is received in the CRO, under intimation to
the applicant, specifying the reasons for such rejection.
(4) A person who has applied for registration as manufacturer shall be
registered after LRO has verified his manufacturing facility.
(5) In no case, a person required to be registered under the Act shall be
issued more than one registration number.

Compulsory registration
(1) if a person, who is required to be registered under this Act, does not
apply for registration and the LRO or any other office as may be
authorized by the Board or the Collector, after such inquiry as
deemed appropriate, is satisfied that such person is required to be
registered, it shall issue notice to such person in the Form set out in
the Form STR-6.
(2) In case the LRO receives a written reply from the said person within
the time specified in notice, contesting his liability to be registered,
the LRO shall grant such person opportunity of personal hearing, if
so desired by the person, and shall thereafter pass an order whether
or not such person is liable to be registered compulsorily. Copy of
the said order shall invariably be provided to that person.
(3) Where the person to whom a notice is given under sub-rule (2), does
not respond within the time specified in the notice, the LRO shall
transmit the particulars of the person to the CRO, which shall
compulsorily register the said person and allot him a registration
number which shall be delivered to the said person either in person
through LRO or through registered mail (acknowledgement due) or
through courier service.

Compulsory registration
(4) A person registered compulsorily as aforesaid, is required to comply
with all the provisions of the Act and rules made thereunder from the
date of compulsory registration, and in case of failure to do so, the
Collector of Sales Tax having jurisdiction may issue notice under
section 25 of the Act for production of records or documents and
appearance in person to assess the amount of sales tax payable
under section 11 of the Act, and take any other action as required
under the law against such person:
Provided that if it is subsequently established that a person was not
liable to be registered but was wrongly registered under .this rule
due to inadvertence, error or misconstruction, the CRO, shall cancel
his registration. In case of such cancellation of registration, such
person shall not be liable to pay any tax, default surcharge or
penalty under the Act or rules made thereunder, subject to the
conditions, limitations and restrictions prescribed under section 3B of
the Act.

Change in the particulars of registration.
(1) In case there is a change in the name, address
or other particulars as stated in the registration
certificate, the registered person shall notify the
change in the 23[Form STR-l] to the CRO, within
fourteen days of such change.
(2) The change of business category as
'manufacturer' shall be allowed after LRO has
verified the manufacturing facility and confirmed
the status as industrial consumer of the
electricity and gas distribution companies.
(3) In case of approval of the change applied for,
the CRO shall issue revised registration
certificate, which will be effective from the date
the concerned person has applied for the
change.

Transfer of registration
(1) The CRO may, subject to such conditions, limitations or restrictions
as it may deem fit to impose, by an order, transfer the registration of
a registered person from the jurisdiction of one Collectorate to
another Collectorate or, as the case may be, to the LTU or RTO.
(2) On transfer of registration,-(a) all the records and responsibilities relating to such registered person
shall be transferred to the Collectorate or, as the case may be, to the
LTU or RTO, in whose jurisdiction the registration has been so
transferred;
(b) notwithstanding the actions already taken, being taken or otherwise
pending immediately before the transfer in respect of such
registered person under any of the provisions of the Act or the rules
made thereunder in the Collectorate from where his registration has
been transferred, the Collectorate, or as the case may be, the LTU
or RTO, in whose jurisdiction the registration is so transferred shall
exercise the jurisdiction over such person in the manner as if it
always had such jurisdiction and]

Transfer of registration
(c) the return for the tax period in which the registration is
transferred shall be filed in the Collectorate from where
the registration is transferred.
(3) In case of transfer of registration, the CRO shall issue
intimation letter to the registered person along with copy
to concerned Collectorates, or as the case may be the
Large Taxpayers Unit or RTO.
(4) In case a registered person intends to shift his business
activity from the jurisdiction of one Collectorate to
another, or he has any other valid reason for such
transfer, he shall apply to the CRO for transfer of his
registration along with Form STR-I. The CRO shall follow
the procedure as per sub-rules (2) and (3).

Option to file application with LRO.

The person applying for registration, changes
in particulars of registration or transfer of
registration, may, in exceptional cases
where he is not able to send such
application directly to CRO, file the
prescribed application in LRO, instead of
filing the same in CRO. In such case LRO
shall forward the same to CRO within
three days and the Collector concerned
shall ensure that such application is
transmitted to CRO within the stipulated

De-registration.
(1) Every registered person who ceases to carry on
his business or whose supplies become exempt
from tax, shall apply to the LRO for cancellation
of his registration in Form STR-3, and the LRO,
on such application or on its own initiative may
recommend to the CRO to cancel the
registration of such person from such date as
may be specified, but not later than three months
from the date of such application or the date all
the dues outstanding against such person are
deposited by him, whichever is the later

De-registration.
(2) A registered person whose total taxable turnover during the last
twelve months remains below the limit specified in rule 4, may apply
to the LRO for de-registration in Form STR-3 or the Collector may,
on his initiative, start proceedings for his de-registration.
(3) The Local Registration Office, upon completion of any audit or inquiry
which may have been initiated consequent upon the application of
the registered person for de-registration, shall direct the applicant to
discharge any outstanding liability which may have been raised
therein by filing a final return under section 28.
(4) If a registered person fails to file tax return for six consecutive
months, the LRO may, without prejudice to any action that may be
taken under any other provision of the Act, after issuing a notice in
writing and after giving an opportunity of being heard to such person,
recommend to the CRO for cancellation of the registration after
satisfying itself that no tax liability is outstanding against such
person.
(5) The obligations and liabilities of the person whose registration is
cancelled under sub-rule (1) relating to the period when he
conducted business as a registered person shall not be affected by
the fact that his registration has been cancelled or that he has
ceased to be a registered person.

Blacklisting and suspension of registration
(1) Where the Collector has reasons to believe that a
registered person is found to have committed tax fraud or
evaded tax or has failed to deposit the tax due on his
supplies despite having recovered it from the respective
buyers or recipients of such supplies, he may suspend
his registration through an order in writing and initiate
such inquiry, as deemed appropriate.
(2) After such inquiry and investigation to confirm the facts
and veracity of the information and after giving an
opportunity to such person to clarify his position, the
Collector, if satisfied that such person has committed any
of the offences as aforesaid, may blacklist such person
through an order in writing, and such blacklisting shall be
without prejudice to any other action that may be taken
against such person under the Act and the rules made
there under.

(3) The inquiry in such cases shall be completed
within ninety days, and show cause notice for
recovery of any evaded amount of tax and for
contravention of the provisions of the Act may be
issued within the period specified under section
36 of the Act:
Provided that where the records required for
completion of the inquiry are not produced by the
blacklisted person or a person whose
registration has been suspended or by the
suppliers of such person, the period of ninety
days for completion of the inquiry shall be
deemed to have been extended by a further
period of ninety days,

(4) The order for blacklisting or suspending the
registration of a registered person shall be
communicated to such person, the CRO and to
the Central Sales Tax database provided for this
purpose.
(5) During the period of suspension of registration,
the invoices issued by such person shall not be
entertained for the purposes of sales tax refund
or input tax credit, and once such person is
blacklisted, the refund or input tax credit claimed
against the invoices issued by him, whether prior
or after such blacklisting, shall be rejected
through a self-speaking appealable order and
after affording an opportunity of being heard to
such person.

Comrehensive sales tax 7 2-14

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