GST

[ali.amjad.pk]

AOA,

If ABC pvt ltd. is not sales tax registered firm, it has to pay its vendors for supplies and if vendors do not deduct GST, is there any harm in making payment through abc company account excluding GST to vendors.

What would be its implications legally. How to resolve such issues. While filing return of income tax abc company is allowed to deduct such purchases (without GST) as expenses or not?

Your input is highly appreciated.

Best Regards
ALI AMJAD

[student_of_law]

As far as I understand the sales tax law, generally, it is duty of person making supplies to pay tax. [s.3(3)]of the Sales Tax Act, 1990]

A person at receiving end has no liability in this regard except specifically imposed under s.3(3-A) of the Sales Tax Act, 1990] by the Board.

Regarding deduction of expenses of purchases, for income tax purpose, where GST has not been paid, deductions not allowed are mentioned in s.21 of the Income Tax Ordinance ,2001. This section no where says that deduction shall not be allowed in respect of purchases where GST has not been paid. So you are entitled to deduction in respect of purchases on which your supplier has not paid sales tax.