05-03-2007, 09:47 PM
Dear XBRL,
I take an example of sales tax paid on imports by an exporter. The export sales have been zero rated under Sales Tax Act 1990 and exporters, upon exporting their final products, take refund of sales tax paid/deposited in respect of all imports and local purchases. Therefore, sales tax paid at the stage of local purchase or import is refundable for exporters and they account for such payment as sales tax receivable (unless the input tax adjustment or refund is prohibited by law. For such items you have to see Sales TAx Act). Therefore, such refundable sales tax do not make part of cost of imported items.
As far as income tax paid at import stage is concerned, it is to be accounted for as ADVANCE INCOME TAX. Such income tax along with other payments of advance tax or withholding tax or tax deducted at source has to be adjusted against the final income tax liability for any given accounting/tax year. Accordingly, this stands as Refundable or adjustable. It is not to be included in the cost of an imported item.
Hope you wud be benefited by this reply.
Regards,
Kamran.
I take an example of sales tax paid on imports by an exporter. The export sales have been zero rated under Sales Tax Act 1990 and exporters, upon exporting their final products, take refund of sales tax paid/deposited in respect of all imports and local purchases. Therefore, sales tax paid at the stage of local purchase or import is refundable for exporters and they account for such payment as sales tax receivable (unless the input tax adjustment or refund is prohibited by law. For such items you have to see Sales TAx Act). Therefore, such refundable sales tax do not make part of cost of imported items.
As far as income tax paid at import stage is concerned, it is to be accounted for as ADVANCE INCOME TAX. Such income tax along with other payments of advance tax or withholding tax or tax deducted at source has to be adjusted against the final income tax liability for any given accounting/tax year. Accordingly, this stands as Refundable or adjustable. It is not to be included in the cost of an imported item.
Hope you wud be benefited by this reply.
Regards,
Kamran.
