Sales Tax on Exports of Software.

[zurpk]

AOA

I hope that all members are fine. I have some questions about sales which I want to discuss with all of you.

1. A company is exporting software from Pakistan to another country. So I want to know where exports of software are chargeable to sales tax or these are exempt from sales tax?

2. Similarly, Please also guide me how can I learn the list of goods/items chargeable to sales tax?

I shall be thankful to all.

[kamranACA]

Dear,

You need to study section 4 and 13 of Sales Tax Act, 1990.

Section 4 interalaia zero rates all those supplies that are exported out of Pakistan and also zero rates the items mentioned in Fifth Schedule to Sales Tax Act, 1990. Your software export would be zero rated unless it is exempt under law. For exemption list you have to see Sixth schedule to sales tax act 1990. Please note that there is a big difference in zero rated items and exempt items. One cannot claim input tax against exempt items while it is allowed for zero rated items.

Section 13 of the Act discusses the goods the supplies of which would be exmpt from sales tax under the Act. Under scetion 13, all such exempt items are enlisted in Sixth schedule to the sales tax act 1990.

Except exempt items, all other goods are subject to levy of sales tax unless these are declared as zero rated items.

Regards,

Kamran.

[zurpk]

AOA

Thank you Mr. Kamran. I shall read the relevent sections inshallah.

[zurpk]

AOA

According to income tax law, income from export of software is exempted from tax. So what are the requirements to avail this opportunity? Our company is already registered with Pakistan Software Export Board and we are receiving our remittances through banking channel.
I have also come to know that Software Companies are required to get themselves registered with the Exchange Policy Department of the State Bank of Pakistan. These companies are also required to submit monthly export/import statement to State Bank of Pakistan. For that purpose I visited to the Islamabad office of the State Bank of Pakistan but they directed me to contact Exchange Policy Department of Karachi. However, a question is arising if a person is living in Islamabad then how can he register with the Exchange Policy Department of Karachi office? I shall be thankful if any one provides more information about this topic.


Thanks

Zia ur Rahman

[zurpk]

Assalam-o-Alaykum

I shall be greateful if any one share his informations about the above topics.

Thanks

[kamranACA]

Dear,

This a very specific question and might be replied by some one working with SBP.

This may be due to non-existence of Exchange Policy Department at Islamabad. I dont exactly know but it is a possibility that this function might have been kept centralised at Karachi for various logistical or policy reasons.

Hope you wud find some better reply from any of the other members.

Regards,

Kamran.