Dear please someone explain me, whether the charitable, non-profit, donor organizations are liable to pay sales tax on local procurements of goods and services or imports.
if not can i find any reference in sales tax act 1990?
secondly, and if they can avail exemption, would it be required for each individual procurement or for a year etc?
shall be very thankful for cooperation. regards
Not all Charitable and non profit organisation are exempt from payment of sales tax. Only Supply to diplomats, diplomatic missions, privileged persons and privileged organizations which are covered under various Acts, Orders, Rules, Regulations and Agreements passed by the Parliament or issued or agreed by the Government of Pakistan can avail Zero rating facility under Fifth Schedule of the sales tax act, 1990. To avail the zero rating facility their supplier have to apply for authorisation before making supply at zero percent.
Exemptions are also available on imports of following heads under sixth schedule of the sales tax act, 1990.
Goods imported by or donated to hospitals run by the Federal Government or a Provincial Government; and non-profit making educational and research institutions subject to the similar restrictions, limitations, conditions and procedures as are envisaged for the purpose of applying zero-rate of customs duty on such goods under the Customs Act, 1969 (IV of 1969).