ISLAMABAD (September 14 2003): The Central Board of Revenue (CBR) has directed all collectors of sales tax to charge 15 percent GST on the supply/sale of all kinds of woods, says an order issued here on Saturday.
The CBR was responding to the audit objections pertaining to non-deduction of sales tax on the supply of wood by a government agency of Peshawar.
The CBR has conveyed to the regional collectorates that 'trees' are exempt from payment of sales tax, being agricultural produce, vide S. No 2 of the Sixth Schedule of the Sales Tax Act, 1990.
However, wood including firewood, fuel wood, timber, logs and all other kinds of wood are not exempt from payment of sales tax and are, thus, chargeable to sales tax at the standard rate of 15 percent of the value.
Sales or supplies of such wood to persons not registered under the Sales Tax Act, 1990 attract 'further tax' at the rate of 3 percent to the aforesaid standard rate of 15 percent of the value, CBR added.
It is learnt that authorities want an effective check on the non-payment of sales tax regarding sale/local supply of wood, as an impression has been created by certain quarters that GST exemption is available on the supply/sale of wood under Sixth Schedule of the Sales Tax Act, 1990.
The CBR has clarified the factual status through the above-said order.