COMMISSIONER INLAND REVENUE, ZONE-I, LTO, KARACHI vs PAKISTAN STATE OIL COMPANY LIMITED, KARACHI Ss

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COMMISSIONER INLAND REVENUE, ZONE-I, LTO, KARACHI VS PAKISTAN STATE OIL COMPANY LIMITED, KARACHI Ss. 2(46) & 11(5)---FBR letter No. 1(17) STR/2000 and FBR Circular C.No.1(30)STR/99 (Vol-II)---Supply of oil products by Oil Marketing Company (Pakistan State Oil Company Limited/PSO)---Price Differential Claims ('PDCs')---Legal character---Value of supply---Scope---Department issued two Show-Cause Notices to Registered Person for non-payment of sales tax on Price Differential Claim ('PDC') receipts having been received from the Government of Pakistan---Assessment order was passed against (Registered Person /PSO) raising sales tax demand along with a penalty equal to the principal amount and default surcharge---Department approached the Appellate Tribunal Inland Revenue ('Tribunal') as the Commissioner Inland Revenue (Appeals) ['CIR (Appeals)'] deleted the entire demanded amount (the sales tax as well as penalty and default surcharge) on the ground of limitation prescribed under S. 11(5) of the Sales Tax Act, 1990---Plea of the Department, principally basing on FBR letter No. 1(17) STR/2000, was that PDCs fell within the scope of value of supply---Validity---Federal Board of Revenue Letter No. 1(17) STR/2000, was explicitly withdrawn through FBR Circular C.No.1(30)STR/99 (Vol-II) having been issued by the Revenue Division, Central Board of Revenue (Sales Tax Wing) ['later FBR Circular'], thereby extinguishing any interpretative value it may, if any, once held---The very classification of PDCs, as consideration under S. 2(46) of the Sales Tax Act, 1990, was expressly reconsidered and reversed by the later FBR circular---Said later FBR Circular clearly delineated / clarified the scope of "value of supply" and expressly excluded governmental subsidies, in the form of PDCs, from that definition in the case of oil refineries ('Clarification')---Said Clarification-in-question aligned with the statutory definition of "value of supply" in S. 2(46) of the Sales Tax Act, 1990, which provides that the value of supply in respect of a taxable supply is the consideration in money including all Federal and Provincial duties and taxes, if any, which the supplier receives from the recipient for that supply---Appeal filed by the Department was dismissed, in circumstances.

COMMISSIONER INLAND REVENUE, ZONE-I, LTO, KARACHI vs PAKISTAN STATE OIL COMPANY LIMITED, KARACHI Ss — 2025 PTD 1803 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN

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