As per Lawkidunya, In Pakistan, taxable supplies refer to goods and services that are subject to sales tax under the Sales Tax Act, 1990. These supplies are taxable at a standard rate of 16%, although some items may be taxed at a higher or lower rate.

Taxable Goods

1. Manufactured goods: Goods manufactured in Pakistan, such as textiles, cement, steel, and electronics.
2. Imported goods: Goods imported into Pakistan, such as machinery, vehicles, and consumer goods.
3. Locally produced sugar: Sugar produced in Pakistan is subject to sales tax.
4. Cigarettes and tobacco products: Cigarettes and tobacco products are taxable at a higher rate.
5. Beverages: Carbonated beverages, such as soft drinks, are taxable.

Taxable Services

1. Telecommunication services: Telecommunication services, such as mobile phone services and internet services.
2. Banking and financial services: Banking and financial services, such as loan services and credit card services.
3. Insurance services: Insurance services, such as life insurance and general insurance.
4. Advertising services: Advertising services, such as print and electronic media advertising.
5. Construction services: Construction services, such as building and civil engineering services.

Standard Rate of Tax

The standard rate of sales tax in Pakistan is 16%. However, some items may be taxed at a higher or lower rate.

Additional Tax

In addition to the standard rate of tax, some goods and services may be subject to additional tax, such as:

1. Federal Excise Duty (FED): FED is a tax levied on certain goods, such as cigarettes and tobacco products.
2. Provincial taxes: Provincial governments in Pakistan may also levy taxes on certain goods and services.

Exemptions and Zero-Rating

Certain goods and services may be exempt from sales tax or zero-rated, meaning they are taxable at a rate of 0%. Examples include:

1. Exported goods: Goods exported from Pakistan are zero-rated.
2. Agricultural produce: Unprocessed agricultural produce, such as wheat and rice, is exempt from sales tax.
3. Medicines and pharmaceuticals: Medicines and pharmaceuticals are exempt from sales tax.

Case Laws on Taxable Supplies in Sales Tax Act, 1990

Here are some notable case laws related to taxable supplies in the Sales Tax Act, 1990, in Pakistan:

– Input Tax Claim: In a Supreme Court case, it was contended that input tax under Section 7 of the Sales Tax Act, 1990, could not be claimed when the taxable supply is made.
– Taxation of Goods: The Peshawar High Court inserted Section 40D into the Sales Tax Act, 1990, through the Tax Laws (Amendment) Act, 2020, relating to the taxation of goods.
– Sales Tax on Suppliers: The Supreme Court of Pakistan clarified that Section 7 of the Sales Tax Act, 1990, remains the core provision for levying sales tax on suppliers of taxable supplies/goods.
– Reference Application: The Lahore High Court dealt with a Reference Application under Section 47 of the Sales Tax Act, 1990, which involved the taxation of taxable supplies.

These case laws provide insight into the interpretation and application of the Sales Tax Act, 1990, in Pakistan, specifically regarding taxable supplies.