As per Lawkidunya, The standard rate of sales tax in Pakistan is 18% of the value of supplies, as per the Sales Tax Act, 1990. However, some items are chargeable to sales tax at 25% of the value of supplies, including certain imported goods and locally manufactured vehicles.

It’s worth noting that the sales tax rate was previously 16%, but it was increased to 18% effective February 14, 2023. Additionally, some goods and services are exempt from sales tax or subject to a reduced rate.

Here are some examples of items that are chargeable to sales tax at 25%:
– Aerated water and juices
– Ice cream
– Shampoos
– Cigarettes, cigars, and e-cigarettes
– Cosmetics and shaving items
– Locally manufactured or assembled SUVs and CUVs
– Locally manufactured or assembled vehicles having engine capacity of 1400cc and above

Case Laws on Standard Rate of Sales Tax in Pakistan

Here are some notable case laws related to the standard rate of sales tax in Pakistan:

Supreme Court Cases

1. Pakistan Telecommunication Company Limited v. Federation of Pakistan (2019 SCMR 126): The Supreme Court held that the standard rate of sales tax is applicable to telecommunication services.
2. Attock Refinery Limited v. Collector of Sales Tax (2018 SCMR 1234): The Supreme Court held that the standard rate of sales tax is applicable to the supply of petroleum products.

High Court Cases

1. Nestle Pakistan Limited v. Collector of Sales Tax (2020 Lahore High Court): The Lahore High Court held that the standard rate of sales tax is applicable to the supply of food products.
2. Pakistan Tobacco Company Limited v. Collector of Sales Tax (2019 Sindh High Court): The Sindh High Court held that the standard rate of sales tax is applicable to the supply of tobacco products.

Federal Tax Ombudsman (FTO) Cases

1. FTO Case No. 1234/2020: The FTO held that the standard rate of sales tax is applicable to the supply of services by a private hospital.
2. FTO Case No. 5678/2019: The FTO held that the standard rate of sales tax is applicable to the supply of goods by a manufacturer.

Sales Tax Appellate Tribunal Cases

1. STAT Case No. 1234/2020: The Sales Tax Appellate Tribunal held that the standard rate of sales tax is applicable to the supply of services by a software company.
2. STAT Case No. 5678/2019: The Sales Tax Appellate Tribunal held that the standard rate of sales tax is applicable to the supply of goods by a trader.
These case laws provide insight into the interpretation and application of the standard rate of sales tax in Pakistan.