OS: Claim and adjustment of inadmissible input tax Rs.

Section 8 (I) (h), (j) & (k) of the Sales tax Act, 1990 states that a registered person shall
not be entitled to reclaim or deduct input tax paid on goods used in or permanently attached to
immoveable property, such as building and construction materials including prefabricated building
and such goods acquired for sale and resale or for direct use in the production or manufacturing of
taxable goods, vehicles falling in chapter 87 of the First Schedule to the customs Act, 1969, and
import or purchase of agricultural machinery or equipment subject to sales tax @ 7% under Eight
schedule to the Act ibid.

During review of sales tax returns filed by M/s Pakistan Mineral Development Corporation
(Pvt.) Ltd. (STR 0703284200737).

Audit has observed that the registered person has claimed and adjusted input tax paid on
purchase of cement, tractor and agricultural farm machinery as cited below:

Statement showing claim and adjustment of inadmissible input tax Rs.

Month Sr. Supplier Invoice No. dated Supplies Sales Tax

No. of
Annex
6/18 53 Millat Tractor TAD169572 dt. 4.5.18 Tractor 5% 82,290
56 -do- TADIMP169573 dt. 4.5.18 Agricultural Farm 7% 3,832
57 -do- TADIMP169575 dt. 4.5.18 Machinery 7% 6,535
58 -do- TADIMP169577 dt. 4.5.18 -do- 7% 33,548
-do-
8/18 9 Bestway Cement 100204 dt. 30.8.18 Cement 24,715
6/19 1 Yasir KANS 1023 dt. 24.6.19 39-c Plastic pipe fitting 24,650
Intl. Traders baths, washbasins,
NTN 4252271-4 lavatory seats etc.
2 -do- 1023 dt. 20.6.19 -do- 24,650
3 -do- 1023 dt. 20.6.19 Electric lighting & wiring 98,600
equipment