Sales Tax

Direct Taxes:
A direct tax is a tax that a person or organization pays directly to the
entity that imposed it. An individual taxpayer, for example, pays direct
taxes to the government for various purposes, including income tax,
real property tax or personal property tax.

Indirect Taxes:
Indirect taxes are any tax that can be passed on to another entity or
individual - they are typically imposed on a manufacturer or supplier
who then pass on the tax to the consumer. Indirect taxes are paid the
moment a consumer buys a product and the tax is collected by the
supplier and is paid to the government. Examples of indirect tax are
VAT, excise duties and import levies.

Value Added Tax:

Sales Tax is Value added Tax (VAT) system. It is an indirect tax
collectable from the whole supply chain i.e. manufacturers, wholesalers
and retailers with certain exceptions…

Therefore, Sales tax is a multi-stage tax payable on the value of;

 Taxable supplies by a registered person in respect of of any

taxable activity carried on by him
 Goods imported into Pakistan
  Specified taxable services

VAT FORMULA:

Output tax – Input tax = Payable