Pakistan Supreme Court Clarifies Input Tax Deductions for Unusable Goods

The Pakistani Supreme Court Nov. 14 issued a decision in Case No. C.A.947/2002, clarifying the input tax deduction rules for unusable goods. The taxpayer, a cotton yarn manufacturer, purchased several bales of ginned cotton and subsequently filed a sales tax return claiming a refund for overpaid input tax. The Tax Officer granted a partial refund on the grounds that many of the bales were damaged or destroyed in a fire, and thus unusable for taxable supplies. On appeal, the Supreme Court granted the deduction, finding that the taxpayer satisfied the conditions under Section 7 of the Sales Tax Act, and ...