Indirect taxes are those where the incidence of taxation is passed on to ultimate
consumer/buyer, for example Custom duty, Sales Tax, Federal Excise duty.
Direct taxes are those which are paid and suffered by the same
person. Like income tax, wealth tax, capital value tax etc. It is also called
“progressive tax”. Because it is based on the principal of equity and justice.
SALES TAX ACT 1990
This
is the classic example of Indirect tax where the incidence of taxation is
passed on to ultimate consumer/buyer. Sales tax law relates to levy of tax on
sale, importation, exportation, production, manufacture or consumption. Sales tax law consist of Sales
Tax Act 1990, Sales Tax Rules 2007, Sales Tax procedures Rules 2007 and
Provincial Sales Tax Ordinances. Also it includes Notifications by Federal
Government Finance Ordinance / Act, Circulars by CBR, Circular letters by CB and
Tax case laws issued by Income Tax appellate Tribunal (ITAT), High Court (HC), Supreme
Court (SC) to interpret any provision of the law.
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