I. BACKGROUND (BG)

1. This refers to the related Important TLQCs in trail blue, italic and double Line (a) ------ of ----- about Electricity & Gas Input to Factory Labour Colony is allowable ---- (b) ------- of ---------- about Non-Resident's Franchise Services Input Tax allowed (c) ------- of  ------------ about No Input tax of Cement, Steel, etc for Construction –SHC

2. We also refer to several Other related TLQCs including (a) ---------------- about Input Tax & Alleged Fake Flying Invoices - ----- order against Department (b) ------------------------ about Input tax is OK before Blacklisting, if Purchases with Section 73 Compliance – ----- (c) --------------- about 6M Input Adjustment limit will extend, if RP win – ------------- & KCV (d) ---------------- about Royalty, Franchise, Other Reverse charge input allowed – -------------- (e) ------------------ about Input Tax Adjustment on Hoteling & Vehicle – -------------- (f) ---------------- about Input Tax Adjustment for Leather, Tent, etc

II. EXECUTIVE SUMMARY

The issue in this case revolves around the interpretation of Section 8(1)(h) and 8(1)(f) of the STA 1990. The registered person's argument that input tax credit is admissible on goods that contribute indirectly or remotely towards the furtherance of taxable activity is supported by various court judgments. There is no specific and elaborative contention of the department on multi uses of goods purchased by the registered person. Department has not inspected the goods used and there is no report on record. There is nothing against contention of registered persons purchased and used articles helped in the process of Textile activity, citation referred below support contention of registered persons.

Hence, Input tax against goods that contribute directly or indirectly and even remotely towards furtherance of taxable activity is allowed by ATIR, Multan.

III. DETAILS

A. Reference and Issue

1 ro 2

B. Brief Facts

1 to  2 

C. Grounds of Appeal

1 to  10 

D. Arguments

AR argued that Order of the learned CIRA is bad in law and against the facts of the case. On the other hand, learned DR appearing on behalf of the Respondent has fully supported the impugned order in appeal.

E. CIRA Findings

1 to  2

F. ATIR Deliberations

1 to  5

G. Decision and Conclusion

In view of the above findings and analysis, I decide to accept the appeal and set aside the orders passed by the authorities below. The denial of input tax credit on the goods in question is not justified, and the appellant is entitled to claim input tax credit on these goods.

IV. FURTHER DETAILS & SERVICES

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Statement, Advisory, Return Filing or Review services, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com, asif.s.kasbati@professional-excellence.com.

Best regards for Here & Hereafter

Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner

Kasbati & Co (1400+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc

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