Explanation:

Section 4 of the Act elucidates following items which are chargeable to tax at the rate of zero per cent:

1. Goods exported, or the goods specified in the Fifth Schedule;
2. Supply of stores and provisions for consumption aboard a conveyance proceeding to a destination outside Pakistan as specified in section 24 of the Customs Act, 1969 (IV of 1969);
3. Such other goods as the Federal Government may, by notification in the Official Gazette, specify provided that nothing in this section shall apply in respect of a supply of goods which –
   1. are exported, but have been or are intended to be re-imported into
      Pakistan; or
   2. have been entered for export under Section 131 of the Customs Act, 1969 (IV of 1969), but are not exported; or
   3. have been exported to a country specified by the Federal Government,
      by Notification in the official Gazette.
      Provided further that the Federal Government may by a notification in
      the official Gazette, restrict the amount of credit for input tax actually
      paid and claimed by a person making a zero-rated supply of goods
      otherwise chargeable to sales tax.
4. Such other goods as may be specified by the Federal Board of Revenue through a general order as are supplied to a registered person or class of registered persons engaged in the manufacture and supply of goods at reduced rate of sales tax.

Following is the section 4 of Sales Tax Act 1990:

sec 4. Zero rating.–

Notwithstanding the provisions of section 3, the following goods shall be charged to tax at the rate of zero per cent:-

-(a) goods exported, or the goods specified in the Fifth Schedule;

-(b) supply of stores and provisions for consumption aboard a conveyance proceeding to a destination outside Pakistan as specified in section 24 of the Customs Act, 1969 (IV of 1969);

-(c) such other goods as the Federal Government may, by notification in the Gazette, specify:
Provided that nothing in this section shall apply in respect of a supply of goods which

— (i) are exported, but have been or are intended to be re-imported into Pakistan; or

–(ii) have been entered for export under Section 131 of the Customs Act, 1969 (IV of 1969), but are not exported ; or

–(iii) have been exported to a country specified by the Federal Government, by Notification in the official Gazette
Provided further that the Federal Government may by a notification in the official Gazette, restrict the amount of credit for input tax actually paid and claimed by a person making a zero-rated supply of goods otherwise chargeable to sales tax.

-(d) such other goods as may be specified by the Federal Board of Revenue through a general order as are supplied to a registered person or class of registered persons engaged in the manufacture and supply of goods supplied at reduced rate of sales tax.