Zero-rating restored on 19 items

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ISLAMABAD : The Federal Board of Revenue on Thursday restored zero-rating on import and local supply of 19 products, mainly of stationery, dairy and bicycles, including their raw material. The facility was restored after a lapse of 26 days.

 

The exemption was restored vide SRO670 of 2013, but stringent conditions have been linked with it for availing the facility.

 

In the budget 2013-14, the ruling PML-N had imposed 17pc sales tax on import and local supply of all such products.

 

But on strong resistance, Finance Minister Ishaq Dar announced in his concluding budget speech on June 22 that the facility would be restored on these products. The FBR, however, issued the SRO after a lapse of 26 days.

 

The notification did not say anything whether the sales tax collected between June 12 and July 18 would be returned or not to the manufacturers.

 

The 19 products on which sales tax would not be charged include - colors ink sets, writing, drawing and marking inks, erasers, exercise books, pencils, sharpeners, geometry boxes, pens, ballpoint pens, markers and porous tipped pens, pencils, including colour pencils, milk, including flavoured milk, yogurt, cheese, butter, cream, desi ghee, whey, milk and cream, concentrated and added sugar or other sweetening matter, preparations for infant use put up for retail sale and fat filled milk and bicycles

 

The availing of the facility has, however, been linked with a series of conditions.

 

The notification says that zero-rating would be available subject to determination of input/output ratios by the Input -Output Co-efficient Organisation (IOCO), if not already determined under an earlier concessionary notification issued for such goods.

 

For import and local procurement of raw material, packing material, subcomponents, components, sub-assemblies and assemblies for manufacture of these goods, a sales tax registered manufacturer of these goods having suitable in-house facilities shall submit a complete list of his annual requirement of the inputs the manufacturer intends to import or purchase locally for manufacture of goods to the Commissioner Inland Revenue having jurisdiction.

 

The commissioner would approve the declaration of input-output ratio of the manufacturer without physical verification in case declared input–output ratio and input requirement is in accordance with the prevailing industry average or the inputs consumption pattern of the applicant manufacturer or as already determined by IOCO under an earlier notification issued for such goods.

 

In case the commissioner is not satisfied with the declared input-output ratios of the goods to be manufactured because of their being prima facie not in accordance with the prevalent average of the relevant industry or in case the input-output ratios are not already determined by IOCO, he may, after allowing a six months provisional quantity, make a reference to the IOCO for final determination thereof.



Courtesy:  Dawn


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