ISLAMABAD: The Federal Board of Revenue (FBR) has announced on Wednesday that the reduced rate of one percent withholding tax would be applicable on the import of raw material imported by manufacturers of textile, leather, surgical, carpets and sports goods.
The FBR has clarified the issue through a circular number 2 of 2020 issued here on Wednesday.
According to the FBR, through the Finance Act, 2020, the rate of advance tax under section 148 of the Income Tax Ordinance, 2001 has been changed to one percent, 2 percent and 5.5 percent in respect of goods classified under Part I, II and III of the Twelfth Schedule respectively.
It is clarified that the rate of advance tax under section 148 in case of raw material imported by manufacturers covered under the rescinded S.R.O.1125(I)2011 as it stood on June 28, 2019 on import of items covered under the aforementioned S.R.O. shall be 1% irrespective of whether such goods are classified in Part II or III of the Twelfth Schedule, FBR added.
It is important to mention that the rescinded SRO.1125 was appliable from ginning onwards in case of textile sector; production of PTA or MEG for synthetic sector; regular manufacturing in case of carpets and jute products; tannery in case of leather sector and organized manufacturing in case of surgical and sports goods.
The benefit of the rescinded SRO 1125(I)2011 was available to every such person doing business in textile (including jute), carpets, leather, sports and surgical goods sectors, who was registered as manufacturer; importer; exporter; and wholesaler.
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