Business & Finance
Print 2021-06-13
Finance Bill 2021: Annexures to Finance Bill 2021
SUMMARY OF TAX EXPENDITURE 2021
Tax Expenditure Report 2021 for federal taxes, based on data pertaining to FY...
SUMMARY OF TAX EXPENDITURE 2021
Tax Expenditure Report 2021 for federal taxes, based on data pertaining to FY 201920, amounted to an estimated Rs. 1,314.27 billion. Tax expenditure in sales tax amounted highest at Rs. 578.46 billion (44% of the total), while in income tax amounted to Rs. 448.05 billion (34%), and in Customs, to Rs. 287.77 billion (22%). In last fiscal year 2019-20, FBR’s tax collection was Rs. 3,997.4 billion. Hence, tax expenditure to total collection ratio comes to about 33%, and tax expenditure to GDP ratio stands at around 3.2%.
The tax expenditure estimates are unadjusted amounts, meaning that elimination or repeal of a specific exemption would not necessarily produce the rupee amounts cited in this report. Actual receipts would depend on enforcement, taxpayer compliance, effective dates of legislation repealing the exemption, exact wording of any legislation, taxpayer’s behavior, and some other economic factors.
This report briefly outlines federal tax exemptions and concessions. These descriptions do not grant rights or impose obligations; rather, the tax laws and rules made thereunder determine actual tax liability. Each estimate is based on the best information available from public and private sources, including FBR’s database. It would be exceptionally burdensome on taxpayers to require detailed reporting of transactions corresponding to each of the exemption sections and clauses. No such detailed reporting is imposed by statute or rules. Consequently, tax returns do not contain data sufficient to estimate the value of all exemptions and exclusions.
Estimation requires identification of pertinent, useful data available from various external sources. Where exemptions identified in tables have not been estimated, it is because requisite data does not exist or have not been identified and acquired from an external source.
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Income Tax Estimates
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Summary of Tax Expenditure Estimates of Income Tax - FY 2021
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Contents (Rs. Million)
1 Allowances 37,318
2 Tax Credits 105,342
3 Exemptions from Total Income 267,115
4 Reduction in Tax Rates 124
5 Reduction in Tax Liability 2,839
6 Exemption from Specific Provisions 2,687
7 Others/Miscellaneous 32,621
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Total 448,046
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Allowances
======================================================================================================================
Legal Description Intended Estimate
Sr. Reference (Exemption or Concession) Beneficiary (Rs in Mln)
1 23 New business entities 30,110.00
2 23A Industrial undertaking set up in specified rural and 340.00
under developed areas or engaged in the
manufacturing of cellular mobile phones
3 60 Persons paying Zakat 1,116.38
4 60A Persons paying Workers’ Welfare Fund 2,522.40
5 60B Persons paying Workers’ Participation Fund 2,523.51
6 60C Individuals paying profit or share in rent and share
in appreciation for value of house on loan by banks etc 646.67
7 60D Individuals having income of less than Rs. 1.5 million, 59.13
paying tuition fee
======================================================================================================================
Total 37,318.09
======================================================================================================================
Tax Credits
======================================================================================================================
Sr. Legal Description Tax Credits
Reference (Exemption or Concession) Intended Estimate
Beneficiary (Rs in Mln)
======================================================================================================================
1 61 Tax credit for Persons giving charitable 2,869.91
donations charitable donations
2 62 Tax credit for investment in Persons (excluding
shares and life insurance companies) investing in 2,222.31
shares, sukuks, or life
insurance
3 62A Tax credit for investment in Persons (excluding 21.72
health insurance companies) investing in
health insurance
4 63 Tax credit for contribution to Eligible persons as 915.68
an Approved Pension Fund. defined in sub-
section (19A) of
section 2 of
Ordinance
5 64B Tax credit for employment Corporate manufacturing 57.40
generation by manufacturers sector
6 65B Tax credit for Non-Equity Corporate manufacturing 51,408.24
Investment in Plant & Machinery sector
7 65B Tax credit for Equity Investment Corporate manufacturing 10,857.36
sector
in Plant & Machinery
8 65C Tax credit for enlistment in Companies opting for 181.17
registered Stock Exchange enlistment in a registered
stock exchange
9 65D Tax credit for newly established Corporate industrial 5,193.57
industrial undertakings units (including
corporate dairy farming)
10 65E Tax credit for industrial Corporate industrial 13,131.81
undertakings established before units (including
the first day of July, 2011 corporate dairy farming)
11 100C Tax credit for Non-profit Non-profit organizations, 18,482.94
organizations, trusts or welfare trusts, welfare institutions
institutions
======================================================================================================================
Total 105,342.11
======================================================================================================================
Exemptions from Total Income
======================================================================================================================
1 3 Salary of foreign personnel Foreign experts 119.23
engaged by institutions of the working with Agha
Agha Khan Development Khan Development
Network Network, (Pakistan)
2 4 Salary received by Pakistani Employees (Pakistani 67.68
seafarers seafarers)
3 5 Foreign allowances (Government Employees (diplomats) 1,001.86
of Pakistan)
4 8 Pension received by a citizen of Employees 2,732.76
Pakistan from a former employer (pensioners)
5 9 Pensions (Government) Employees (retired 13,710.00
government servants &
military personnel)
6 12 Commutation of Pension Employees 9,642.77
(pensioners)
7 13 Gratuities Employees (recipients 695.47
of gratuity payments)
8 17 Income derived by the families Families and 2.10
and dependents of the dependents of the
Shaheeds belonging to the Civil Shaheeds belonging
Armed Forces of Pakistan to the Civil Armed
Forces
9 19 Encashment of leave Employees (retiring 1,139.86
preparatory to retirement personnel of Armed
Forces or Government
servant)
10 22 Payments from a provident fund Employees (recipient 6,686.92
to which the Provident Funds Act, of payments from
1925 applies. provident funds
11 23 The accumulated balance due Employees 246.41
and becoming payable to an participating in a
employee participating in a recognized provident
recognized provident fund. fund.
12 23A The accumulated balance up to Voluntary participants 79.63
[50]% received from a pension in pension funds
fund at the time of eligible person’s-
(a) retirement; or
(b) disability rendering him
unable to work; or
(c) death by his nominated
survivors.
13 23B Monthly installments from an Pensioners 25.17
income payment plan invested
with a pension fund manager
14 23C Withdrawal of accumulated Pensioners 147.75
balance from approved pension
fund
15 24 Benevolent grants paid from the Employees (recipient 482.90
Benevolent Fund (under Central of benevolent grants)
Employee Benevolent Fund and
Group Insurance Act, 1969)
16 25 Payments from an approved Families of deceased 43.97
superannuation fund made on the enrolled in approved
death of a beneficiary superannuation funds
17 26 Sums received by workers Low-income workers; -
from Workers Participation recipients of payments
Fund (WPF) from WPF
18 39 Special allowance or benefit for Employees receiving 947.76
employees to meet expenses payments to meet
incurred in the performance of the expenses in the
duties performance of duties
19 40 Income of a newspaper employee Newspaper employees-
representing Local Travelling
Allowance
20 53A Employment related Employees receiving 134.16
perquisites (food, education, employment-related
medical treatment and any perquisites.
other perquisites, if provided
by employer for free or at
subsidized rates)
21 55 House rent allowance (to Judiciary of Superior 35.00
judges of the Supreme Court of Courts
Pakistan or of High Courts)
22 56 Perquisites, benefits and Judiciary of Superior 290.00
allowances received by a Judge Courts
of Supreme Court of Pakistan
and Judge of High Court
23 57 (1) Any income from voluntary * National Investment 40.20
contributions, house property (Unit) Trust of Pakistan,
and investments in securities of Mutual Funds set up by
the Federal Government derived Investment Corporation
by the following, namely:- of Pakistan Sheikh
National Investment (Unit) Trust Sultan Trust Karachi.
of Pakistan Mutual Fund set up
by the Investment Corporation of
Pakistan, Sheikh Sultan Trust,
Karachi
24 57 (2) Income other than capital gain on Mutual funds,-
stock and shares of public investment companies,
company, PTC vouchers, collective investment
Modaraba certificates, or any schemes, REIT
instrument of redeemable capital schemes, Private
and derivative products held for Equity & Venture
less than 12 months derived by Capital Funds, and
any Mutual Fund, investment National Investment
company, or a collective (Unit) Trust of Pakistan
investment scheme or a REIT
Scheme or Private Equity and
Venture Capital Fund or the
National Investment (Unit) Trust
of Pakistan, if not less than ninety
per cent of its income of that year
is distributed amongst the Unit-
holders.
======================================================================================================================
Any income of the following funds and institution
======================================================================================================================
25 57 (3) (i) a provident fund to which Provident Funds 1,783.60
the Provident Funds Act, 1925
applies;
26 57 (3) (ii) trustees on behalf of a Trustees of recognized 13,120.00
recognized provident fund or an provident funds,
approved superannuation fund or approved
an approved gratuity fund; superannuation funds,
and approved gratuity
funds
27 57 (3) (iii) a benevolent fund or group Benevolent funds and 138.60
insurance scheme approved by group insurance
the Board for the purposes of this schemes
clause;
28 57 (3) (iv) Service Fund; Service Funds; -
29 57 (3) (v) Employees Old Age Benefits Employees Old Age 5,465.78
Institution established under the Benefits Institution
Employees Old Age Benefit Act,
1976 (XIV of 1976);
30 57 (3) (vii) any Unit, Station or Units, Stations or -
Regimental Institute; and Regimental Institutes
31 57 (3) (vi) any recognized Regimental Regimental Thrift and -
Thrift and Savings Fund, the assets Savings Funds
of which consist solely of deposits
made by members and profits
earned by investment thereof;
32 57 (3) (viii) a Pension Fund approved by Approved Pension 740.18
the SECP Funds
33 57 (3) (ix) any profit or gain or benefit Pension funds under 15.00
derived by a pension fund the Voluntary Pension
manager from a pension Fund System Rules 2005
approved under the Voluntary
Pension System Rules, 2005, on
redemption of the seed capital
invested in pension fund as
specified in the Voluntary Pension
System Rules, 2005;
34 57 (3) (xi) International Irrigation International Irrigation 0
Management Institute. Management Institute
35 57 (3) (xii) Punjab Pension Fund Punjab Pension Fund 2,271.37
established under the Punjab
Pension Fund Act, 2007 (I of
2007) and the trust established
thereunder.
36 57 (3) (xiii) Sindh Province Pension Sindh Province 1,162.26
Fund established under the Pension Fund
Sindh Province Pension Fund
Ordinance, 2002.
37 57 (3) (xiv) Punjab General Punjab General 161.10
Provident Investment Fund Provident Investment
established under the Punjab Fund
General Provident Investment
Fund Act, 2009 (V of 2009)
and the trust established
thereunder.”
38 57 (3) (xv) Khyber Pakhtunkhwa Khyber Pakhtunkhwa 219.18
Retirement Benefits and Death Retirement Benefits
Compensation Fund. and Death
Compensation Fund
39 57 (3) (xvi) Khyber Pakhtunkhwa Khyber Pakhtunkhwa 1,118.03
General Provident Investment General Provident
Fund. Investment Fund
40 57 (3) (xvii) Khyber Pakhtunkhwa Khyber Pakhtunkhwa 1,465.68
Pension Fund ; Pension Fund
======================================================================================================================
Any amount paid as donation to the following institution,
foundations, societies, boards, trusts and funds
======================================================================================================================
41 61 (i) any Sports Board or ibid n.a.
institution recognized by the
Federal Government for the
purposes of promoting,
controlling or regulating any
sport or game ibid 431.52
42 61 (ia) The Citizens Foundation ibid -
43 61 (iii) Fund for Promotion of
Science and Technology in
Pakistan ibid -
44 61 (iv) Fund for Retarded and
Handicapped Children ibid n.a.
45 61 (v) National Trust Fund for the
Disabled ibid n.a.
46 61 (vii) Fund for Development of
Mazaar of Hazrat Burri Imam ibid n.a.
47 61 (viii) Rabita-e-Islami’s
Project for printing copies of
the Holy Quran
48 61 (ix) Fatimid Foundation, Karachi ibid 15.83
49 61 (x) Al-Shifa Trust ibid -
50 61 (xii) Society for the Promotion of ibid -
Engineering Sciences and
Technology in Pakistan
51 61 (xxiii) Citizens-Police Liaison ibid -
Committee, Central Reporting
Cell, Sindh Governor House,
Karachi
52 61 (xxiv) ICIC Foundation ibid -
53 61 (xxvi) National Management ibid -
Foundation
54 61 (xxvii) Endowment Fund of the ibid -
institutions of the Agha Khan
Development Network
55 61 (xxviii) Shaheed Zulfiqar Ali ibid n.a.
Bhutto Memorial Awards Society
56 61 (xxix) Iqbal Memorial Fund ibid -
57 61 (xxx) Cancer Research ibid -
Foundation of Pakistan,
Lahore
58 61 (xxxi) Shaukat Khanum ibid 1,026.20
Memorial Trust, Lahore
59 61 (xxxii) Christian Memorial ibid 0.01
Hospital, Sialkot
60 61 (xxxiii) National Museums, ibid n.a.
National Libraries and
Monuments or Institutions
declared to be National
Heritage by the Federal
Government
61 61 (xxxiv) Mumtaz Bakhtawar ibid 8.31
Memorial Trust Hospital, Lahore
62 61 (xxxv) Kashmir Fund for ibid n.a.
Rehabilitation of Kashmir
Refugees and Freedom Fighters
63 61 (xxxvi) Institutions of the ibid 227.00
Agha Khan Development
Network (Pakistan)
64 61 (xxxvii) Azad Kashmir President’s ibid -
Mujahid Fund, 1972; National
Institute of Cardiovascular Diseases,
(Pakistan) Karachi; Businessmen
Hospital Trust, Lahore; Premier Trust
Hospital, Mardan; Faisal Shaheed
Memorial Hospital Trust, Gujranwala;
Khair-un-Nisa Hospital Foundation,
Lahore; Sind and Balochistan
Advocates Benevolent Fund; Rashid
Minhas Memorial Hospital Fund.
65 61 (xxxviii) Any relief or welfare ibid -
fund established by the Federal
Government;
66 61 (xxxix) Mohatta Palace Gallery ibid -
Trust
67 61 (xl) Bagh-e-Quaid-e-Azam ibid -
project, Karachi
68 61 (xli) Any amount donated for ibid -
Tameer-e-Karachi Fund
69 61 (xlii) Pakistan Red Crescent ibid -
Society
70 61 (xliii) Bank of Commerce and ibid n.a.
Credit International Foundation
for Advancement of Science
and Technology
71 61 (xliv) Any amount donated to ibid -
Federal Board of
Revenue Foundation.
72 61 (xlv) The Indus Hospital, Karachi ibid 460.70
73 61 (xlvi) Pakistan Sweet Homes ibid -
Angels and Fairies Place
74 61 (xlvii) Al-Shifa Trust Eye ibid 33.53
Hospital
75 61 (xlviii) Aziz Tabba Foundation ibid 163.52
76 61 (xlix) Sindh Institute of Urology ibid 142.42
andTransplantation, SIUT Trust
and Society for the Welfare of SIUT
77 61 (i) Sharif Trust ibid 157.41
78 61 (ii) The Kidney Centre Post ibid -
Graduate Institute
79 61 (Iii) Pakistan Disabled ibid -
Foundation
80 61 (Iiii) Sardar Trust Eye Hospital, ibid -
Lahore
81 61 (Iiv) Supreme Court of ibid -
Pakistan Diamer Bhasha &
Mohmand Dams
82 61 (lv) Layton Rahmatullah ibid 270.36
Benevolent Trust (LRBT)
83 61 (lvi) Akhuwat ibid 209.32
84 61 The Prime Minister Covid-19 ibid -
Pandemic Relief Fund 2020
85 61 Ghulam Ishaque Khan ibid -
Institute of Engineering
Science & Technology
86 61 Lahore University of ibid 72.42
Management Sciences (ivx)
Dawat-e-Hadiya Karachi
87 61 Baitussalam Welfare Trust ibid 144.65
88 61 Patient’s Aid Foundation ibid 60.92
89 61 Alkhidmat Foundation ibid 3.04
90 62 Alamgir Welfare Trust ibid 263.34
International
91 64A Any amount donated to the Persons making -
Prime Minister’s Special Fund donations into the said
for victims of terrorism Fund.
92 64B Any amount donated to the Persons making -
Chief Minister’s (Punjab) Relief donations into the said
Fund for Internally Displaced Fund.
Persons (IDPs) of NWFP.]
93 64C Prime Minister’s Flood Relief Persons making -
Fund 2010 and Provincial donations into the said
Chief Ministers’ Relief Funds, Fund.
for victims of flood 2010.
94 65A Income for any tax year Emigrants and their -
commencing from the tax year families in Pakistan
2003, derived from the Welfare
Fund created under rule-26 of
the Emigration Rules, 1979
(made under section 16 of the
Emigration Ordinance, 1979
(XVIII of 1979), except the in-
come generated by the
aforesaid Fund through
commercial activities.
======================================================================================================================
Any income derived by following entities: Specific Entities by name
======================================================================================================================
95 66 i. Abdul Sattar Edhi Abdul Sattar Edhi 870.84
Foundation, Karachi Foundation, Karachi
96 66 ii. Al-Shifa Trust, Rawalpindi Al-Shifa Trust, -
Rawalpindi
97 66 iii. Bilquis Edhi Foundation, Bilquis Edhi 429.47
Karachi Foundation, Karachi
98 66 iv. Fatimid Foundation, Fatimid Foundation, -
Karachi Karachi
99 66 vi. International Islamic Trade International Islamic -
Finance Corporation Trade Finance
Corporation
100 66 vii. Islamic Corporation for Islamic Corporation for -
Development of Private Sector Development of Private
Sector
101 66 viii. National Memorial Bab-e- National Memorial Bab- -
Pakistan Trust e-Pakistan Trust
102 66 ix. Pakistan Agricultural Pakistan Agricultural 0.40
Research Council, Islamabad Research Council,
Islamabad
103 66 x. Pakistan Engineering Pakistan Engineering 480.10
Council Council
104 66 xi. The corporatized entities of The corporatized 5,209.13
Pakistan Water and Power entities of Pakistan
Development Authority Water and Power
Development Authority
105 66 xii. The Institution of The Institution of 11.00
Engineers, Pakistan, Lahore Engineers, Pakistan,
Lahore
106 66 (xiia) The Prime Minister’s The Prime Minister’s -
Special Fund for victims of Special Fund for victims
terrorism of terrorism
107 66 (xiib) Chief Minister’s (Punjab) Chief Minister’s -
Relief Fund for Internally (Punjab) Relief Fund for
Displaced Persons (IDPs) of Internally Displaced
NWFP Persons (IDPs) of
NWFP
108 66 xiii. The Institutions of the The Institutions of the 1,445.65
Agha Khan Development Agha Khan
Network (Pakistan) Development Network
(Pakistan)
109 66 xiv. The Liaquat National The Liaquat National 196.01
Hospital Association, Karachi Hospital Association,
Karachi
110 66 xv. The Pakistan Council of The Pakistan Council of 125.11
Scientific and Industrial Scientific and Industrial
Research Research
111 66 xvi. The Pakistan Water and The Pakistan Water and 19,496.60
Power Development Authority Power Development
Authority
112 66 xvii. WAPDA First Sukuk WAPDA First Sukuk -
Company Limited Company Limited
113 66 (xix) Pension of a former Former Presidents of -
President of Pakistan and his Pakistan and their
widow under the President widows
Pension Act, 1974
114 66 (xx) State Bank of Pakistan State Bank of Pakistan 48,514.55
and State Bank of Pakistan and State Bank of
Banking Services Corporation Pakistan Banking
Services Corporation
115 66 (xxi) International Finance International Finance -
Corporation Corporation
116 66 (xxii) Pakistan Domestic Pakistan Domestic -
Sukuk Company Ltd Sukuk Company Ltd
117 66 (xxiii) The Asian Development The Asian Development -
Bank Bank
118 66 (xxiv) The ECO Trade and The ECO Trade and 552.51
Development Bank Development Bank
119 66 (xxv) The Islamic Chamber of The Islamic Chamber of -
Commerce and Industry under Commerce and Industry
the Organization of Islamic under the Organization
Conference (OIC) of Islamic Conference
(OIC)
120 66 (xxvi) COMSATS COMSATS -
121 66 (xxvii) WAPDA on issuance of WAPDA -
twenty billion rupees
TFC’s/SUKUK certificates for
consideration of Diamer
Bhasha Dam Projects
122 66 (xxviii) Federal Board of Federal Board of -
Revenue Foundation Revenue Foundation
123 66 (xxix) WAPDA Second Sukuk WAPDA Second Sukuk -
Company Limited Company Limited
124 66 (xxx) The Citizens Foundation The Citizens 66.07
Foundation
125 66 (xxxi) Sindh Institute of Sindh Institute of 918.73
Urology and Transplantation, Urology and Trans-
SIUT Trust and Society for the plantation, SIUT Trust
Welfare of SIUT and Society for the
Welfare of SIUT
126 66 (xxxii) Greenstar Social Greenstar Social 82.94
Marketing Pakistan Marketing Pakistan
(Guarantee) Limited (Guarantee) Limited
127 66 (xxxiii) Pakistan International Pakistan International n.a.
Sukuk Company Limited Sukuk Company
Limited
128 66 (xxxiii) The Indus Hospital, The Indus Hospital, 120.52
Karachi Karachi
129 66 (xxxiv) Second Pakistan Second Pakistan -
International Sukuk Company International Sukuk
Limited Company Limited
130 66 (xxxv) Third Pakistan Third Pakistan -
International Sukuk Company International Sukuk
Limited Company Limited
131 66 (xxxvi) Asian Infrastructure Asian Infrastructure -
Investment Bank and persons Investment Bank
as provided in Article 51 of
Chapter IX of the Articles of
Agreement signed and ratified
by Pakistan and entered into
force on the 25th December,
2015.
132 66 (xxxvii) Gulab Devi Chest Gulab Devi Chest -
Hospital. Hospital.
133 66 (xxxviii) Pakistan Poverty Pakistan Poverty 617.33
Alleviation Fund. Alleviation Fund.
134 66 (xxxix) National Academy of National Academy of 5.20
Performing Arts. Performing Arts.
135 66 (xl) Pakistan Sweet Homes Pakistan Sweet Homes 19.37
Angels and Fairies Place. Angels and Fairies
Place.
136 66 (xli) National Rural Support National Rural Support 420.10
Programme. Programme.
137 66 (xlii) SAARC Energy Centre. SAARC Energy Centre. -
138 66 (xliii) Pakistan Bar Council. Pakistan Bar Council. 0.74
139 66 (xliv) Pakistan Centre for Pakistan Centre for 5.11
Philanthropy. Philanthropy.
140 66 (xlv) Pakistan Mortgage Pakistan Mortgage 264.18
Refinance Company Limited. Refinance Company
Limited.
141 66 (xlvi) Aziz Tabba Foundation. Aziz Tabba Foundation. 46.12
142 66 (l) Al-Shifa Trust Eye Hospital. Al-Shifa Trust Eye n.a.
Hospital.
143 66 (li) Saylani Welfare Saylani Welfare 34.00
International Trust. International Trust.
144 66 (lii) Shaukat Khanum Memorial Shaukat Khanum 2200.66
Trust. Memorial Trust.
145 66 (liii) Layton Rahmatullah Layton Rahmatullah -
Benevolent Trust (LRBT). Benevolent Trust
(LRBT).
146 66 (liv) The Kidney Centre Post The Kidney Centre Post 14.00
Graduate Training Institute. Graduate Training
Institute.
147 66 (lv) Pakistan Disabled Pakistan Disabled -
Foundation. Foundation.
148 66 (lvi) Forman Christian Forman Christian 94.47
College; College;
149 66 (lvii) Habib University Habib University 3.21
Foundation. Foundation.
150 66 (lviii) Begum Akhtar Rukhsana Begum Akhtar -
Memorial Trust Hospital. Rukhsana Memorial
Trust Hospital.
151 66 (lix) Al-Khidmat Foundation. Al-Khidmat Foundation. -
152 66 (lx) Dawat-e-Islami Trust Dawat-e-Islami Trust 263.38
153 66 (Ixi) Sardar Trust Eye Hospital, Sardar Trust Eye -
Lahore. Hospital, Lahore.
154 66 (lxii) Supreme Court of Supreme Court of 0.30
Pakistan Diamer Bhasha & Pakistan Diamer
Mohmand Dams Fund Bhasha & Mohmand
Dams Fund
155 66 (lxiii) National Disaster Risk National Disaster Risk 57.20
Management Fund. Management Fund.
156 66 (lxiv) Deposit Protection Deposit Protection 4,377.60
Corporation Corporation (Already
accounted for under
sub-clause (xx) under
consolidated figure for
SBP)
157 66 (lxv) Sarmaya-e-Pakistan Sarmaya-e-Pakistan -
Limited Limited
158 66 (lxvi) Akhuwat (lxvi) Akhuwat 192.86
159 66 (lxvii) Audit Oversight Board. Audit Oversight Board. 5.68
160 66 (lxviii) Patient’s Aid Patient’s Aid 13.00
Foundation. Foundation.
161 72A Any income derived by Sukuk Sukuk holders 3,436.50
holder in relation to Sukuk
issued by “The Second
Pakistan International Sukuk
Company Limited” and the
Third Pakistan International
Sukuk Company Limited,
including any gain on disposal
of such Sukuk.
162 74 Profit on debt derived by Hub Hub Power Company 9.37
Power Company Limited on or Limited
after the first day of July,1991
163 75 Any income of an agency of a Agencies of foreign 7,362.80
foreign Government, a foreign Governments, foreign
national (company, firm or nationals or any other
association of persons), or any non-resident person
other Nonresident person approved by the
approved by the Federal Federal Government
Government for the purposes
of this clause, from profit on
moneys borrowed under a
loan agreement or in respect
of foreign currency instrument
approved by the Federal
Government.
164 78 Profit on debt on foreign Foreign currency n.a.
currency accounts account holders
165 79 Profit on debt derived by non- Citizens of Pakistan n.a.
resident Pakistanis on rupee residing abroad and
accounts remitting foreign
exchange
166 80 Income derived from a private Foreign currency -
foreign currency account held account holder resident
with an authorized bank in individual citizens of
Pakistan, or certificate of Pakistan
investment issued by
investment banks, by a
resident individual who is a
citizen of Pakistan: (This
exemption is not available in
respect of any incremental
deposits made in the said
accounts on or after the 16th
day of December, 1999)
167 90 Profit on debt payable by Financial institutions in n.a.
Pakistani industrial foreign countries
undertakings to financial lending with approval of
institutions in foreign countries Federal Government of
Pakistan
168 90A Profit on debt derived by any Investors/buyers of 4.20
person on bonds issued by bonds issued by
Pakistan Mortgage Refinance Pakistan Mortgage
Company to refinance the Refinance Company
residential housing mortgage
market, for a period of five
years
169 91 Text-book boards of Provinces Text-book boards of 583.40
provinces
170 98 Sports Boards (except Regulators, 61.84
Pakistan Cricket Board). organizations and
boards established by
government to en-
courage major games
and sports
171 99 Collective Investment Collective Investment 16,176.50
Schemes or a REIT Schemes Schemes and REIT
Schemes that are
distributing more than
90% of their incomes to
certificate holders/
shareholders.
172 99A Profits and gains on sale of Taxpayers selling -
immovable property to a REIT immovable property to
Scheme a Developmental REIT
Scheme or a rental
REIT Scheme
173 100 Modarabas Modarabas 261.25
174 101 Venture capital companies & Venture capital 3.63
venture capital funds companies venture
registered under Venture capital funds, and
Capital Companies and Funds Private Equity &
Management Rules, 2000 and Venture Capital Funds.
a Private Equity and Venture
Capital Funds
175 102A Income representing a subsidy Recipients of subsidies 4,508.87
granted by the Federal granted by Federal
Government Government
176 103 Distributions received by a Investors investing in 1.00
taxpayer from collective debt or money market
investment schemes or mutual mutual funds and
funds (which are debt or collective investment
money market funds and do schemes
not invest in shares) out of
capital gains
177 104 Income derived by the Libyan Libyan Arab Foreign -
Arab Foreign Investment Investment Company
Company being dividend of the
Pak-Libya Holding Company.
178 105 Income derived by the Government of 26.00
Government of Kingdom of Kingdom of Saudi
Saudi Arabia being dividend of Arabia
the Saudi-Pak Industrial and
Agricultural Investment
Company Limited.
179 105A Income derived by Kuwait Kuwait Foreign Trading 67.50
Foreign Trading Contracting Contracting &
and Investment Company or Investment Company,
Kuwait Investment Authority and Kuwait Investment
being dividend of the Pak Authority
Kuwait Investment Company
in Pakistan
180 105B Income received by a taxpayer Taxpayers receiving 44.00
from a corporate agricultural dividend income from
enterprise, distributed as corporate agricultural
dividend out of its income from enterprises
agriculture.
181 110B Any gain on transfer of a Members of Stock -
capital asset, being a Exchange
membership right held by a
member of an existing stock
exchange, for acquisition of
shares and trading or clearing
rights acquired by such
member in new corporatized
stock exchange in the course
of corporatization of an
existing stock exchange.
182 110C Any gain by a person on Persons deriving gain -
transfer of a capital asset, being from bonds issued by
a bond issued by Pakistan Pakistan Mortgage
Mortgage Refinance Company Refinance Company
to refinance the residential
housing mortgage market,
during the period from the 1st
day of July, 2018 till the 30th day
of June, 2023.
183 114 Income under the head "capital Industrial undertakings n.a.
gains" derived by industrial set up in "Zones" within
undertakings set up in a "Zone" the meaning of Export
within the meaning of the Processing Zones
Export Processing Zones Authority Ordinance
Authority Ordinance, 1980
184 126 Public sector universities Public sector 10,715.95
universities
185 126A Income derived by China Listed companies 65.12
Overseas Ports Holding
Company Limited, China
Overseas Ports Holding
Company Pakistan (Private)
Limited, Gawadar
International Terminal Limited,
Gawadar Marine Services
Limited and Gawadar Free
Zone Company Limited from
Gawadar Port operations for a
period of twenty three years,
with effect from the sixth day of
February, 2007.
186 126AA Profit and gains derived by a All businesses set up in -
taxpayer from businesses set Gawadar Free Zone
up in the Gawadar Free Zone
Area
187 126AB Profit on debt derived by- Foreign lenders or public -
(a) any foreign lender; or sector banks/State bank
(b) any local bank having having financing
more than 75 per cent agreement with China
shareholding of the Overseas Ports Holding
Government or the State Bank Company Limited
of Pakistan, under a Financing
Agreement with the China
Overseas Ports Holding
Company Limited
188 126AC Income derived by contractors Contractors and sub- 105.52
and sub-con-tractors of China contractors of listed
Overseas Ports Holding companies from
Company Limited, China Gawadar Port
Overseas Ports Holding operations
Company Pakistan (Private)
Limited, Gawadar
International Terminal Limited,
Gawadar Marine Services
Limited and Gawadar Free
Zone Company Limited from
Gawadar Port operations
189 126AD Income derived by China China Overseas Ports -
Overseas Ports Holding Holding Company
Company Limited being Limited
dividend received from China
Overseas Ports Holding
Company Pakistan (Private)
Limited, Gwadar International
Terminal Limited Gwadar
Marine Services Limited and
Gwadar Free Zone Company
Limited
190 126B Profit and gains derived by Khalifa Coastal Refinery -
Khalifa Coastal Refinery
191 126BA Refineries Oil refineries 1,724.66
192 126C Industrial undertakings set up Industrial undertakings -
in Larkano Industrial Estate set up in Larkano
Industrial Estate
193 126D Industrial undertakings set up Industrial undertaking -
in the Gawadar declared by set up in the Gawadar
the Federal Government to be
a Zone within the meaning of
Export Processing Zone
Authority Ordinance, 1980
194 126E Income derived by a zone Zone enterprise as 200.00
enterprise as de-fined in the defined in the Special
Special Economic Zones Act, Economic Zones Act,
2012 and developer of zone for 2012, and developers of
a period of ten years zones.
195 126G Income of Astro Plastics (Pvt) Astro Plastics (Pvt) -
Limited derived from their Limited, M/s. Novatex
project Biaxially Oriented Limited
Polyethylene Terephthalate
(BOPET) Project; and 2.
Income of Novatex Limited
derived from their project
Biaxially Oriented
Polyethylene Terephthalate
(BOPET) Project.
196 126H Income from fruit processing Fruit processing or -
or preservation units set up in preservation units set up
Balochistan Province, in Balochistan Province,
Malakand Division, Gilgit Malakand Division, Gilgit
Baltistan and FATA Baltistan and ex-FATA
197 126I Industrial undertakings Manufacturers of plant, 12.00
engaged in the manufacture of machinery & equipment
plant, machinery, equipment for use in generation of
and items with dedicated use renewable energy
for generation of renewable sources.
energy
198 126J Profits and gains derived by a Industrial undertakings n.a.
taxpayer, from an industrial engaged in operating
undertaking engaged in warehousing or cold
operating warehousing or cold chain facilities for
chain facilities for storage of storage of agriculture
agriculture produce produce
199 126K Profits and gains derived by Halal meat production -
industrial undertakings set up units
for establishing and operating
a halal meat production unit
200 126L Industrial undertakings set up Industrial undertakings 96.55
in the Provinces of Khyber set up in the Provinces
Pukhtunkhwa and Baluchistan of Khyber
Pukhtunkhwa and
Baluchistan between
1st day of July,
2015and 30th day of
June, 2018
201 126M Profits and gains derived by a Companies deriving 4.10
taxpayer from a transmission income from
line project set up in Pakistan transmission line
projects in Pakistan
202 126N Profits and gains derived by a Local cellular mobile 0.40
taxpayer from an industrial phone manufacturers
undertaking, duly certified by
the Pakistan
Telecommunication Authority,
en-gaged in the
manufacturing of cellular
mobile phones
203 126O Profits and gains of a company Green field industrial -
from a green field industrial undertakings
undertaking incorporated on or
after the first day of July, 2019
204 131 Royalty, commission or fees Innovators and 1.50
earned from a foreign technical experts
enterprise in consideration for
the use outside Pakistan of
any patent, invention, model,
design, secret process or
formula or similar property
right
205 132 Profits and gains derived by a Electric power 47,528.40
taxpayer from an electric generation projects
power generation project set
up in Pakistan on or after the
1st day of July, 1988.
206 132A Profit and gains derived by Bosicor Oil Pakistan -
Bosicor Oil Pakistan Limited Limited (refinery)
207 132B Coal mining projects in Sindh, Coal mining projects in -
supplying coal exclusively to Sindh
power generation projects.
208 133 Income from exports of Exporters of computer 1,944.60
computer software or IT software, IT services or
services or IT enabled IT enabled services
services
209 135A Income derived by non- Non-residents deriving -
residents from investment in income from
OGDCL exchangeable bonds investment in OGDCL
issued by the Federal exchangeable bonds
Government. issued by the Federal
Government.
210 136 Income of a special purpose Special purpose -
vehicle as defined in the Asset vehicles as defined in
Backed Securitization Rules, the Asset Backed
1999 Securitization Rules,
1999
211 139 Medical treatment or Employees receiving 1,825.76
hospitalization for employees free medical care from
employers.
212 141 Profit and gains derived by LNG Terminal 1,714.29
LNG Terminal Operators and Operators and
Terminal Owners Terminal Owners
213 142 Income from social security Provincial social 5,636.22
contributions derived by the four security institutions
provincial Social Security
institutions
214 143 Start-ups Startups as defined in 552.75
clause (62A) of section
2 of the ITO-2001
215 145A, Income of individuals Individuals domiciled 4,460.00
146 domiciled or companies and or companies and
associations of persons associations of persons
resident in the erstwhile Tribal resident in the ex-Tribal
Areas Areas
216 16, Others Others 1,203.40
39A,
51, 52
======================================================================================================================
Total 267,115.10
======================================================================================================================
Reduction in Tax Rates
======================================================================================================================
Sr. Legal Description Intended Estimate
Reference (Exemption or Concession) Beneficiary (Rs in
Mln)
1 3 The tax in respect of income Service providers and -
from services rendered outside contractors
Pakistan and construction
contracts executed outside
Pakistan shall be 50% of the
rates as specified in Division III of
Part III of the First Schedule
2 3B The income of Pakistan Cricket Pakistan Cricket Board -
Board derived from sources
outside Pakistan shall be taxed at
a rate of four per cent of the gross
receipts from such sources
3 18 In the case of a Modaraba the rate Modarabas -
of income tax shall be 25% of total
income excluding such part of total
income to which Division III of Part
I of the First Schedule or
section153 or section 154 applies.
4 18A The rate of tax shall be reduced to Companies setting up -
20% for a company setting up an industrial undertakings
industrial undertaking between between 2014 and 2017
the first day of July, 2014 to the
thirtieth day of June, 2017, for a
period of five years beginning from
the month in which the industrial
undertaking is set up or
commercial production is
commenced whichever is later
5 18B The rate of tax shall be reduced by Shariah compliant companies -
2% in case of a company whose whose shares are traded on
shares are traded on stock stock exchange
exchange if it fulfills prescribed
Shariah compliant criteria
approved by State Bank of
Pakistan, Securities and Exchange
Commission of Pakistan and the
Board, and derives income from
manufacturing activities only
6 27 The tax on payments under the Employees (civil servants of 100.00
Compulsory Monetization of BS-20 and above)
Transport Facility for Civil Servants
in BS-20 to BS-22 (as reduced by
deduction of driver's salary) shall
be charged at the rate of 5% as a
separate block of income.
7 28A The rate of tax under section 148 Consumers of Hybrid Cars24.00
on import of hybrid cars shall be
reduced as below:
Up to 1200 cc-100%
1201 to 1800 cc-50%
1801 to 2500 cc-25%
8 28C The rates of tax as specified in E-commerce sector -
Division II of Part-IV of the First
Schedule shall be five per-cent in
the case of a person running online
marketplace as defined in clause
(38B) of section 2.
======================================================================================================================
Total 124.00
======================================================================================================================
Reduction in Tax Liability
======================================================================================================================
Estimate
Legal Description Intended (Rs in
Sr. Reference (Exemption or Concession) Beneficiary Mln)
1 1 (1) Any amount received as flying Employees (persons 91.07
allowance by flight engineers, receiving flying allowance)
navigators of Pakistan Armed
Forces, Pakistani Airlines or Civil
Aviation Authority, Junior
Commissioned Officers or other
ranks of Pakistan Armed Forces;
and submarine allowance by the
officers of the Pakistan Navy, shall
be taxed @ 2.5% as a separate
block of income
2 1 (1AA) Total allowances received by pilots Employees (pilots of 321.18
of any Pakistani airlines shall be Pakistani Airlines)
taxed at a rate of 7.5%, provided
that the reduction under this clause
shall be available to so much of the
allowances as exceeds an amount
equal to the basic pay
3 1 (2) Tax concession for full time Employees (full time teacher 2,425.00
teacher or a researcher or a researcher)
4 4 In respect of old and used Importers of old and used 1.30
automotive vehicles, tax under cars
section 148 shall not exceed the
amount specified in Notification No.
S.R.O. 577 (I)/2005, dated the 6th
June, 2005.
5 7 The amount of tax payable by Foreign film-makers -
foreign Film makers from making
films in Pakistan shall be reduced
by fifty percent on income from film-
making in Pakistan.
-
6 8 The amount of tax payable by Film making companies
resident companies deriving based in Pakistan
income from film-making shall be
reduced by seventy percent on
income from film-making.
7 9 The tax payable on profits and Taxpayers deriving income n.a.
gains derived by a person from low from low cost housing
cost housing projects shall be projects
reduced by fifty percent.
====================================================================================================================================================
Total 2,838.55
====================================================================================================================================================
Exemption from Specific Provisions
====================================================================================================================================================
Estimate
Legal Description Intended (Rs in
Sr. Reference (Exemption or Concession) Beneficiary Mln)
====================================================================================================================================================
1 5 The provisions of section 111 Foreign currency account -
regarding un-explained income or holders
assets shall not apply in respect of
foreign exchange deposited in a
private Foreign Currency account,
excluding such accounts where
incremental deposits were made
on or after the 16th day of
December, 1999
2 11A (iii) Pakistan Red Crescent Society Pakistan Red Crescent 4.52
Society
3 11A (xiv) Corporate and Industrial Corporate and Industrial -
Restructuring Corporation Restructuring Corporation
(CIRC) (CIRC)
4 11A (xxxi) National Disaster Risk National Disaster Risk 57.20
Management Fund. Management Fund.
======================================================================================================================
Note: Other entities under clause 11A which count as tax expenditure have already been
covered in Part 1 of Second Schedule M/s China State 840.00
======================================================================================================================
60A The provisions of section 148 shall
5 Construction Engineering
not apply for import of plant,
machinery and equipment in the Corporation Ltd. (M/s
CSCEC); and M/s China case of:-
Communication
(a) M/s China State Construction
Engineering Corporation Ltd. Construction Company
(M/s CSCEC); and (M/s CCCC).
(b) M/s China Communication
Construction Company (M/s
CCCC).
6 60D The provisions of section 148 shall Industrial undertakings set up 25.00
not apply on import of firefighting in the special economic zones
equipment by industrial
undertakings set up in the special
economic zones established by the
Federal Government.
7 63 M/s Dawat-e-Hadiya, Karachi and M/s Dawat-e-Hadiya, -
Lahore University of Management Karachi and Lahore
Sciences, Lahore] shall be University of
deemed to have been approved by Management Sciences,
the Commissioner for the purpose Lahore
of sub-section (36) of section 2
notwithstanding the provisions of
clause (c) of sub-section (36) of
section 2..
8 71 The provisions of this Ordinance M/s TAISEI Corporation -
shall not be applicable to the M/s
TAISEI Corporation un-der the
agreement between National
Highway Authority, GOP
9 77 Provisions of sections 148 and 153 Importers and suppliers of 1,230.00
shall not be applicable on import items with dedicated use of
and subsequent supply of items renewable sources of energy
with dedicated use of renewable
sources of energy
10 78 Coal Mining and Coal based Power Shareholders of coal mining 0.68
Generation Projects in Sindh:- and coal based power
(i) the dividend income of the generation projects in Sindh
shareholders of such a project
shall be exempt from
provisions of section 150.
(ii) the payments made on
account of sale or supply of
goods or providing or
rendering of services during
project construction and
operations, shall be exempt
from the provisions of section
152 (2A) and section 153."
11 91 The provisions of section 148 Farming sector 530.00
shall not apply to-
(i) Tillage and seed bed
preparation
(ii) equipment as specified below
(iii) Seeding or planting equipment
(iv) Irrigation, drainage and agro-
chemical application
equipment
(v) Harvesting, threshing and
storage equipment
(vi) Post-harvest handling and
processing & miscellaneous
machinery
12 102 The provisions of section 231B Beneficiaries of PM's Youth -
(1A) shall not apply to light Business Loan Scheme
commercial vehicles leased un-
der the Prime Minister's Youth
Business Loan Scheme.
======================================================================================================================
Total 2,687.40
======================================================================================================================
Others/Miscellaneous
======================================================================================================================
Legal Description Intended Estimate
Sr. Reference (Exemption or Concession) Beneficiary (Rs in
Mln)
1 41 Agricultural income Agriculture sector -
2 49 Federal Government, Provincial Government 32,620.45
Government, and Local organizations
Government income.
======================================================================================================================
Total 32,620.45
======================================================================================================================
Grand Total 448,045.70
======================================================================================================================
Sr Summary of Tax Expenditure Estimates of Sales Tax-FY 2020 Rs. Million
======================================================================================================================
1 Zero Rating under 5th Schedule to Sales Tax Act 1990 12,887
2 Exemption under 6th Schedule on (Imports) 173,808
3 Exemption under 6th Schedule on Local supplies (after 30% adjustment) 156,134
4 Reduced Rates Under 8th Schedule (1%) 330
5 Reduced Rates Under 8th Schedule (2%) 90,288
6 Reduced Rates Under 8th Schedule (5%) 27,108
7 Reduced Rates Under 8th Schedule (7%) 496
8 Reduced Rates Under 8th Schedule (8%) 1,396
10 Reduced Rates Under 8th Schedule (10%) 69,592
11 Reduced Rates Under 8th Schedule (12%) 19,321
12 Sales Tax on cellular Mobile Phones under 9th Schedule 27,096
======================================================================================================================
Total 578,456
======================================================================================================================
Tax Exemption under 5th Schedule (Zero rated Items)
======================================================================================================================
S.No SCHEDULE ITEM Beneficiary Tax
Expenditure
1 Section 4 Preparations suitable for Manufacturing 8,202
(Zero Rated) infants, put up for retail (Industrial Inputs)
sale] (PCT Heading General Masses (Food
1901.1000) products)
2 Section 4 Supplies of raw materials Exporters, General 1,934
(Zero Rated) components and goods for Masses
further manufacture of
goods in the Export
Processing Zones.
3 Section 4 Supply, repair or Manufacturing 1,755
(Zero Rated) maintenance of any ship (Industrial Inputs)
which is neither;
4 Section 4 Raw materials, Manufacturing 995
(Zero Rated) components, sub- (Industrial Inputs)
components and parts, if
imported or purchased
locally for use in the
manufacturing of such
plants and machinery as is
chargeable to sales tax at
the
rate of zero percent,
subject to the condition
that the importer
or purchaser of such
goods holds a valid sales
tax registration
showing his registration
category as
manufacturer; and in
case of import , all the
conditions, restrictions,
limitations and
procedures as are
imposed by notification
under section 19 of
the Customs Act,1969 (IV
of 1969), shall apply
5 Section 4 Supply to diplomats, Diplomatic Supplies 842
(Zero Rated) diplomatic missions,
privileged persons and
privileged organizations
which are covered under
various Acts, Orders,
Rules, Regulations and
Agreements passed by the
Parliament or issued or
agreed by the Government
of Pakistan.]
6 Section 4 Pens, ball pens, markers Educational Items 608
(Zero Rated) and porous tipped pens
7 Section 4 Raw materials, packing Manufacturing 439
(Zero Rated) materials, sub- (Industrial Inputs)
components, components, General Masses
sub-assemblies and
assemblies imported or
purchased locally for the
manufacture of the goods
specified at S.no. 12 of 5th
Schedule to Sales Tax Act,
1990, subject to the
conditions, limitations
8 Section 4 Import Of Color sets, Manufacturing 439
(Zero Rated) writing, drawing and (Industrial Inputs)
marking inks and Erasers General Masses
(4016.9210 and), Exercise (educational Items)
Books (4820.2000), Pencil
Sharpener (8214.1000),
Geometry boxes
(9017.2000), Pen, Ball
pens, markers and porous
tipp
9 Section 4 12. Goods and the raw Manufacturing 439
(Zero Rated) materials, packing (Industrial Inputs)
materials, sub- General Masses
components, components,
sub-assemblies and
assemblies imported or
purchased locally for the
manufacture of the said
goods, limitations and
restrictions as specified in
chapter xiv of sale
10 Section 4 12 (xxiv) Pencil sharpeners Manufacturing 303
(Zero Rated) (PCT heading 8214.1000) (Industrial Inputs)
General Masses
(Educational Items)
11 Section 4 Others Manufacturing 266
(Zero Rated) (Industrial Inputs)
General Masses
12 Section 4 Exercise books (PCT Manufacturing 238
(Zero Rated) heading 4820.2000) (Industrial Inputs)
General Masses
(Educational Items)
13 Section 4 Bicycles (PCT heading Manufacturing 140
(Zero Rated) 87.12). (Industrial Inputs)
General Masses
14 Section 4 12 (xxii) Erasers (PCT Manufacturing 138
(Zero Rated) heading 4016.9210 and (Industrial Inputs)
4016.9290) General Masses
(Educational Items)
15 Section 4 1 (ii) Supply, repair or Manufacturing 127
(Zero Rated) maintenance of any (Industrial Inputs)
aircraft which is neither;
16 Section 4 Pencils including color Manufacturing 124
(Zero Rated) pencils (PCT heading (Industrial Inputs)
96.09) General Masses
(Educational Items)
17 Section 4 Supplies made to Manufacturing 115
(Zero Rated) exporters under the Duty (Industrial Inputs)
and Tax Remission Rules, Exporters,
2001 subject to the
observance of procedures,
restrictions and conditions
prescribed therein
18 Section 4 Imports or supplies made Special Economic 96
(Zero Rated) to Gawadar Special Zone, Manufacturing
Economic Zone, excluding (Industrial Inputs)
vehicles falling under
heading 87.02 of the
Pakistan Customs Tariff,
subject to such conditions,
limitations and restrictions
as the 3 [Board] may
impose. ]
19 Section 4 6 Supplies of such locally Manufacturing 80
(Zero Rated) manufactured plant and (Industrial Inputs)
machinery 6 to petroleum
and gas sector Exploration
and Production
companies, their
contractors and sub-
contractors] as may be
specified by the Federal
Government, by
notification in the official
Gazette, subject to such
conditions and restrictions
as may be specified in
such notification.]
20 Section 4 Supplies of locally Manufacturing 51
(Zero Rated) manufactured plant and (Industrial Inputs)
machinery of the following
specifications, to
manufacturers in the
Export Processing Zone,
subject to the conditions,
restrictions and procedure
given below, namely:-
21 Section 4 ship of gross tonnage of Manufacturing 49
(Zero Rated) less than 15 LDT; nor (Industrial Inputs)
22 Section 4 9 Goods exempted under Manufacturing 42
(Zero Rated) section 13, if exported by a (Industrial Inputs)
manufacturer
23 Section 4 12 (xxi) Writing, drawing Manufacturing 39
(Zero Rated) and marking inks (PCT (Industrial Inputs)
heading. General Masses
(Educational Items)
24 Section 4 1 (iii) Supply of spare parts Manufacturing 35
(Zero Rated) and equipment for ships (Industrial Inputs)
and aircraft falling under (i)
and (ii) above.
25 Section 4 1 (v) Supply of equipment Manufacturing 22
(Zero Rated) and machinery for air (Industrial Inputs)
navigation services.
26 Section 4 12 (xxv) Geometry boxes Manufacturing 10
(Zero Rated) (PCT heading 9017.2000) (Industrial Inputs)
General Masses
(educational Items)
27 Section 4 12 (xx) Colors in sets (PCT Manufacturing 6
(Zero Rated) heading 3213.1000). (Industrial Inputs)
General Masses
(Educational Items)
28 Section 4 1 (ii) (b) an aircraft designed Manufacturing 6
(Zero Rated) or adapted for use for (Industrial Inputs)
recreation or pleasure.
29 Section 4 6 (A) supply of Locally Manufacturing 6
(Zero Rated) manufactured plant and (Industrial Inputs)
machinery (EPZ) Exporters
30 Section 4 1 (vi) Supply of equipment Manufacturing 4
(Zero Rated) and machinery for other (Industrial Inputs)
services provided for the
handling of ships or aircraft
in a port or Customs
Airport
31 Section 4 1 (iv) Supply of equipment Manufacturing 3
(Zero Rated) and machinery for pilot (Industrial Inputs)
age, salvage or towage
services.
32 Section 4 Supplies to duty free Manufacturing 3
(Zero Rated) shops, provided that in (Industrial Inputs)
case of clearance from Diplomatic Supplies
duty free shops against and General Masses
various baggage rules
issued under the Customs
Act, 1969, (IV of 1969), the
supplies from duty free
shops shall be treated as
import for the purpose of
levy of sales tax.
33 Section 4 6 (A) supply of Locally Manufacturing 3
(Zero Rated) manufactured plant and (Industrial Inputs)
machinery (EPZ) Export Processing
Zones
34 Section 4 1 (i) (b) a ship designed or Manufacturing 2
(Zero Rated) adapted for use for (Industrial Inputs)
recreation or pleasure.
35 Section 4 6 (A) (iv)Parts of machinery Manufacturing
(Zero Rated) as specified in clauses (i), (Industrial Inputs)
(ii) and (iii), identifiable for
use in or with such
machinery.
36 Section 4 1 (ii) (a) an aircraft of Manufacturing 1
(Zero Rated) weight-less than 8000 (Industrial Inputs)
kilograms; nor
37 Section 4 6 (A) (iii) Mechanical and Manufacturing 1
(Zero Rated) electrical control and (Industrial Inputs)
transmission gear, meant
or adapted for use in
conjunction with
machinery specified in
clause (i); and
38 Section 4 6 (A) (ii) Apparatus, Manufacturing 0
(Zero Rated) appliances and equipment (Industrial Inputs)
specifically meant or
adapted for use in
conjunction with the
machinery specified in
clause (i);
39 Section 4 6 (A) (i) Plant and Manufacturing 0
(Zero Rated) machinery, operated by (Industrial Inputs)
power of any description,
as is used for the
manufacture or production
of goods by that
manufacturer;
======================================================================================================================
Sub Total 17,562
======================================================================================================================
Less Adjustments 4,675
======================================================================================================================
Total 12,887
======================================================================================================================
Adjustments
======================================================================================================================
- Note-I (adjustment in estimation): In case of zero-rated items, the adjustment includes leaving out tax expenditure estimation on some items, which if were not zero-rated, the full input tax would have been claimed, such as crude oil, machinery for E&P sector, and material related to exports. The tax expenditure to the extent of these items is thus deducted from the total estimation of Part 1 (zero rated items). Item-wise cost is below:
Tax Exemption under 5th Schedule (Zero rated Items)
S.No Legal Ref ITEM Beneficiary Tax Expenditure
1 Section 4 Supplies of raw materials components Manufacturing 1,934
(Zero and goods for further] manufacture of (Industrial
Rated) goods in the Export Processing Zones. Inputs)
Exporters,
General Masses
2 Section 4 Raw materials, components, sub- Manufacturing 995
(Zero components and parts, if imported or (Industrial
Rated) purchased locally for use in the Inputs)
manufacturing of such plants and
machinery as is chargeable to sales tax
at the rate of zero percent, subject to the
condition that the importer or purchaser
of such goods holds a valid sales tax
registration showing his registration
category as "manufacturer"; and in case
of import , all the conditions, restrictions,
limitations and procedures as are
imposed by notification under section 19
of the Customs Act,1969 (IV of 1969),
shall apply
3 Section 4 Supply to diplomats, diplomatic missions, Diplomatic 842
(Zero privileged persons and privileged Supplies
Rated) organizations which are covered under
various Acts, Orders, Rules, Regulations
and Agreements passed by the
Parliament or issued or agreed by the
Government of Pakistan.
4 Section 4 Pens, ball pens, markers and porous Educational 608
(Zero tipped pens (PCT heading 96.08) Items/General
Rated) Masses
5 Section 4 7 Supplies made to exporters under the Manufacturing 115
(Zero Duty and Tax Remission Rules, 2001 (Industrial
Rated) subject to the observance of procedures, Inputs),
restrictions and conditions prescribed Exporters
therein.]
6 Section 4 6 Supplies of such locally manufactured Manufacturing 80
(Zero plant and machinery to petroleum and (Industrial
Rated) gas sector Exploration and Production Inputs)
companies, their contractors and sub-
contractors] as may be specified by the
Federal Government, by notification in
the official Gazette, subject to such
conditions and restrictions as may be
specified in such notification.]
7 Section 4 6 (A) Supplies of locally manufactured Manufacturing 51
(Zero plant and machinery of the following (Industrial
Rated) specifications, to manufacturers in the Inputs)
Export Processing Zone, subject to the
conditions, restrictions and procedure
given below, namely:-
8 Section 4 9 Goods exempted under section 13, if Manufacturing 42
(Zero exported by a manufacturer (Industrial
Rated) Inputs),
Exporters,
General Masses
9 Section 4 6 (A) supply of Locally manufactured plant Manufacturing 6
(Zero and machinery (EPZ) (Industrial
Rated) Inputs),
Exporters,
10 Section 4 6 (A) supply of Locally manufactured plant Manufacturing 3
(Zero and machinery (EPZ) (Industrial
Rated) Inputs) Exporters
======================================================================================================================
Total 4,675
======================================================================================================================
EXEMPTION ON IMPORTS UNDER 6TH SCHEDULE
======================================================================================================================
Legal Intended Estimates
Sr Reference ITEM Beneficiary In Million
======================================================================================================================
11 6th 12. machinery, equipment and other Manufacturing 58,507
Schedule- project related items including capital (Industrial Inputs)
Table-3 goods, for setting up of hotels, power General Masses
generation plants, water treatment plants
and other infrastructure related projects
located in an area of 30 km around the
zero point
12 6th 24 Edible oils and vegetable ghee, Manufacturing 57,204
Schedule- including cooking oil, on which Federal (Industrial Inputs)
Table-1 Excise Duty is charged, levied and General Masses
collected by a registered manufacturer or (Food Products)
importer as if it were a tax payable under
section 3 of the Act.
13 6th 8.1 exemption of Sales Tax @ 0% on Manufacturing 27,900
Schedule- Machinery and equipment meant for (Industrial Inputs)
Table-3 power transmission and grid stations General Masses
including under construction projects.
subject to condition given at S.No. 8 of
Annexure of Table-III of 6th Schedule to
the Sales Tax Act, 1990.
14 6th 105 Raw materials for the basic Manufacturing 21,048
Schedule- manufacture of pharmaceutical active (Industrial Inputs),
Table-1 ingredients and for manufacture of
pharmaceutical products, provided that Health Sector
in case of import, only such raw materials General Masses
shall be entitled to exemption which are
liable to customs duty not exceed
15 6th 104 Substances registered as drugs Health Sector 19,675
Schedule- under the Drugs Act, 1976 (XXXI of Manufacturing
Table-1 1976) and medicaments as are (Pharmaceutical
classifiable under Chapter 30 of the First Industrial Inputs)
Schedule to the Customs Act, 1969 (IV of General Masses
1969) except the following, even if
medicated or medicinal in nature
16 6th 6.1 exemption of Sales Tax @ 0% on Manufacturing 18,279
Schedule- Machinery, equipment and spares meant (Industrial Inputs)
Table-3 for initial installation, balancing,
modernization, replacement or
expansion of projects for power
generation through gas, coal, hydel, and
oil including under construction projects.
17 6th Pulses. General Masses, 15,605
Schedule- Food products
Table-1
18 6th 24. Edible oils and vegetable ghee Manufacturing 12,478
Schedule- including cooking oil on which federal (Industrial Inputs)
Table-1 excise duty is charged, levied and General Masses
collected by a registered manufacturer or food products
importer as if it were a tax payable under
section 3 of the act.
19 6th 133 Pesticides and their active Agriculture Sector 11,990
Schedule- ingredients registered by the department General Masses
Table-1 of plant protection under the Agricultural
Pesticides Ordinance, 1971 (II of 1971),
stabilizers, emulsifiers and solvents
namely:-Details given at the S.No. 133
of Table 1 of 6th Schedule
20 6th 14A.7. (a) PV Modules. Manufacturing 8,281
Schedule- (Industrial Inputs)
Table-3 General Masses
21 6th Exemption of Sales Tax @ 0% on Coal Mining sector 3,927
Schedule- mining machinery, equipment, spares (Industrial Inputs)
Table-3 including vehicles for site use i.e single or
double cabin pick-ups and dump trucks
imported for Thar Coal Field-subject to
condition given at S.No. 4 of Annexure of
Table-III
22 6th Edible fruits excluding imported fruits General Masses 3,313
Schedule- (except fruits imported from Afghanistan) Food Items
Table-1 whether fresh, frozen or otherwise
preserved but excluding those bottled or
canned.
23 6th Live animals and live poultry respective Poultry General 3,208
Schedule- headings of chapter 1. Masses
Table-1
24 6th Edible vegetables including roots and Manufacturing 3,160
Schedule- tubers, except ware potato and onions, (Industrial Inputs)
Table-1 whether fresh, frozen or otherwise General Masses
preserved (e.g. in cold storage) but
excluding those bottled or canned.
25 6th 132 Personal computers General Masses 2,920
Schedule-
Table-1
26 6th 61 Respective Headings Manufacturing 2,814
Schedule- (Industrial Inputs)
Table 1 General Masses
27 6th 84 Preparations suitable for infants, put Manufacturing 2,738
Schedule- up for retail sale (Industrial Inputs)
Table-1 General Masses
28 6th 153 Steel billets, ingots, ship plates, bars Steel Sector 2,424
Schedule- and other long re-rolled profiles, on such (Industrial Inputs)
Table-1 imports and supplies by the General Masses
manufacturer on which federal excise
duty is payable in sales tax mode
29 6th 73A Milk and Cream , concentrated or Manufacturing 2,402
Schedule- containing added sugar or other (Industrial Inputs)
Table-1 sweetening matter, excluding that sold in General Masses/
retail packing under a brand name Food Items
30 6th 20 Seeds, fruit and spores of a kind used Agriculture Sector 2,335
Schedule- for sowing. (Industrial Inputs)
Table-1 General Masses
31 6th 120 Diagnostic kits or equipment, Health Sector 2,320
Schedule- namely:-HIV Kits , 4C Es Trionyx , 5C (Industrial Inputs)
Table-1 Cell control normal , Bovine precision General Masses
multi sera , Pregnancy test , DNA SSP
DRB Generic IC , Reticulocyte count
(control) Retic C Control , Kit for vitamin
B12 estimation , Ferritin
32 6th 5.1 exemption of Sales Tax @ 0% on Manufacturing 2,010
Schedule- Machinery, equipment and spares meant (Industrial Inputs)
Table-3 for initial installation, balancing, General Masses
modernization, replacement or
expansion of projects for power
generation through oil, gas, coal, wind
and wave energy including under
construction p
33 6th 131 Laptop computers, notebooks General Masses 1,965
Schedule- whether or not incorporating multimedia
Table-1 kit
34 6th 141 Preparation for making animal feed Manufacturing 1,904
Schedule- (Industrial Inputs)
Table-1 General Masses
35 6th 32 Newsprint, newspapers, journals, General Masses 1,785
Schedule- periodicals, books but excluding Educational Items
Table-1 directories.
36 6th 19 Cereals and products of milling Manufacturing 1,556
Schedule- industry excluding the products of milling (Industrial Inputs)
Table-1 industry, other than wheat and meslin General Masses,
flour, as sold in retail packing bearing food products
brands name or a trade mark.
37 6th 7.1 exemption of Sales Tax @ 0% on Manufacturing 1,266
Schedule- Machinery, equipment and spares meant (Industrial Inputs)
Table-3 for initial installation, balancing, General Masses
modernization, replacement or
expansion of projects for power
generation through nuclear and
renewable energy sources like solar,
wind, micro-hydel
38 6th 151 Imports of plant, machinery, FATA/PATA 1,264
Schedule- equipment for installation in tribal areas
Table-1 and of industrial inputs by the industries
located in the tribal areas, as defined in
the Constitution of Islamic Republic of
Pakistan subject to furnishing of security
39 6th 117. 3006.9100, 118. 3926.9050, 119. Manufacturing 1,142
Schedule- 8539.3930, 120. 3822.0000, 121. (Industrial Inputs)
Table-3 respective heading, 122. respective General Masses
headings, 123. 8802.4000, 124.
respective headings, 125. respective
headings, 126. respective headings, 127.
respective headings, 128. respective
head
40 6th 13. edible vegetables including roots and General Masses 955
Schedule- tubers, whether fresh, frozen or (Food Products)
Table-1 otherwise preserved (e.g. in cold
storage) but excluding potato onion
those bottled or canned under respective
PCT headings
41 6th 124 Maintenance kit for use in trainer Manufacturing 937
Schedule- aircrafts of PCT headings 8802.2000 and (Industrial Inputs)
Table-1 8802.3000
42 6th 102. Machinery. equipment and Manufacturing 741
Schedule- materials imported either for exclusive (Industrial Inputs)
Table-1 use within the limits of EPZ or for making Exporters
exports there from, and goods imported
for warehousing purpose in EPZ, subject
to the conditions that such machinery,
equipment, materials
43 6th 17 Ginger excluding those sold in retail General Masses 738
Schedule- packing bearing brand names and (Food Products)
Table-1 trademarks.
44 6th 85 Fat filled milk, excluding that sold in General Masses 738
Schedule- retail packing under a brand name or a (Food Products)
Table-1 trademark
45 6th 45 Dextrose and saline infusion giving Health Sector 719
Schedule- sets along with empty non-toxic bags for (Industrial Inputs)
Table-1 infusion solution, Dextrose and saline General Masses
infusion giving sets, Artificial parts of the
body, Intra-Ocular lenses and Glucose
testing equipment.
46 6th 76 Whey, excluding that sold in retail General Masses 685
Schedule- packing under a brand name (Food Products)
Table-1
47 6th 6.2 exemption of Sales Tax @ 0% on Manufacturing 569
Schedule- Construction machinery, equipment and (Industrial Inputs)
Table-3 specialized vehicles, excluding Construction
passenger vehicles, imported on Industry/General
temporary basis as required for the Masses
construction of project.-subject to
condition given at S.No. 6 of Annexure of
Table-I
48 6th 12. live plants including bulbs roots and General Masses 562
Schedule- the like under respective PCT headings
Table-1
49 6th 100 Construction materials to Gawadar Export Processing 547
Schedule- Export Processing Zone's investors and Zone
Table-1 to Export Processing Zone Gawadar for
development of Zone's infrastructure
50 6th 14. pulses under respective PCT General Masses 536
Schedule- headings
Table-1
51 6th 15A-I Parts and Components for Manufacturing 531
Schedule- manufacturing LED lights:-(i). Aluminum (Industrial Inputs)
Table-3 Housing/Shell for LED (LED Light General Masses
Fixture)
52 6th 02. following machinery, equip., Health Sector 522
Schedule- apparatus, & medical, surgical, dental & (Industrial Inputs)
Table-3 vet. furniture, materials, fixtures and General Masses
fittings imported by hospitals and medical
or diagnostic institutes:-medical
equipment sr. (1) to (13) b.
cardiology/cardiac surgery equipment
53 6th 15 (ix). PV module, with or without, the Manufacturing 493
Schedule- related components including invertors (Industrial Inputs)
Table-3 (off-grid/on grid/hybrid) with provision for General Masses
direct connection/input from renewable
energy source and with Maximum Power
Point Tracking (MPPT), charge
controllers and solar batteries
54 6th 1 Live Animals and live poultry Poultry Sector 477
Schedule- General Masses
Table-1
55 6th 19 Plant and machinery, except the items Special Economic 383
Schedule- listed under Chapter 87 of the Pakistan Zones General
Table-3 Customs Tariff, imported for setting up of Masses
a Special Economic Zone (SEZ) by zone
developers and for installation in that
zone by zone enterprises, on one time
basis as prescribe
56 6th 156 exemption of Sales Tax @ 0% on 6. Manufacturing 383
Schedule- PV module, with or without, the related (Industrial Inputs)
Table-3 components including invertors, charge General Masses
controllers and batteries-Items for
promotion of renewable energy
technologies subject to certification by
Alternative Energy Development
57 6th 14.1.v. Inverters (off-grid/on-grid/hybrid Manufacturing 372
Schedule- with provision for direct connection/input (Industrial Inputs)
Table-3 renewable energy source and with General Masses
Maximum Power Point Tracking (MPPT).
58 6th 103. import and supply thereof, up to the Manufacturing 353
Schedule- year 2020, of ships of gross tonnage of (Industrial Inputs)
Table-1 less than 15 LDT and all floating crafts
including tugs, dredgers, survey vessels
and other specialized crafts purchased or
bare-boat chartered by a Pakistan entity
59 6th 15A (iii). Constant Current Power Supply Manufacturing 342
Schedule- for of LED Lights (1-300W) (Industrial Inputs)
Table-3 General Masses
60 6th 46 Exemption of Sales Tax under Serial Manufacturing 321
Schedule- No 46 to 59 of 6th Schedule of Sales Tax, (Industrial Inputs)
Table-1 Act where exemption of Customs Duty is
claimed under chapter 99.
61 6th 15A (ii). Metal Clad Printed Circuit Boards Manufacturing 321
Schedule- (MCPCB) for LED (Industrial Inputs)
Table-3 General Masses
62 6th 98 Pencils including colour pencils Manufacturing 291
Schedule- (Industrial Inputs)
Table-1 General Masses
63 6th 112 cardiology/cardiac surgery, Health Sector 260
Schedule- neurovascular, electrophysiology, endo- (Industrial Inputs)
Table-1 surgery, endoscopy, oncology, urology, General Masses
gynecology, disposables and other
equipment as stated in serial 112 of
Table I of 6th schedule.
64 6th 14. Following items for use with solar Manufacturing 260
Schedule- energy, Solar Power Systems (Industrial Inputs)
Table-3 General Masses
65 6th 15 (xv). Invertors (off-grid/on grid/hybrid) Manufacturing 259
Schedule- with provision for direct connection/input (Industrial Inputs)
Table-3 from renewable energy source and with General Masses
Maximum Power Point Tracking (MPPT).
66 6th 8.2 exemption of Sales Tax @ 5% on Manufacturing 229
Schedule- Construction machinery, equipment and (Industrial Inputs)
Table-3 specialized vehicles, excluding General Masses
passenger vehicles, imported on
temporary basis as required for the
construction of project.-subject to
condition given at S. No. 8 of Annexure
of Table-3
67 6th 60 Contraceptives and accessories Health Sector 225
Schedule- thereof. (Industrial Inputs)
Table-1 General Masses
68 6th 150 Plant and machinery excluding Manufacturing 206
Schedule- consumer durable goods and office (Industrial Inputs)
Table-1 equipment as imported by greenfield
industries, intending to manufacture
taxable goods, during their construction
and installation period subject to
conditions noted below and issuance of
exe
69 6th 15B-CKD kits for single cylinder Agriculture Sector 206
Schedule- agriculture diesel engines (compression- (Industrial Inputs)
Table-3 ignition internal combustion piston
engines) of 3 to 36 HP.
70 6th 130 Sodium Iron (Na Fe EDTA), and Manufacturing 203
Schedule- other premixes of vitamins, minerals and (Industrial Inputs)
Table-1 micro-nutrients (food grade) and subject General Masses
to conditions imposed for importation
under the Customs Act, 1969
71 6th 153 steel billets, ingots, ship plates, bar Steel Sector, 202
Schedule- and other long re-rolled profiles, on such Manufacturing
Table-1 imports and supplies by the (Industrial Inputs)
manufacturer on which federal excise General Masses
duty is payable in sales tax mode.
72 6th 125 Spare parts for use in aircrafts, Manufacturing 198
Schedule- trainer aircrafts or simulators (Industrial Inputs)
Table-1
73 6th 121 Blood bag CPDA-1 with blood Health Sector 194
Schedule- transfusion set pack in ammonium foil (Industrial Inputs)
Table-1 with set General Masses
74 6th 113 High Efficiency Irrigation Equipment. Agriculture Sector 193
Schedule- (If used for agriculture sector) 1) General Masses
Table-1 Submersible pumps (up to 75 lbs. and
head 150 meters) 2) Sprinklers
including high and low pressure (center
pivotal) system, conventional sprinkler
equipment, water reel travel
75 6th 135 Sunflower and canola hybrid seeds Agriculture Sector 185
Schedule- meant for sowing General Masses
Table-1
76 6th 26 Fruit juices, whether fresh, frozen or Manufacturing 182
Schedule- otherwise preserved but excluding those (Industrial Inputs)
Table-1 bottled, canned or packaged. General Masses
(Food Products)
77 6th 88 Erasers Manufacturing 176
Schedule- (Industrial Inputs)
Table-1 General Masses
78 6th 14A.4.b.i Parts for Solar Desalination Manufacturing 175
Schedule- System, (i). Solar photo voltaic panels. (Industrial Inputs)
Table-3 General Masses
79 6th 93 Bicycles Manufacturing 171
Schedule- (Industrial Inputs)
Table-1 General Masses
80 6th 146 Equipment imported by M/s China Mass Transit 171
Schedule- Railway Corporation to be furnished and System/General
Table-1 installed in Lahore Orange Line Metro Masses
Train Project subject to the conditions as
contained in Sr No 146 of Table-1 of the
6th-Schedule (Sales Tax) Act 1990.
81 6th 61.goods produced or manufactured in Exporter/Importers, 162
Schedule- and exported from Pakistan which are Manufacturing
Table-1 subsequently imported in Pakistan within (Industrial Inputs)
one year of their exportation provided General Masses
conditions of section 22 of the customs
act 1969 (iv of 1969) are complied with
under respective PCT
82 6th 102 Machinery, equipment and materials Exporters, 158
Schedule- imported either for exclusive use within Manufacturing
Table-1 the limits of Export Processing Zone or (Industrial Inputs)
for making exports therefrom, and goods General Masses
imported for warehousing purpose in
Export Processing Zone, subject to the
conditions that such mac
83 6th 14A.7.b.i Parts for PV Modules, (i). Solar Manufacturing 151
Schedule- cells. (Industrial Inputs)
Table-3 General Masses
84 6th 14A.15. Any other item approved by the Manufacturing 151
Schedule- Alternative Energy Development Board (Industrial Inputs)
Table-3 (AEDB) and concurred to by the FBR. General Masses/
Alternative Energy
Development
85 6th 116. plant, machinery and equipment Manufacturers in 150
Schedule- imported for setting up industries in fata (Industrial Inputs)
Table-1 subject to the same conditions and General Masses
procedure as are applicable for import of
such plant, machinery and equipment
under the customs act, 1969 (iv of 1969).
under respective head
86 6th 94 Wheelchairs General Masses/ 149
Schedule- “differently-abled
Table-1 persons
87 6th 15A (iv). Lenses for LED lights Manufacturing 145
Schedule- (Industrial Inputs)
Table-3 General Masses
88 6th 134 Goods received as gift or donation General masses 145
Schedule- from a foreign government or and Governments
Table-1 organization by the Federal or Provincial
Governments or any public sector
organization subject to
recommendations of the Cabinet Division
and concurrence by the Federal Board of
Revenue
89 6th 13 exemption of Sales Tax @ 0% on Manufacturing 135
Schedule- Effluent treatment plants-subject to (Industrial Inputs)
Table-3 conditions. Subject to conditions given in General Masses
the preamble of Table-3 of 6th Schedule
to the Sales Tax Act, 1990.
90 6th 14 (1) i Off grid/On-grid solar power Energy Sector 129
Schedule- system (with or without provision for Manufacturing
Table-3 USB/charging port) comprising of : i. PV (Industrial Inputs)
Module. General Masses
91 6th 101 Raw and pickled hides and skins, Leather Sector 128
Schedule- wet blue hides and skins, finished Exporters
Table-1 leather, and accessories, components Manufacturing
and trimmings, if imported by a (Industrial Inputs)
registered leather goods manufacturer, General Masses
for the manufacture of goods wholly for
export, provided that conditions
92 6th 148 Imported construction materials and Road and 110
Schedule- goods imported by M/s China State Highways/
Table-1 Construction Engineering Corporation General Masses
Limited (M/s CSCECL), whether or not
locally manufactured, for construction of
Karachi-Peshawar Motorway (Sukkur-
Multan Section) subject to fulfilment
93 6th 143 (i) Hearing aids (all types and kinds) Manufacturing 99
Schedule- (ii) Hearing assessment equipment; (a) (Industrial Inputs)
Table-1 Audiometers (b) Tympanometer (c) ABR General Masses
d) Oto Acoustic Omission Differently-abled
persons
94 6th 52. goods imported by or donated to Health Sector 91
Schedule- hospitals run by the federal government General Masses
Table-1 or a provincial government and non-profit
making educational and research
institutions subject to the similar
restrictions, limitations, conditions and
procedures as are envisaged
95 6th 3.1 exemption of Sales Tax @ 5% on General Masses 89
Schedule- Machinery, equipment, materials, capital
Table-3 goods, specialized vehicles (4x4 non
luxury) i.e single or double cabin
pickups, accessories, spares, chemicals
and consumables meant for mine
construction phase or extraction phase
96 6th 3. fish and crustaceans excluding live (Food Products) 89
Schedule- fish whether or not fresh, frozen or General Masses
Table-1 otherwise preserved
97 6th 5.2 exemption of Sales Tax @ 0% on Construction 87
Schedule- Construction machinery, equipment and Industry General
Table-3 specialized vehicles, excluding Masses
passenger vehicles, imported on
temporary basis as required for the
construction of project.-subject to
condition given at S.No. 5 of Annexure of
Table-I
98 6th 46. goods imported by various agencies Manufacturing 87
Schedule- of the united nations, diplomats, (Industrial Inputs)
Table-1 diplomatic missions, privileged persons Diplomatic
and privileged organizations which are Missions/General
covered under various act and orders, Masses
rules and regulations made thereunder
and agreements by the federal
government
99 6th 14.1. iii. Batteries for specific utilization Manufacturing 83
Schedule- with the system (not exceeding 50 Ah in (Industrial Inputs)
Table-3 case of portable system). General Masses
100 6th 14A.4.b.v Inverters (off grid/on grid/ Energy Sector 72
Schedule- hybrid) with provision for direct Manufacturing
Table-3 connection/input from renewable energy (Industrial Inputs)
source and with Maximum Power Point General Masses
Tracking (MPPT)
101 6th 110 The following items with dedicated Energy Sector 71
Schedule- use of renewable source of energy like Manufacturing
Table-1 solar and wind, subject to certification by (Industrial Inputs)
the Alternative Energy Development General Masses/
Board (AEDB), Islamabad:-as listed at Alternative Energy
sub-serial number (a) to (j). Development
102 6th 97 Pens, ball pens, markers and porous Manufacturing 69
Schedule- tipped pen (Industrial Inputs)
Table-1 General Masses/
Educational Items
103 6th 20. seeds , fruit and spores of a kind used Manufacturing 66
Schedule- for sowing under respective PCT (Industrial Inputs)
Table-1 headings General Masses
104 6th 83 Meat and similar products of prepared (Food Products) 61
Schedule- frozen or preserved meat or meat offal of General Masses
Table-1 all types including poultry meat and fish
excluding those sold in retail packing
under a brand name or a trademark
105 6th Combined harvesters up to five years old Manufacturing 53
Schedule- (Industrial Inputs)
Table-1 General Masses
106 6th Exemption of Sales Tax on Machinery Manufacturing 53
Schedule- and equipment for initial installation, (Industrial Inputs)
Table-3 balancing, modernization, replacement General Masses
or expansion of desalination plants, cola-
firing system, gas processing plants and
oil and gas field prospecting. Subject to
conditions given
107 6th Goods Imported by or donated to Health Sector 50
Schedule- hospitals run by the Federal or Provincial General Masses
Table-1 Government; and non-profit making
educational and research institutions,
limitations, conditions and procedures as
are envisaged for the purpose of
applying zero-rate of customs d
108 6th import of all goods received, in the event General Masses 50
Schedule- of a natural disaster or other catastrophe,
Table-1 as gifts and relief consignments,
including goods imported for the
president’s fund for afghan refugees,
relief goods donated for afghan refugees,
gifts for president’s f
109 6th Machinery, equipment, raw materials, Manufacturing 48
Schedule- components and other capital goods for (Industrial Inputs)
Table-3 use in building, fittings, repairing or
refitting of ships, boats or floating
structures imported by Karachi Shipyard
and Engineering Works Limited.
110 6th 149 Micro feeder equipment Manufacturing 47
Schedule- (Industrial Inputs)
Table-1 General Masses
111 6th 142 Promotional and advertising material Media 47
Schedule- including technical literature, pamphlets, Manufacturing
Table-1 brochures and other giveaways of no (Industrial Inputs)
commercial value, distributed free of cost General Masses
by the exhibitors
112 6th 115. plant, machinery and equipment Manufacturing 44
Schedule- imported for setting up fruit processing (Industrial Inputs)
Table-1 and preservation units in Gilgit-Baltistan, General Masses
Balochistan province and Malakand
division subject to the same conditions
and procedure as are applicable for
import of such plant, ma
113 6th 3.2 exemption of Sales Tax @ 0% on General Masses 42
Schedule- Construction machinery, equipment and
Table-3 specialized vehicles, excluding
passenger vehicles, imported on
temporary basis as required for mine
construction or extraction phase-subject
to condition given at S.No. 3 of Annexure
114 6th 15 (v). Solar torches. (Industrial Inputs) 41
Schedule- General Masses
Table-3
115 6th 140 Bovine Semen General Masses 40
Schedule-
Table-1
116 6th 14. following items with dedicated use of Energy Sector 38
Schedule- renewable source of energy like solar, Manufacturing
Table-3 wind, geothermal etc:-(1)solar home (Industrial Inputs)
systems. (2)solar parabolic trough power General Masses
plants. (3)solar dish sterling
engine. (4)solar air conditioning
system. (5)solar desalination system
117 6th 15 (xiv). Sun Tracking Control System Manufacturing 38
Schedule- (Industrial Inputs)
Table-3 General Masses
118 6th 12 exemption of Sales Tax @ 0% on Energy Sector 38
Schedule- Machinery, equipment and other project Manufacturing
Table-3 related items including capital goods, for (Industrial Inputs)
setting up of hotels, power generation General Masses
plants, water treatment plants and other
infrastructure related projects located in
an area of 30 km a
119 6th 15 (xii). Energy saver lamps of varying Energy Sector 36
Schedule- voltages Manufacturing
Table-3 (Industrial Inputs)
General Masses
120 6th 11 Eggs including eggs for hatching Poultry Sector 36
Schedule- Manufacturing
Table-1 (Industrial Inputs)
General Masses
121 6th 15. edible fruits excluding imported fruits (Food Products) 35
Schedule- (except fruits imported from General Masses
Table-1 Afghanistan) whether fresh, frozen or
otherwise preserved but excluding those
bottled or canned under respective PCT
headings (0810.3000 omitted)
122 6th 2 Meat of bovine animals, sheep and Manufacturing 34
Schedule- goat, excluding poultry and offal, whether (Industrial Inputs)
Table-1 or not fresh, frozen or otherwise, General Masses
preserved or packed
123 6th 12 Live plants including bulbs, roots and Manufacturing 34
Schedule- the like. (Industrial Inputs)
Table-1 General Masses
124 6th 14A.5. Solar Thermal Power Plants with Manufacturing 33
Schedule- accessories. (Industrial Inputs)
Table-3 General Masses
125 6th 100A Materials and equipment (plant, Manufacturing 32
Schedule- machinery, equipment, appliances and (Industrial Inputs)
Table-1 accessories) for construction and General Masses/
operation of Gwadar Port and Economic zones
development of Free Zone for Gwadar
Port as imported by or supplied to China
Overseas Ports Holding Company
Limited (COPHCL
126 6th 108 Components or sub-components of Manufacturing 31
Schedule- energy saver lamps, namely:-(a) (Industrial Inputs)
Table-1 Electronic Circuit (b) Plastic Caps General Masses
Upper and Lower) (c) Base Caps B22
and E27 (d) Tungsten Filaments (e)
Lead-in-wire (f) Fluorescent Powder (Tri
Band Phospher) (g) Adhesive Additive
127 6th 87 Writing, drawing and marking inks Manufacturing 30
Schedule- (Industrial Inputs)
Table-1 General Masses
128 6th 122 Urine drainage bags Health Sector 29
Schedule- Manufacturing
Table-1 (Industrial Inputs)
General Masses
129 6th 15 (xi). Water pumps operating on solar Manufacturing 29
Schedule- energy along with solar pump controllers (Industrial Inputs)
Table-3 General Masses
130 6th 80 Processed cheese not greeted or (Food Products) 28
Schedule- powdered, excluding that sold in retail General Masses
Table-1 packing under a brand name
131 6th 130 Import and supply thereof, up to the Manufacturing 27
Schedule- year 2020, of ships and all floating crafts (Industrial Inputs)
Table-1 including tugs, dredgers, survey vessels General Masses
and other specialized crafts purchased or
bare-boat chartered by a Pakistan entity
and flying
132 6th 33. currency notes, bank notes, shares, General Masses 27
Schedule- stocks and bonds under PCT 49.07
Table-1
133 6th 14A.4.b (ii). Solar water pumps. Manufacturing 25
Schedule- (Industrial Inputs)
Table-3 General Masses
134 6th 15 (xiii). Energy Saving Tube Lights. Manufacturing 25
Schedule- (Industrial Inputs)
Table-3 General Masses
135 6th 106 Import of Halal edible offal of bovine General Masses 24
Schedule- animals. Food Items
Table-1
136 6th 114 Green House Farming and Other agriculture sector 24
Schedule- Green House Equipment consisting of Manufacturing
Table-1 plastic covering and mulch film, anti- (Industrial Inputs)
insect net and shade net (If used for General Masses
agriculture sector) 1) Tunnel farming
equipment. 2) Greenhouses
prefabricated).
137 6th 14A.7.b.iiTempered Glass. Manufacturing 24
Schedule- (Industrial Inputs)
Table-3 General Masses
138 6th 11. eggs including eggs for hatching Poultry Sector 24
Schedule- under respective headings Manufacturing
Table-1 (Industrial Inputs)
General Masses
139 6th 129 Import of plant, machinery and Manufacturing 23
Schedule- production line equipment used for the (Industrial Inputs)
Table-1 manufacturing of mobile phones by the General Masses
local manufacturers of mobile phones
duly certified by Pakistan
Telecommunication Authority
140 6th 127 Operational tools, machinery, Manufacturing 20
Schedule- equipment and furniture and fixtures on (Industrial Inputs)
Table-1 one-time basis for setting up Greenfield General Masses
airports by a company authorized by
Aviation Division
141 6th 109 Goods imported temporarily with a Manufacturing 18
Schedule- view to subsequent exportation, as (Industrial Inputs)
Table-1 concurred by the Board, including General Masses
passenger service item, provision and
stores of Pakistani Airlines.
142 6th 86 Colors in sets (Poster colors) Manufacturing 18
Schedule- (Industrial Inputs)
Table-1 General Masses
143 6th 14A.12.b.i Turbine with Generator/ Manufacturing 18
Schedule- Alternator. (Industrial Inputs)
Table-3 General Masses
144 6th 100D Machinery, equipment, materials Exporters 18
Schedule- and goods imported either for exclusive Manufacturing
Table-1 use within the limits of Gwadar Free (Industrial Inputs)
Zone, or for making exports therefrom,
subject to the conditions that such
machinery, equipment, materials and
goods, are imported by investors of
145 6th 76. WHEY 04.04 Food Products 16
Schedule- General Masses
Table-1
146 6th 11.7 exemption of Sales Tax @ 0% on 7) Manufacturing 16
Schedule- Machine and tool for stone work; sand (Industrial Inputs)
Table-3 blasting machines; tungsten carbide General Masses
tools; diamond tools & segments (all type
& dimensions), hydraulic jacking
machines, hydraulic manual press
machines, air/hydro pillows, compress
147 6th 96 Other drawing, marking out or Manufacturing 15
Schedule- mathematical calculating instruments (Industrial Inputs)
Table-1 (geometry box) General Masses
148 6th 79 Cheese, excluding that sold in retail Food Products 15
Schedule- packing under a brand name General Masses
Table-1
149 6th 14A.7.b.ix Ribbon for PV Modules (made Manufacturing 14
Schedule- of silver & Lead). (Industrial Inputs)
Table-3 General Masses
150 6th 137 Paper weighing 60 g/m2 for printing Manufacturing 14
Schedule- of Holy Quran imported by Federal or (Industrial Inputs)
Table-1 Provincial Governments and Nashiran-e- General Masses
Quran as per quota determined by IOCO
151 6th 92 Sewing machines of the household General Masses 13
Schedule- type
Table-1
152 6th 123 Aircraft, whether imported or Manufacturing 13
Schedule- acquired on wet or dry lease (Industrial Inputs)
Table-1 General Masses
153 6th 14A.7.b.iii Aluminum frames. Manufacturing 12
Schedule- (Industrial Inputs)
Table-3 General Masses
154 6th 32. News Print, News Papers, Journals, Media General 12
Schedule- Periodicals Books But Excluding Masses
Table-1 Directories Under Respective PCT
Headings
155 6th 07. (1) machinery, equip. & spares meant Manufacturing 12
Schedule- for initial installation, balancing, (Industrial Inputs)
Table-3 modernization, replacement or General Masses
expansion of projects for power gen.
through nuclear & renewable energy
sources like solar, wind, micro-hydel bio-
energy, ocean, waste-to-energy
156 6th 3 Fish and crustaceans excluding live Food Products 11
Schedule- fish whether or not fresh, frozen or General Masses
Table-1 otherwise preserved or packed
157 6th 51.impoted samples, subject to the same Manufacturing 11
Schedule- condition as are envisages for the (Industrial Inputs)
Table-1 purposes of applying zero-rate of General Masses
customs duty under customs act 1969 (iv
of 1969) under respective PCT headings
158 6th 14.1.ii. Charge controller. Manufacturing 11
Schedule- (Industrial Inputs)
Table-3 General Masses
159 6th 31 Holy Quran, complete or in parts, with General Masses 10
Schedule- or without translation; Quranic Verses
=========================================================================================================================================
Table-1 recorded on any analogue or digital
media; other Holy books.
160 6th 92. Sewing machines of the household Manufacturing 10
Schedule- (Industrial Inputs)
Table-1 General Masses
161 6th 16 Red chilies excluding those sold in Food Products 10
Schedule- retail packing bearing brand names and Manufacturing
Table-1 trademarks. (Industrial Inputs)
General Masses
162 6th 112. Following cardiology/cardiac Health Sector 9
Schedule- surgery, neurovascular, General Masses
Table-1 electrophysiology, Endosurgery,
endoscopy, oncology, urology,
gynecology, disposables & other equip:-
a. angioplasty products. sr.1-6, b.
angiography products. sr. 1-6, contrast
media for angiography
163 6th 18 Turmeric excluding those sold in retail Food Products 8
Schedule- packing bearing brand names and Manufacturing
Table-1 trademarks. (Industrial Inputs)
General Masses
164 6th 01. Machinery and equipment for initial Manufacturing 8
Schedule- installation, balancing, modernization, (Industrial Inputs)
Table-3 replacement or expansion of desalination General Masses
plants, coal firing system, gas processing
plants and oil and gas field prospecting
under respective headings.
165 6th 14A.2.b.i Parts for Solar Dish Sterling Manufacturing 7
Schedule- Engine. (i). Solar concentrating dish. (Industrial Inputs)
Table-3 General Masses
166 6th 2 meat of bovine animals sheep and General Masses 7
Schedule- goad, excluding poultry and offal,
Table-1 whether or not fresh, frozen of otherwise
preserved PCT 02.01 02.02 and 02.04
167 6th 82. Frozen, prepared or preserved Food Products 7
Schedule- sausages and similar products of poultry Manufacturing
Table-1 meat or meat offal (1601.0000). 83. Meat (Industrial Inputs)
and similar products of prepared frozen General Masses
or preserved meat or meat offal of all
types including poultry meat and fish.
(1602.3200,1602.3900,
168 6th 14A.7.b.xi EVA (Ethyl Vinyl Acetate) Manufacturing 7
Schedule- Sheet (Chemical). (Industrial Inputs)
Table-3 General Masses
169 6th 138 Fish Feed Manufacturing 6
Schedule- (Industrial Inputs)
Table-1 General Masses
170 6th 18. turmeric excluding those sold in retail Food Products 5
Schedule- packing bearing brand names and Manufacturing
Table-1 trademarks under respecting PCT (Industrial Inputs)
heading General Masses
171 6th 82 Frozen, prepared or preserved Food Products 5
Schedule- sausages and similar products of poultry Manufacturing
Table-1 meat or meat offal excluding those sold (Industrial Inputs)
in retail packing under a brand name or a General Masses
trademark
172 6th 14.8 exemption of Sales Tax @ 0% on 8. Manufacturing 5
Schedule- PV Modules.-PV Modules for dedicated (Industrial Inputs)
Table-3 use of renewable source of energy like General Masses
solar, wind, geothermal etc. subject to
conditions given in the preamble of
Table-3 of 6th Schedule to the Sales Tax
Act, 1990.
173 6th 14A. Junction box & Cover. Manufacturing 5
Schedule- (Industrial Inputs)
Table-3 General Masses
174 6th 89 Exercise books Manufacturing 5
Schedule- (Industrial Inputs)
Table-1 General Masses
175 6th 9.23 exemption of Sales Tax @ 0% on Manufacturing 5
Schedule- 23) Spares, accessories and reagents for (Industrial Inputs)
Table-3 scientific equipment.-Machinery, General Masses
equipment and other education and
research related items imported by
technical, training institutes, research
institutes, schools, colleges and
universities
176 6th 11. Following machinery and equipment Manufacturing 4
Schedule- for marble, granite and gem stone (Industrial Inputs)
Table-3 extraction and processing industries: sr. General Masses
# (1) to (24) under respective headings
and conditions.
177 6th Pencil sharpeners Manufacturing 4
Schedule- (Industrial Inputs)
Table-1 General Masses
178 6th 14A.7.b.viii Sheet mixture of Paper and Manufacturing 4
Schedule- plastic (Industrial Inputs)
Table-3 General Masses
179 6th 45. dextrose and saline infusion giving Health Sector 4
Schedule- sets along with empty nontoxic bags for Manufacturing
Table-1 infusion solution, dextrose and saline (Industrial Inputs)
infusion giving sets, artificial parts of the General Masses
body, intra-ocular lenses and glucose
testing equipment under respective PCT
headings
180 6th 73 Milk Food Products 4
Schedule- Manufacturing
Table-1 (Industrial Inputs)
General Masses
181 6th 15.i Following items for promotion of Manufacturing 4
Schedule- renewable energy technologies or for (Industrial Inputs)
Table-3 conservation of energy:-(i). General Masses
SMD/LED/LVD lights with or without
ballast, fittings and fixtures.
182 6th 09. Following machinery, equip. and Education Sector 4
Schedule- other education and research related General Masses
Table-3 items imported by technical, training
institutes, schools, colleges and
universities:-sr.# (1) to (23) under
respective headings.
183 6th 59. artificial kidneys, eye cornea, General Masses 3
Schedule- hemodialysis machines, hemodialyzers, Health items
Table-1 a.v. fistula needles, hemodialysis fluids
and powder, blood tubing tines for
dialysis and reverse osmosis plants for
dialysis, double lumen catheter for
dialysis, catheter for renal failure
184 6th 15 (xvi). Charge controller/Current Manufacturing 3
Schedule- controller. Provided that exemption (Industrial Inputs)
Table-3 under this serial shall be available with General Masses
effect from 01.07.2016. (xvi). Charge
controller/Current controller. Provided
that exemption under this serial shall be
available with effect
185 6th 14A.4.b.iv Charge controllers. Manufacturing 3
Schedule- (Industrial Inputs)
Table-3 General Masses
186 6th 139 Fans for Dairy Farms General Masses 3
Schedule-
Table-1
187 6th 126 Machinery, equipment and tools for Manufacturing 2
Schedule- setting up maintenance, repair and (Industrial Inputs)
Table-1 overhaul (MRO) workshop by MRO General Masses
company recognized by Aviation Division
188 6th 50. articles imported through post as Manufacturing 2
Schedule- unsolicited gifts, subject to the same (Industrial Inputs)
Table-1 conditions as are envisaged for the General Masses
purposes of applying zero-rate of
customs duty under the customs art 1969
(iv of 1969) under respective PCT
heading
189 6th 2 exemption of Sales Tax @ 0% on Manufacturing 2
Schedule- Machinery, equipment, apparatus, and (Industrial Inputs)
Table-3 medical, surgical, dental and veterinary General Masses
furniture, materials, fixture and fittings
imported by hospitals and medical or
diagnostic institutes-subject to condition
given at S.No. 2
190 6th 15.4 exemption of Sales Tax @ 0% on 4. Manufacturing 2
Schedule- Solar torches.-Items for promotion of (Industrial Inputs)
Table-3 renewable energy technologies. Subject General Masses
to conditions given in the preamble of
Table-3 of 6th Schedule to the Sales TAx
Act, 1990.
191 6th 14A.3.b.ii Cooling towers. Manufacturing 2
Schedule- (Industrial Inputs)
Table-3 General Masses
192 6th 16. red chilies excluding those sold in Manufacturing 2
Schedule- retail packing bearing brand names and (Industrial Inputs)
Table-1 trademarks under respective PCT General Masses
headings (Food Product)
193 6th 73. MILK AND CREAM...04.01 AND General Masses ( 2
Schedule- 04.02 Food Product)
Table-1
194 6th 15. (vi). Lanterns and related instruments. Manufacturing 2
Schedule- (Industrial Inputs)
Table-3 General Masses
195 6th 14A.6.c.iv Electric Heater/Immersion Manufacturing 2
Schedule- Rod (one piece with one solar water (Industrial Inputs)
Table-3 heater) General Masses
196 6th 72 Uncooked poultry Meat whether or not (Food Product) 2
Schedule- fresh, frozen or otherwise, preserved or General
Table-1 packed
197 6th 15 (viii). LED Bulb/Tube lights. Manufacturing 2
Schedule- (Industrial Inputs)
Table-3 General Masses
198 6th 53. imports of all such gifts as are Manufacturing 2
Schedule- received and such equipment for fighting (Industrial Inputs)
Table-1 tuberculosis, leprosy, aids and cancer General Masses
and such equipment and apparatus for
the rehabilitation of the deaf, the blind
crippled or mentally retarded as are
purchases or otherwise sec
199 6th 71.goods and services purchased by Manufacturing 1
Schedule- non-resident entrepreneurs and traders (Industrial Inputs)
Table-1 visiting Pakistan to participate in trade General Masses
fairs and exhibitions subject to reciprocity
and such conditions and restrictions as
may be specified by the board under
respective heading
200 6th 115 Plant, machinery and equipment Manufacturers in 1
Schedule- imported for setting up fruit processing backward areas
Table-1 and preservation units in Gilgit-Baltistan,
Makran and Malakand Divisions subject
to the same conditions and procedure as
are applicable for import of such plant,
machinery and equipment
201 6th 14A.8.viii Aluminum and silver paste. Manufacturing 1
Schedule- (Industrial Inputs)
Table-3 General Masses
202 6th 78 Desi Ghee, excluding that sold in retail General Masses ( 1
Schedule- packing under a brand name Food Product)
Table-1
203 6th 93. bicycles (87.12). 94. wheelchairs Manufacturing 1
Schedule- (8713.1000 AND 8713.9000) (Industrial Inputs)
Table-1 General Masses/
Differently-abled
Persons
204 6th 29 Table salt including iodized salt Manufacturing 1
Schedule- excluding salt sold in retail packing (Industrial Inputs)
Table-1 bearing brand names and trademarks. General Masses (
Food Product)
205 6th 84. preparations for infant use, put up for Manufacturing 1
Schedule- retail sale (1901.1000). 85. fat filled milk (Industrial Inputs)
Table-1 (1901.9090) General Masses (
Food Product)
206 6th 52-a goods supplied to hospitals run by Manufacturing 1
Schedule- the federal or provincial governments or (Industrial Inputs)
Table-1 charitable operating hospitals of fifty General Masses
beds or more respective headings
207 6th 91 Energy saver lamps. As per Note 1 of Manufacturing 1
Schedule- the 6th Schedule to the Sales Tax Act, (Industrial Inputs)
Table-1 1990, exemption shall be admissible on General Masses
the basis of description of goods as
mentioned in column (2) of the Schedule.
PCT classification of headings is
provided for ease of reference
208 6th 75 Yogurt, excluding that sold in retail Manufacturing 1
Schedule- packing under a brand name (Industrial Inputs)
Table-1 General Masses
(Food Prodiucts)
209 6th 14A.12.b.iv Pole/Tower. Manufacturing 1
Schedule- (Industrial Inputs)
Table-3 General Masses
210 6th 110. the following items with dedicated Manufacturing 1
Schedule- use of renewable sources of energy like (Industrial Inputs)
Table-1 solar and wind, subject to certification by General Masses
the alternative energy development
board (aedb), Islamabad:-(a) solar pv
panels (9405.1090), (b) lvd induction
lamps, (c)SMD, LEDS
211 6th 147 Goods supplied to German Diplomatic mission 1
Schedule- Development Agency (Deutsche
Table-1 Gesellschaft für International
Zusammenarbeit) GIZ
212 6th 74 Flavored Milk, excluding that sold in Manufacturing 1
Schedule- retail packing under a brand name (Industrial Inputs)
Table-1 General Masses
Sub Total 316,015
Less 45% adjustment on account of value addition of Local Supplies 142,207
Total 173,808
=========================================================================================================================================
EXEMPTION ON LOCAL SUPPLIES UNDER 6TH SCHEDULE
=========================================================================================================================================
Sr Legal Description Intended Estimates
Reference Exemption Beneficiaries
=========================================================================================================================================
or Concession Rs. Million
1 (Section 13) 1 Live Animals 2 [and live poultry] General Masses 15,119
6th Schedule
Table I
2 (Section 13) 1 Supply of cottonseed exclusively Agriculture Sector 828
6th Schedule meant for sowing purposes, subject
Table II to such conditions as the General Masses 828
Board may specify
3 (Section 13)
6th Schedule
Table III 1 Machinery and equipment for Manufacturing
initial installation, balancing, (Industrial Inputs)
modernization, replacement or General Masses 260
expansion of desalination plants,
coal firing system, gas processing
plants and oil and gas field
prospecting.
4 (Section 13)
6th Schedule
Table I 2 Meat of bovine animals, sheep Food Products
and goat, excluding poultry and General Masses 1,032
offal, whether or not fresh, frozen
or otherwise, preserved 2 [or
packed]
5 (Section 13) 2 Supply of locally produced crude Manufacturing
6th Schedule vegetable oil obtained from the locally produced (Industrial
Table II seeds 1 [other than cotton seed], except cooking Inputs)
oil, without having undergone any process except General Masses 1,905
the process of washing
6 (Section 13) 2 Following machinery, equipment, apparatus
6th Schedule and medical, surgical, dental and veterinary furniture,Food Products
Table III materials, fixtures and fittings imported by Manufacturing
hospitals and medical or diagnostic institutes:- (Industrial Inputs)
7 (Section 13) 3 Fish and crustaceans excluding live fish General Masses 281
6th Schedule whether or not fresh, frozen or otherwise preserved 4 Food Products
Table I [or packed] General Masses 485
8 (Section 13) Supplies made by cottage industry Manufacturing
6th Schedule (Industrial Inputs)
Table II General Masses 60
9 (Section 13) 4 Raw material and intermediary goods manufactured Manufacturing
6th Schedule or produced, and services provided or rendered, (Industrial Inputs)
Table II by a registered person, consumed in-house for the General Masses 159
manufacture of goods subject to sales tax.
10 (Section 13) 4 Coal mining machinery, equipment, spares, including Mining Sector
6th Schedule vehicles for site use i.e. single or double cabin pick-Manufacturing
Table III 1 [and dump trucks], imported for Thar Coal Field. (Industrial Inputs)
11 (Section 13) 6 Supply of fixed assets against which
input tax adjustment General Masses 5
6th Schedule is not available under a notification issued in terms of
Table II clause (b) of subsection (1) of section 8 of the Sales Tax
Act, 1990. Manufacturing (Industrial Inputs)
General Masses 236
12 (Section 13) 7 Breads prepared in tandoors and bakeries, vermicillieFood products
6th Schedule nans, chapattis, sheer mal, bun, rusk. Manufacturing
Table II (Industrial Inputs)
General Masses 4,277
13 (Section 13) 8 Foodstuff cooked or prepared in-house Food products
6th Schedule and served in messes run Manufacturing 1
Table II on the basis of mutuality and industrial canteens (Industrial Inputs)
for workers. General Masses
14 (Section 13) 8 Machinery and equipment meant for power
transmission and Manufacturing
6th Schedule grid stations including under construction projects. (Industrial Inputs)
Table III General Masses 152
15 (Section 13) 9 Foodstuff and other eatables prepared in the
flight kitchens Food products
6th Schedule and supplied for consumption on-board in local flights.Manufacturing
Table II (Industrial Inputs)
General Masses 103
16 (Section 13)
6th Schedule
Table III 9 machinery, equipment and other education
and research Education Sector
related items imported by technical, training instituteGeneral Masses 4
research institutes, schools, colleges and universities:-
17 (Section 13)
6th Schedule
Table II 10 Agricultural produce of Pakistan, not subjected to
any Agriculture Sector
further process of manufacture. General Masses 1,751
18 (Section 13)
6th Schedule
Table I 11 Eggs including eggs for hatching Poultry Sector
General Masses 1,440
19 (Section 13)
6th Schedule
Table II 11 Supply of ware potato and onions Food Sector
General Masses 17
20 (Section 13) 11 Following machinery and equipment Manufacturing
6th Schedule for marble, granite and gem stone (Industrial Inputs)
Table III extraction and processing industries: General Masses 10
21 (Section 13)
6th Schedule
Table I 12 Live plants including bulbs, 1
[roots and the like.] General Masses 316
22 (Section 13)
6th Schedule
Table I 13 Edible vegetables including roots Food Products
and tubers, 2 [except ware potato Manufacturing
and onions], whether fresh, frozen (Industrial Inputs)
or otherwise preserved (e.g. in cold General Masses 2,494
storage) but excluding those bottled
3 [or] canned 4 [***]
23 (Section 13) 13 Effluent treatment plants Manufacturing
6th Schedule (Industrial Inputs)
Table III General Masses 40
24 (Section 13) 14 Pulses. Food Products
6th Schedule General Masses 8,505
TABLE I
25 (Section 13) 14 items for use with solar Manufacturing
6th Schedule energy:-Solar Power Systems (Industrial Inputs)
Table III General Masses 1,116
26 (Section 13) 15 Edible fruits excluding Food Products
6th Schedule imported fruits (except fruits General Masses 665
Table I imported from Afghanistan)
whether fresh, frozen or
otherwise preserved but excluding
those bottled 2 [or]
canned 3 [***],
27 (Section 13) 16 Red chillies excluding those Food Products
6th Schedule sold in retail packing bearing General Masses 65
Table I brand names and trademarks.
28 (Section 13)
6th Schedule
Table II 16 Raw cotton 1 [omitted] Manufacturing
(Industrial Inputs)
General Masses 51
29 (Section 13) 17 Ginger excluding those sold Food Products
6th Schedule in retail packing bearing General Masses 1,604
Table I brand names and trademarks
30 (Section 13) 17 Raw and pickled hides and Manufacturing
6th Schedule skins, wet blue hides and skins (Industrial Inputs)
Table II General Masses 57
31 (Section 13) 17 Machinery, equipment, raw Manufacturing
6th Schedule materials, components and other (Industrial Inputs) 2
Table III capital goods for use in building,
fittings, repairing or refitting
of ships, boats or floating
structures imported by Karachi
Shipyard and Engineering
Works Limited.
32 (Section 13) 18 Turmeric excluding those sold Food Products
6th Schedule in retail packing bearing brand General Masses 50
Table I names and trademarks.
33 (Section 13) 18 Supplies made by manufacturers Manufacturing
6th Schedule of marble and granite having annual (Industrial Inputs)
Table II turnover less than five million General Masses 2
rupees even if their annual
utility bill is more than eight
hundred thousand rupees
34 (Section 13) 19 Cereals and products of milling Manufacturing
6th Schedule industry 4 [excluding the products (Industrial Inputs)
Table I of milling industry, other than wheat General Masses/
and meslin flour, as sold in retail Food items 5,469
packing bearing brand name or a
trademark].
35 (Section 13)
6th Schedule
Table II 19 Bricks Manufacturing
(Industrial Inputs)
General Masses 264
36 (Section 13) 19 Plant and machinery, except the items Manufacturing
6th Schedule listed under Chapter 87 of the Pakistan (Industrial
Table III Customs Tariff, imported for setting up Inputs/SEZs 93
of a Special Economic Zone (SEZ) by zone
developers and for installation in that
zone by zone enterprises, on one time
basis as prescribed in the SEZ Act, 2012
and rules there under subject to such
condition, limitations and restriction as
a Federal Board of Revenue may impose from
time to time.
37 (Section 13) 20 Seeds, fruit and spores of a kind used Manufacturing
6th Schedule for sowing (Industrial Inputs)
Table I General Masses 2,888
38 (Section 13) 20 Crushed stone Manufacturing
6th Schedule (Industrial Inputs)
Table II General Masses 88
39 (Section 13) 21 Cinchona bark. Manufacturing
6th Schedule (Industrial Inputs)
Table I General Masses 1,096
40 (Section 13) 21 Poultry feed, cattle feed, General Masses 28,072
6th Schedule sunflower seed meal, rape seed meal
Table-II and canola seed meal
41 (Section 13) 22 Sugar beet Food Products
6th Schedule General Masses 6
Table I
42 (Section 13) 22 Single cylinder agriculture diesel Agriculture
6th Schedule engines (compression ignition internal Sector General
Table II combustion piston engines) of 3 to 36 HP. Masses 370
43 (Section 13) 23 Match boxes Manufacturing
6th Schedule (Industrial Inputs)
Table II General Masses 1,241
44 (Section 13) 24 Edible oils and vegetable ghee, Food Products
6th Schedule including cooking oil, on which Federal General Masses 352
Table I Excise Duty is charged, levied and
collected 4 [by a registered manufacturer
or importer] as if it were a tax payable
under section 3 of the Act. 5
[Explanation.-Exemption of this entry shall
not be available 6 [on local supplies made
by importers,] distributors, wholesalers
or retailers.
45 (Section 13) 24 LED or SMD lights and bulbs meant for Manufacturing
6th Schedule conservation of energy (Industrial Inputs)
Table II General Masses 1,960
46 (Section 13) 25 Cottonseed oil Manufacturing
6th Schedule (Industrial Inputs)
Table II General Masses 558
47 (Section 13) 26 Fruit juices, whether fresh, frozen or Food Products
6th Schedule otherwise preserved but excluding those General Masses 139
Table I bottled, canned or package
48 (Section 13) Ice and waters excluding those for sale Manufacturing
6th Schedule under brand names or trademark (Industrial Inputs)
General Masses 397
49 (Section 13) 29 Table salt including iodized salt Manufacturing
6th Schedule excluding salt sold in retail packing (Industrial Inputs)
Table I bearing brand names and trademarks General Masses 203
50 (Section 13) 31 Holy Quran, complete or in parts, with General Masses 252
6th Schedule or without translation; Quranic Verses
Table I recorded on any analogue or digital media;
other Holy books
51 (Section 13) 32 [Newsprint, newspapers], journals, Manufacturing
6th Schedule periodicals, books 6 [***] but excluding (Industrial Inputs)
Table I directories. General Masses 1,540
52 (Section 13) 33 Currency notes, bank notes, shares, General Masses 2,921
6th Schedule stocks and bonds.
Table I
53 (Section 13)
6th Schedule
Table I 38 Monetary gold. General Masses 2
54 (Section 13) 45 Dextrose and saline infusion giving Health Sector
6th Schedule sets 2 [***] along with empty non-toxic Manufacturing
Table I bags for infusion solution, Dextrose and (Industrial Inputs)
saline infusion giving sets, Artificial General Masses 1,726
parts of the body, Intra-Ocular lenses and
Glucose testing equipment.
55 (Section 13) 46[Goods imported by various Manufacturing 63
6th Schedule agencies of the United Nations, (Industrial Inputs)
Table I diplomats, diplomatic missions, UN and Diplomatic
privileged persons and privileged Missions
organizations which are covered
under various Acts and, Orders,
rules and regulations made
thereunder; and agreements by
the Federal Government provided
that such goods are charged to
zero-rate of customs duty under
Customs Act, 1969 (IV of 1969)
56 (Section 13) 47 Import of articles of household Manufacturing 230
6th Schedule and personal effects including (Industrial Inputs)
Table I vehicles and also the goods for General Masses
donation to projects established
57 (Section 13) 48 Goods imported or supplied Manufacturing 612
6th Schedule under grants-in-aid for which a (Industrial Inputs)
Table I specific consent has been General Masses
obtained from the 1 [Board];
supplies and imports under
agreements signed by the
Government of Pakistan before the
30th June, 1996, provided the
agreements contained the
provision for exemption of tax at
the time of signing of agreement
58 (Section 13) 49 Import of all goods received, in General Masses 5
6th Schedule the event of a natural disaster o
Table I
59 (Section 13) 50 Articles imported through post General Masses 4
6th Schedule as unsolicited gifts, subject to the
Table I same conditions as are envisaged
for the purposes of applying zero-
rate of customs duty under the
Customs Act, 1969. (IV of 1969)
60 (Section 13) 51 Imported samples, subject to General Masses 66
6th Schedule the same conditions as are
Table I envisaged for the purposes of
applying zero-rate of customs duty
under the Customs Act, 1969. (IV
of 1969).
61 (Section 13) 52 Goods imported by or donated Health Sector 2,163
6th Schedule to hospitals run by the Federal General Masses
Table I Government or a Provincial
Government; and non-profit
62 (Section 13) 53 Import of all such gifts as are Health Sector 6
6th Schedule received, and such equipment for General Masses
Table I fighting tuberculosis, leprosy, AIDS
and cancer and such equipment
and apparatus for the rehabilitation
of the deaf, the blind, crippled or
mentally retarded as are
purchased or otherwise secured by
a charitable non-profit making
institution solely for the purpose of
advancing declared objectives of
such institution
63 (Section 13) 54 Educational, scientific and Educational Sector 2
6th Schedule cultural material imported from a General Masses
Table I country signatory to UNESCO
Agreement or a country signatory
to bilateral commodity exchange
agreement with Pakistan, subject
to the same conditions as are
envisaged for the purposes of
exemption under the Customs Act,
1969 (IV of 1969).
64 (Section 13) 55 Import of replacement goods Manufacturing 1
6th Schedule supplied free of cost in lieu of (Industrial Inputs)
Table I defective goods imported, subject General Masses
to similar conditions as are
envisaged for the purposes of
applying zero-rate of customs duty
under the Customs Act, 1969.
65 (Section 13) 57 Goods (including dry fruits Importers 35
6th Schedule imported from Afghanistan) Manufacturing
Table I temporarily imported into Pakistan, (Industrial Inputs)
meant for subsequent exportation General Masses
charged to zero-rat
66 (Section 13) 58 Import of ship stores, subject to Importers 1
6th Schedule the procedures, conditions and Manufacturing
Table I restrictions as may be specified by (Industrial Inputs)
the Collector of Customs in this General Masses
behalf including those
consignments of such stores that
have been released without
charging sales tax since the 1st
July, 1998, but excluding such
consignments of ship stores as
have been cleared on payment of
sales tax
67 (Section 13) 59 Artificial kidneys, eye cornea, Health Sector 3,275
6th Schedule hemodialysis machines, Manufacturing
Table I hemodialyzers, A.V. fistula (Industrial Inputs)
needles, hemodialysis fluids and General Masses
powder, blood tubing tines for
dialysis and reverse osmosis
plants for dialysis, double lumen
catheter for dialysis, catheter for
renal failure patient and peritoneal
dialysis solution, cochlear implants
systems
68 (Section 13) Contraceptives and accessories Health Sector 758
6th Schedule thereof. Manufacturing
Table I (Industrial Inputs)
General Masses
69 (Section 13) 61 Goods produced or Exporters 110
6th Schedule manufactured in and exported from Manufacturing
Table I Pakistan which are subsequently (Industrial Inputs)
imported in Pakistan within one General Masses
year of their exportation, provided
conditions of section 22 of the
Customs Act, 1969 (IV of 1969),
are complied with.
70 (Section 13) 63 Personal wearing apparel and General Masses 14
6th Schedule bona fide baggage imported by
Table overseas Pakistanis and tourists, if
imported under various baggage
rules and is exempt from Customs
duties
71 (Section 13) 71 Goods and services purchased Non-Residents 1
6th Schedule by non-resident entrepreneurs and
Table I in trade fairs and exhibitions
subject to reciprocity and such
conditions and restrictions as may
be specified by the Board.
72 (Section 13) 72 Uncooked poultry Meat whether Food Products 1,282
6th Schedule or not fresh, frozen or otherwise, General Masses
Table I preserved or packed
73 (Section 13) 73 Milk Food Products 17,000
6th Schedule Manufacturing
Table I (Industrial Inputs)
General Masses
74 (Section13) 74 Flavored milk, excluding that Food Products 66
6th Schedule sold in retail packing under a brand Manufacturing
Table I name (Industrial Inputs)
General Masses
75 (Section 13) 75 Yogurt, excluding that sold in Food Products 67
6th Schedule retail packing under a brand name Manufacturing
Table I (Industrial Inputs)
General Masses
76 (Section 13) 76 Whey, excluding that sold in Food Products 151
6th Schedule retail packing under a brand name Manufacturing
Table I (Industrial Inputs)
General Masses
77 (Section 13) 77 Butter, excluding that sold in Food Products 195
6th Schedule retail packing under a brand name Manufacturing
Table I (Industrial Inputs)
General Masses
78 (Section 13) 78 Desi ghee, excluding that sold Food Products 124
6th Schedule in retail packing under a brand Manufacturing
Table I name (Industrial Inputs)
General Masses
79 (Section 13) 79 Cheese, excluding that sold in Food Products 222
6th Schedule retail packing under a brand name Manufacturing
Table I
(Industrial Inputs)
General Masses
80 (Section 13) 80 Processed cheese not grated or Food Products 547
6th Schedule powdered, excluding that sold in Manufacturing
Table I retail packing under a brand name (Industrial Inputs)
General Masses
81 (Section 13) 81 Cotton seed Manufacturing 7,237
6th Schedule (Industrial Inputs)
Table I General Masses
82 (Section 13) 82 Frozen prepared or preserved Food Products 205
6th Schedule sausages and similar products of Manufacturing
Table I poultry meat or meat offal 2 [, (Industrial Inputs)
excluding those sold in retail General Masses
packing under a brand name or a
trademark]
83 (Section 13) 83 Meat and similar products of Food Products 2,144
6th Schedule prepared frozen or preserved meat Manufacturing
Table I or meat offal of all types including (Industrial Inputs)
poultry, meat and fish 3 [,excluding General Masses
those sold in retail packing under a
brand name or a trademark]
84 (Section 13) 84 preparation suitable for infants Food Products 2,701
6th Schedule Manufacturing
Table I (Industrial Inputs)
General Masses
85 (Section 13) 85 Fat filled milk excluding that Food Products 1,966
6th Schedule sold in retail packing under a brand Manufacturing
Table I name or a trademark] (Industrial Inputs)
General Masses
86 (Section 13) 86 Colors in sets (Poster colors) Manufacturing 122
6th Schedule (Industrial Inputs)
Table I General Masses
87 (Section 13) 87 Writing, drawing and making Manufacturing 54
6th Schedule inks (Industrial Inputs)
Table I General Masses
88 (Section 13) 88Erasers Manufacturing 28
6th Schedule (Industrial Inputs)
Table I General Masses
89 (Section 13) 89 Exercise books Manufacturing 60
6th Schedule (Industrial Inputs)
Table I General Masses
90 (Section 13) 90 Pencil sharpeners Manufacturing 27
6th Schedule (Industrial Inputs)
Table I General Masses
91 (Section 13) 91 Energy saver lamps Manufacturing 99
6th Schedule (Industrial Inputs)
Table I General Masses
92 (Section 13) 92Sewing machines of the Manufacturing 25
6th Schedule household type (Industrial Inputs)
Table I General Masses
93 (Section 13) 93 Bicycles Manufacturing 180
6th Schedule (Industrial Inputs)
Table I General Masses
94 (Section 13) 94 Wheelchairs Manufacturing 49
6th Schedule (Industrial Inputs)
Table I General Masses
95 (Section 13) 96 Other drawing, marking out or Manufacturing 4
6th Schedule mathematical calculating (Industrial Inputs)
Table I instruments (geometry box) General Masses
96 (Section 13) 97 Pens, ball pens, markers and Manufacturing 149
6th Schedule porous tipped pens (Industrial Inputs)
Table I General Masses
97 (Section 13) 98 Pencils including color pencils Manufacturing 322
6th Schedule (Industrial Inputs)
Table I General Masses
98 (Section 13) 99 Compost (non-commercial Manufacturing 149
6th Schedule fertilizer) produced and supplied (Industrial Inputs)
Table I locally General Masses
99 (Section 13) 100 Construction materials to 6 Manufacturing 16
6th Schedule [Gwadar] Export processing (Industrial Inputs)
Table I Zone's investors and to Export General Masses
Processing Zone 3
100 (Section 13) 101 Raw and pickled hides and Manufacturing 5
6th Schedule skins, wet blue hides and skins, (Industrial Inputs)
Table I finished leather, and General Masses
101 (Section 13) 102 Machinery, equipment and Manufacturing 27
6th Schedule materials imported either for (Industrial Inputs)
Table I exclusive use within the limits of General Masses
Export Processing Zone or for
making exports therefrom, and
goods imported for warehousing
purpose in Export Processing
Zone, subject to the conditions that
such machinery, equipment,
materials and goods are imported
by investors of Export Processing
Zones, and all the procedures,
limitations and restrictions as are
applicable on such goods under
the Customs Act, 1969 (IV of 1969)
and rules made thereunder shall
mutatis mutandis, apply.
102 (Section 13) 103 Import and supply thereof, up Manufacturing 104
6th Schedule to the year, of ships (Industrial Inputs)
Table I General Masses
103 (Section 13) 104 Substances registered as Manufacturing 91,892
6th Schedule drugs under the Drugs Act, 1976 (Industrial Inputs)
Table I (XXXI of 1976) and medicaments General Masses
as are classifiable under chapter
30 of the First Schedule to the
Customs Act, 1969 (IV of 1969)
except the following, even if
medicated or medicinal in nature, n
104 (Section 13) 105 Raw materials for the basic Health Sector 11,076
6th Schedule manufacture of pharmaceutical Manufacturing
Table I active ingredients and for (Industrial Inputs)
manufacture of pharmaceutical General Masses
products, provided that in case of
import, only such raw materials
shall be entitled to exemption
which are liable to customs duty
not exceeding 1 [eleven] per cent
ad valorem, either under the First
Schedule 2 [or Fifth Schedule] to
the Customs Act, 1969 (IV of 1969)
or under a notification issued under
section 19 thereof.
105 (Section 13) 106 Import of Halal edible offal of General Masses 90
6th Schedule bovine animals
Table I
106 (Section 13) 107 Import and supply of iodized General Masses 268
6th Schedule salt bearing brand names and
Table I trademarks whether or not sold in
retail packing.
107 (Section 13) 108 Components or sub- Manufacturing 7
6th Schedule components of energy saver (Industrial Inputs)
Table I lamps, namely:-(a) Electronic General Masses
Circuit (b) Plastic Caps (upper and
lower) (c) Base Caps B22 and E27
(d) Tungsten Filaments (e) Lead-
in-wire (f) Fluorescent powder (Tri
Band Phospher) (g) Adhesive
Additive (h) Al-oxide Suspension
(i) Capping Cement (j) Stamp Pad
108 (Section 13) 110 The following items with Manufacturing 1,762
6th Schedule dedicated use of renewable source (Industrial Inputs)
Table I of energy like solar and wind, General Masses
subject to certification by the Alternative Energy
Alternative Energy Development Development
Board (AEDB), Islamabad 1 [for
the period ending on the 30th
June, 2023]:-(a) Solar PV panels;
(b) LVD induction lamps; (c) SMD,
LEDs, with or without ballast, with
fittings and fixtures; (d) Wind
turbines including alternators and
mast; (e) Solar Tor
109 (Section 13) 112 Following cardiology/cardiac Health Sector 1,620
6th Schedule surgery, neurovascular, Manufacturing
Table I electrophysiology, endo-surgery, (Industrial Inputs)
General Masses
110 (Section 13) 113 High Efficiency Irrigation Agriculture Sector 209
6th Schedule Equipment (If used for agriculture Manufacturing
Table I sector) (1) Submersible pumps (up (Industrial Inputs
to 75 lbs and head 150 meters) (2) General Masses
Sprinklers including high and low
pressure (center pivotal) system,
conventional sprinkler equipment,
water reel travelling sprinkler, drip
or trickle irrigation equipment, mint
irrigation sprinkler system (3) Air
release valves, pressures gauges,
water meters, back flow
preventers, and automatic
controllers
111 (Section 13) 114 Green House Framing and Manufacturing 296
6th Schedule Other Green House Equipment (If (Industrial Inputs)
Table I used for Agriculture Sector) (1) General Masses
Tunnel farming
112 (Section 13) 115 Plant, machinery and Manufacturers of 2
6th Schedule equipment imported for setting up backward areas
Table I fruit processing and preservation (Industrial Inputs)
units in Gilgit-Baltistan, General Masses
Balochistan Province and
Malakand Division up to the 30th
June, 2019 subject to the same
conditions and procedure as are
applicable for import of such plant,
machinery and equipment under
the Customs Act, 1969 (IV of 1969)
113 (Section 13) 116 Plant, machinery and Manufacturer in 1
6th Schedule equipment imported for setting up FATA
Table I industries in FATA up to 30th June Manufacturing
2019 subject to the same (Industrial Inputs)
conditions and procedure as are General Masses
applicable for import of such plant,
machinery and equipment under
the Customs Act, 1969 (IV of 1969)
114 (Section 13) 117 Appliances and items required Manufacturing 2
6th Schedule for ostomy procedures as specified (Industrial Inputs)
Table I in the Chapter 99 of the First General Masses
Schedule to the Customs Act,
1969, subject to same conditions
as specified therein]
115 (Section 13) 120 Diagnostic kits or equipment, Health Sector 4,165
6th Schedule namely:-HIV Kits 4C Es Trionyx Manufacturing
Table I 5C Cell control normal Bovine (Industrial Inputs)
precision multi sera Pregnancy test General Masses
DNA SSP DRB Generic IC
Reticulocyte count (control) retic C
Control Kit for vitamin B12
estimation Ferritin kit HEV
(Hepatitis E virus) ID-DA Cell Urine
Analysis Strips Albumin beg
Cratinin
116 (Section 13) 121 Blood Bag CPDA-1 with blood Manufacturing 253
6th Schedule transfusion set pack in aluminum (Industrial Inputs)
Table I foil with set General Masses
117 (Section 13) 122 Urine drainage bags Manufacturing 24
6th Schedule (Industrial Inputs)
Table I General Masses
118 (Section 13) 123 Aircraft, whether imported or Health Sector 2
6th Schedule acquired on wet or dry lease 1 [:] Manufacturing
Table I Provided that in case of import or (Industrial Inputs)
acquisition on wet or dry lease by
Pakistan International Airlines
Corporation, this exemption shall
be available with effect from 19th
March, 2015.
119 (Section 13) 125 Spare parts for use in aircrafts, Manufacturing 5
6th Schedule trainer aircrafts or simulators (Industrial Inputs)
Table I
120 (Section 13) 126 Machinery, equipment and Manufacturing 2
6th Schedule tools for setting up maintenance, (Industrial Inputs)
Table I repair and overhaul (MRO)
workshop by MRO company
recognized by Aviation Division
121 (Section 13) 127 Operational tools, machinery, Manufacturing 26
6th Schedule equipment and furniture and (Industrial Inputs)
Table I fixtures on one-time basis for General Masses
setting up Greenfield airports by a
company authorized by Aviation
Division.
122 (Section 13) 128 Aviation simulators imported Manufacturing 76
6th Schedule by airline company recognized by (Industrial Inputs)
Table I Aviation Division
123 (Section 13) 129 Import of plant, machinery and Manufacturing 28
6th Schedule (Industrial Inputs)
Table I General Masses
124 (Section 13) 130 Sodium Iron (Na Fe EDTA), Manufacturing 95
6th Schedule and other premixes of vitamins, (Industrial Inputs)
Table I minerals and micro-nutrients (food General Masses
grade) and subject to conditions
imposed for importation under the
Customs Act, 1969]
125 (Section 13) 131 Laptop computers, notebooks Industrial Inputs) 2,154
6th Schedule whether or not incorporating General Masses
Table I multimedia kit
126 (Section 13) 132 Personal computers General Masses 1,116
6th Schedule
Table I
127 (Section 13) 133 Pesticides and their active Agriculture Sector 18,108
6th Schedule ingredients registered by the Manufacturing
Table I Department of Plant Protection (Industrial Inputs)
under the Agricultural Pesticides General Masses
Ordinance, 1971 (II of 1971),
stabilizers, emulsifiers and
solvents
128 (Section 13) 135 Sunflower and canola hybrid Manufacturing 11
6th Schedule (Industrial Inputs)
Table I General Masses
129 (Section 13) 136 Combined harvesters up to Manufacturing 15
6th Schedule five years old (Industrial Inputs)
Table I General Masses
130 (Section 13) 138Fish Feed Manufacturing 47
6th Schedule (Industrial Inputs)
Table I General Masses
131 (Section 13) 139 Fans for dairy farms Manufacturing 1
6th Schedule (Industrial Inputs)
Table I General Masses
132 (Section 13) 140 Bovine semen Manufacturing 51
6th Schedule (Industrial Inputs)
Table I General Masses
Manufacturing 1,232
133 (Section 13) 141 Preparations for making
6th Schedule animal feed (Industrial Inputs)
General Masses
Table I Manufacturing 3
134 (Section 13) 142 Promotional and advertising
General Masses
6th Schedule material including technical (Industrial Inputs)
Table I literature, pamphlets, brochures
and other giveaways of no
commercial value, distributed free
Mass transit 1
of cost by the exhibitors
135 (Section 13) 146 Equipment imported by M/s
6th Schedule China Railway Corporation to Schemes
Table I furnished and installed in Orange General Masses 10
Line Metro Lahore
136 (Section 13) Goods supplied to German
6th Schedule Development Agency (Deutsche
6
Table I Gesellschaft für Internationale
Zusammenarbeit) GIZ
137 (Section 13) 148 Imported construction Roads and
6th Schedule materials and goods imported by Highways
Table I M/s China State Construction
Engineering Corporation Limited
(M/s CSCECL), whether or not
locally manufactured, for
construction of Karachi-Peshawar
Motorway (Sukkur-Multan Section)
subject to fulfilment of same
conditions, limitations and
restrictions as are specified under
S. No. 145 of this table, provided
that total incidence of exemptions
of all duties and taxes in respect of
construction materials and goods
imported for the project shall not
exceed ten thousand eight
hundred ninety-eight million
rupees including the benefit of
exemption from duties and taxes
availed before 30th June, 2018
under the provisions of the Sales
Tax Act, 1990, the Customs Act,
1969, the Federal Excise Act, 2005
and the Inco
138 (13) Section 150 Plant and machinery excluding Manufacturing 128
6th Schedule consumer durable goods and (Industrial Inputs)
Table I office equipment as imported by General Masses
greenfield industries, intending to
manufacture taxable goods, during
their construction and installation
period subject to conditions noted
below and issuance of exemption
certificate by the Commissioner
Inland Revenue having
jurisdiction: Conditions: (a) the
importer is registered under the Act
on or after the first day of July,
2019; and (b) the industry is not
established by splitting up or
reconstruction or reconstitution of
an undertaking already in
existence or by transfer of
machinery or plant from another
industrial undertaking in Pakistan
139 (13) Section 152 Supplies of electricity, as General Masses/ 4,238
6th Schedule made from the day of assent to the FATA
Table I Constitution (Twenty-fifth
Amendment) Act, 2018, till 30th
June, 2023, to all residential and
commercial consumers in tribal
areas, and to such industries in the
tribal areas which were set and
started their industrial production
before 31st May, 2018, but
excluding steel and ghee or
cooking oil industries
140 (13) Section 153Steel billets, ingots, ship Steel Sector 29
6th Schedule plates, bars and other long re- Manufacturing
Table I rolled profiles, on such imports and (Industrial Inputs)
supplies by the manufacturer on General Masses
which federal excise duty is
payable in sales tax mode
141 (13) Section 100AMaterials and equipment 2 Exporters 19
6th Schedule [ (plant, machinery, equipment,
Table I appliances and accessories)] for
construction and operation of 3
[Gwadar] Port and development of
Free Zone for 3 [Gwadar] Port as
imported by or supplied to China
Overseas Ports Holding Company
Limited (COPHCL) and its
operating companies namely (i)
China Overseas Ports Holding
Company Pakistan (Private)
Limited (ii) Gwadar International
Terminal Limited, (iii) Gwadar
Marin Services Limited and (iv)
Gwadar Free Zone Company
Limited, their contractors and sub-
contractors; and Ship Bunker Oils
bought and sold to the ships calling
on/visiting 3 [Gwadar] Port, 3 [by
the aforesaid operating
companies] having Concession
Agreement with the Gwadar Port
Authority, for a period of forty year,
subject to the following conditions
and procedure,
142 (13) Section 100A ((i)) This exemption shall be Construction/ 5
6th Schedule admissible only to China Overseas Highways
Table I Ports Holding Company Limited
(COPHCL) and its operating
companies, their contractors and
subcontractors which hold the
Concession Agreement;
143 (13) Section 100A ((ii)) Ministry of Ports and Manufacturing 11
6th Schedule Shipping shall certify in the (Industrial Inputs)
Table I prescribed manner and format as Ports and Shipping
per Annex-I that the imported
materials and equipment are
bonafide requirement for
construction and operation of 1
[Gwadar] Port and development of
Free Zone for 1 [Gwadar] Port. The
authorized officer of that Ministry
shall furnish all relevant
information online to Pakistan
Customs against a specific user ID
and password obtained under
section 155D of the Customs Act,
1969 (IV of 1969). In already
computerized Collectorate or
Customs
station, where the computerized
system is
not operational, the Project
Director or any
other person authorized by the
Collector in this behalf shall enter
the requisite information in the
Customs Computerized System on
daily basis, whereas entry of the
data obtained from the customs
stations which have not yet been
computerized shall be made on
weekly basis, provided that this
condition shall not apply
to ship bunker oils; and
144 (Section 13) 104 (a) filled infusion solution bags Health Sector 318
6th Schedule imported with or without infusion Manufacturing
Table I given sets; (Industrial Inputs)
General Masses
145 (Section 13) 108 (a) Electronic Circuit Manufacturing 1
6th Schedule (Industrial Inputs)
Table I General Masses
146 (Section 13) 108 (b) Plastic Caps (upper and Manufacturing 3
6th Schedule lower) (Industrial Inputs)
Table I General Masses
147 (Section13) 108 (i) Capping Cement Manufacturing 1
6th Schedule (Industrial Inputs)
General Masses
Table I
Manufacturing 379
148 (Section13) 110 (a)Solar PV panels;
6th Schedule (Industrial Inputs) General Masses
Table I Manufacturing 3
149 (Section13) 110© SMD, LEDs, with or without
General Masses
6th Schedule ballast, wi(Industrial Inputs)
Manufacturing 284
Table I
150 (Section13) 110 (g) PV modules along with General Masses
6th Schedule related comincluding (Industrial Inputs)
Table I invertors, charge controllers and Manufacturing 4
batteries.
General Masses
151 (Section13) 110 (j) Invertors (off-grid/on grid/
6th Schedule hybrid) witfor direct (Industrial Inputs)
Table I connection/input from renewable
Manufacturing 1
energy source and with Maximum
Power Point Tracking (MPPT). General Masses
152 (Section13) 112A (vi) Inflation Devices/Priority
6th Schedule Packs (Industrial Inputs)
Table I
153 (Section 13) 112A (xxv) Intracardiac Health Sector 2
6th Schedule Echocardiography Machine & Manufacturing
Table I Catheters] (Industrial Inputs)
General Masses
154 (Section 13) 112J (ii) Cannulas Health Sector 1
6th Schedule Manufacturing
Table I (Industrial Inputs)
General Masses
155 (Section 13) 112K (i) Cardiac Angiography Health Sector 16
6th Schedule Machine Manufacturing
Table I (Industrial Inputs)
General Masses
156 (Section 13) 112K (ii) Echocardiography Health Sector 1
6th Schedule Machines Manufacturing
Table I (Industrial Inputs)
General Masses
157 (Section 13) 113 (i) Submersible pumps (up to Manufacturing 14
6th Schedule 75 lbs and head 150 meters) (Industrial Inputs)
Table I General Masses
158 (Section 13) 114 (i) Tunnel farming equipment 1 Manufacturing 46
6th Schedule [consisting (Industrial Inputs)
Table I of plastic covering and General Masses
mulch film, anti-insect
net and shade net]
159 (Section 13) 114 (ii) Greenhouses Manufacturing 6
6th Schedule (prefabricated) (Industrial Inputs)
Table I General Masses
160 (Section 13) 14 (1) Off grid/On-grid solar power Manufacturing 44
6th Schedule system (with or without provision (Industrial Inputs)
Table III for USB/charging port) comprising General Masses
of :
161 (Section 13) 14 (1) (i) PV Module. Manufacturing 114
6th Schedule (Industrial Inputs)
Table III General Masses
162 (Section 13) 14 (1) (iii) Batteries for specific Manufacturing 2
6th Schedule utilization with the system (not (Industrial Inputs)
Table III exceeding 50 Ah in case of General Masses
portable system).
163 (Section 13) 14 (1) (v) Inverters (off-grid/on-grid/ Manufacturing 5
6th Schedule hybrid with provision for direct (Industrial Inputs)
Table I connection/input renewable General Masses
energy source and with Maximum
Power Point Tracking (MPPT)
164 (Section 13) 143 (i) Hearing aids (all types and Manufacturing 2
6th Schedule kinds) (Industrial Inputs)
General Masses/
Table I Differently-abled
persons 1
165 (Section 13) 143 (i) (a) Audiometers Manufacturing
6th Schedule (Industrial Inputs) General Masses 233
Table I
166 (Section 13) 14A systems and items for Manufacturing
6th Schedule dedicated use with renewable (Industrial
Inputs)
Table III source of energy like solar, wind, General Masses
geothermal 1 [as imported on or 1
before the 30th June, 2023.]
167 (Section 13) 14A (10) Solar chargers for Manufacturing
6th Schedule charging electronic devices (Industrial Inputs) 1
Table III General Masses
168 (Section 13) 14A (4a) Solar Desalination Manufacturing
1
6th Schedule System (Industrial Inputs)
Table III General Masses
169 (Section 13) 14A (4b) (i) Solar photo voltaic Manufacturing
6th Schedule panels. (Industrial Inputs)
Table III General Masses
170 (Section 13) 14A (4b) (iv) Charge controllers. Manufacturing 8
6th Schedule (Industrial Inputs)
Table III General Masses
171 (Section 13) 14A (4b) (v) Inverters (off grid/on Manufacturing 1
6th Schedule grid/hybrid) with provision for (Industrial Inputs)
Table III direct connection/input from General Masses
renewable energy source and with
Maximum Power Point Tracking
(MPPT)
172 (Section 13) 14A (7a) PV Modules. Manufacturing 85
6th Schedule (Industrial Inputs)
Table III General Masses
173 (Section 13) 14A (7b) Parts for PV Modules Manufacturing 8
6th Schedule (Industrial Inputs)
Table I General Masses
174 (Section 13) 14A (7b) (i) Solar cells. Manufacturing 10
6th Schedule (Industrial Inputs)
Table III General Masses
175 (Section 13) 14A (8) Solar Cell Manufacturing Manufacturing 2
6th Schedule Equipment. (Industrial Inputs)
Table III General Masses
176 (Section 13) 15 (a) Sprinkler Equipment Manufacturing 4
6th Schedule (Industrial Inputs)
Table II General Masses/
Agriculture Sector
177 (Section 13) 15 (b) Drip Equipment Manufacturing 13
6th Schedule (Industrial Inputs)
Table II General Masses
178 (Section 13) 15 (i) SMD/LED/LVD lights with or Manufacturing 84
6th Schedule without ballast, fittings and fixtures. (Industrial Inputs)
Table III General Masses
179 (Section 13) 15 (ii) SMD/LED/LVD lights, with or Manufacturing 6
6th Schedule without ballast, PV module, fitting (Industrial Inputs)
Table III and fixtures General Masses
180 (Section 13) 15 (iii) Tubular Day lighting Device. Manufacturing 7
6th Schedule (Industrial Inputs)
Table III General Masses
181 (Section 13) 15 (ix) PV module, with or without, Manufacturing 234
6th Schedule the related components including (Industrial Inputs)
Table III invertors (off-grid/on grid/hybrid) General Masses
with provision for direct
connection/input from renewable
energy source and with Maximum
Power Point Tracking (MPPT),
charge controllers and solar
batteries
182 (Section 13) 15 (v) Solar torches. Manufacturing 3
6th Schedule (Industrial Inputs)
Table III General Masses
68
183 (Section 13) 15 (viii) LED Bulb/Tube lights. Manufacturing
6th Schedule (Industrial Inputs)
Table I General Masses 6
184 (Section 13) 15 (x) Light emitting diodes (light Manufacturing
6th Schedule (Industrial Inputs)
emitting in different coGeneral Masses 19
Table I
Manufacturing
185 (Section 13) 15 (xi) Water pumps operating on
6th Schedule solar energy along with solar pump (Industrial Inputs)
General Masses 8
Table I controllers Manufacturing
186 (Section 13) 15 (xv) Invertors (off-grid/on
General Masses
6th Schedule grid/hybrid) with provision for direct (Industrial Inputs)
Table III connection/input from renewable
28
energy source and with Maximum
Importers
Power Point Tracking (MPPT).
187 (Section 13) 150 (a) the importer is registered (Industrial Inputs)
6th Schedule under the Act on or after the first Manufacturing General Masses
Table I day of July, 2019;
188 (Section 13) 151 (a) Supplies; and Manufacturing 1,233
6th Schedule (Industrial Inputs)
Table I General Masses
189 (Section 13) 151 (b) imports of plant, machinery, FATA General 34
6th Schedule equipment for installation in tribal Masses
Table I areas and of industrial inputs by
the industries located in the tribal
areas, as defined in the
Constitution of Islamic
Republic of Pakistan, as made till
30th June, 2023, to which the
provisions of the Act or the
notifications issued thereunder,
would have not applied had Article
247 of the Constitution not been
omitted under the Constitution
(Twenty-fifth Amendment) Act,
2018 (XXXVII of 2018):
190 (Section 13) 15A (i) Housing/shell. Shell cover Manufacturing 6
6th Schedule and base cap for all kinds of LED (Industrial Inputs)
Table III lights and bulbs General Masses
191 (Section 13) 15A (ii) Bare and stuffed Metal Clad Manufacturing 5
6th Schedule Printed Circuit Boards (MCPCB) (Industrial Inputs)
Table III for LED General Masses
192 (Section 13) 15A (iii) Constant Current Power Manufacturing 10
6th Schedule Supply for of LED Lights and Bulbs (Industrial Inputs)
Table III General Masses
193 (Section 13) 18 (iii) Microprocessor/Controllers Manufacturing 3
6th Schedule (Industrial Inputs)
Table III General Masses
194 (Section 13) 18 (xii) LCD/LED Screen Manufacturing 1
6th Schedule (Industrial Inputs)
Table III General Masses
195 (Section 13) 29C Glass bangles Manufacturing 1
6th Schedule (Industrial Inputs)
Table I General Masses
196 (Section 13) 2A Medical Equipment. Manufacturing 8
6th Schedule (Industrial Inputs)
Table III General Masses
197 (Section 13) 2A (ii) Medical surgical dental or Manufacturing 10
6th Schedule veterinary furniture (Industrial Inputs)
Table III General Masses
198 (Section 13) 2A (iii) Operating Table. Manufacturing 1
6th Schedule (Industrial Inputs)
Table III General Masses
199 (Section 13) 2A (vii) Cooling Cabinet. Manufacturing 1
6th Schedule (Industrial Inputs)
Table III General Masses
200 (Section 13) 2A (viii) Refrigerated Liquid Bath. Manufacturing 2
6th Schedule (Industrial Inputs)
Table III General Masses
201 (Section 13) 2B Cardiology/Cardiac Surgery Health Sector 20
6th Schedule Equipment Manufacturing
Table III (Industrial Inputs)
General Masses
202 (Section 13) 2B (iii) Intravenous cannula i.v. Health Sector 12
6th Schedule catheter. Manufacturing
Table III (Industrial Inputs)
General Masses
203 (Section 13) 2C DisposabHealth Sector 14
6th Schedule Manufacturing
Table III (Industrial Inputs)
General Masses
204 (Section 13) 2D (ii) Fixtures & fittings for Manufacturing 2
6th Schedule hospitals (Industrial Inputs)
Table III General Masses
205 (Section 13) 3 (i) Machinery, equipment, Manufacturing 7
6th Schedule materials, capital goods, (Industrial Inputs)
Table III specialized vehicles (4x4 non- General Masses
luxury) i.e. single or double cabin
pickups, accessories, spares,
chemicals and consumables
meant for mine construction phase
or extraction phase.
206 (Section 13) 3 (ii) Construction machinery, Manufacturing 28
6th Schedule equipment and specialized (Industrial Inputs)
Table III vehicles, excluding passenger General Masses
vehicles, imported on temporary
basis as required for mine
construction or extraction phase
207 (Section 13) 52A Goods 2 [excluding electricity Manufacturing 4,311
6th Schedule and natural gas] supplied to (Industrial Inputs)
Table I hospitals run by the Federal or General Masses
Provincial Governments or
charitable operating hospitals of
fifty beds or more or the teaching
hospitals of statutory universities of
two hundred or more beds.
208 (Section 13) 7 (i) Machinery, equipment and Manufacturing 134
6th Schedule spares meant for initial installation, (Industrial Inputs)
Table III balancing, modernization, General Masses
replacement or expansion of
projects for power generation
through nuclear and renewable
energy sources like solar, wind,
micro-hydel bio-energy, ocean,
and waste-to-energy and hydrogen
cell. 1 [This exemption in relation to
renewable energy shall remain in
force up to the 30th June, 2023.]
209 (Section 13) 7 (ii) Construction machinery, Construction Sector 2
6th Schedule equipment and specialized Manufacturing
Table I vehicles, excluding passenger (Industrial Inputs)
vehicles, imported on temporary General Masses
basis as required for the
construction of project.
210 (Section 13) 73A Milk and cream, concentrated Food Products 1,404
6th Schedule or containing added sugar or other General Masses
Table I sweetening matter, excluding that
sold in retail packing under a brand
name
211 (Section 13) 8 (i) Machinery and equipment Manufacturing 35
6th Schedule meant for power transmission and (Industrial Inputs)
Table III grid stations including under General Masses
construction projects.
212 (Section 13) 8 (i) (b) apparatus, appliances, Manufacturing 11
6th Schedule metering and testing apparatus, (Industrial Inputs)
Table III mechanical and electrical control, General Masses
transmission gear and
transmission tower, power
transmission and distribution
cables and conductors, insulators,
damper spacer and hardware and
parts thereof adapted to be used in
conjunction with the machinery
and equipment as specified in
clause (a) above; and
213 (Section 13) 9 (xxii) Parts and accessories of Manufacturing 26
6th Schedule automatic regulating or controlling (Industrial Inputs)
Table III instruments and apparatus General Masses
Sub Total 283,880
Less 45% adjustment on account of value127,746
Total 156,134
=========================================================================================================================================
Exemption Under 8th Scheduled at Reduced Rates
============================================================================================================================================
Reduced Rate of 1%
============================================================================================================================================
Sr Legal Description Intended Estimate Rates
Reference Exemption or Concession Beneficiary Rs. Million
1 Clause (aa) 62 Gold, in unworked Manufacturing 7 1
of sub-Section condition (Industrial Inputs)
2 of Section 3 General Masses
2 Clause (aa) 63 Articles of jewelry, or Manufacturing 324 1
of sub-Section parts thereof, of precious (Industrial Inputs)
2 of Section 3 metal or of metal clad with General Masses
precious metal.
Sub Total 330
============================================================================================================================================
Reduced Rate of 2%
============================================================================================================================================
Legal Description Intended Estimate
Sr Rates
Reference Exemption or Concession Beneficiary Rs. Million
3 Clause (aa) 52 Fertilizers (all types) Manufacturing 73,968 2
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
4 Clause (aa) 52 Fertilizers (All types) 16,320 2
of sub-Section
2 of Section 3
============================================================================================================================================
Sub Total 90,288
Reduced Rate of 5%
Legal Description Intended Estimate
Sr Rates
Reference Exemption or Concession Beneficiary Rs.Million
5 Clause (aa) 29 (xvii) Harvesting Agriculture 281 5
of sub-Section threshing and storage Sector
2 of Section 3 equipment: Combined
harvesters
6 Clause (aa) 23 second hand and worn General Masses 4,072 5
of sub-Section clothing or footwear
2 of Section 3
7 Clause (aa) 17 Re-importation of Exporters 156 5
of sub-Section foreign origin goods which
2 of Section 3 were temporarily exported
out of Pakistan subject to
similar conditions as are
envisaged for the
purposes of customs duty
under the Customs
Act,1969, and taxable
value shall be the value
determined under PCT h
8 Clause (aa) 26 (xii)Ditcher Manufacturing 1 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
9 Clause (aa) 28 (iv)Boom or field Manufacturing 2 5
of sub-Section sprayers (Industrial Inputs)
2 of Section 3 General Masses
10 Clause (aa) 26 (xix)Land leveler Manufacturing 39 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
11 Clause (aa) 26 (vii)Border disc Manufacturing 7 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
12 Clause (aa) 27 (ii) Seeding or planting Agriculture Sector 1 5
of sub-Section equipment: Cotton or
2 of Section 3 maize planter with fertilizer
attachment
13 Clause (aa) 27 (vii) Seeding or planting Agriculture Sector 1 5
of sub-Section equipment: Sugarcane
2 of Section 3 planter
14 Clause (aa) 29 (iii)Maize or ground nut Manufacturing 3 5
of sub-Section thresher or Sheller (Industrial Inputs)
2 of Section 3 General Masses
15 Clause (aa) 28 (v)Self-propelled Manufacturing 3 5
of sub-Section sprayers (Industrial Inputs)
2 of Section 3 General Masses
16 Clause (aa) 26 (xx) Laser land leveler General Masses 14 5
of sub-Section comprising of laser
2 of Section 3 transmitter, laser receiver,
control box, rigid mast
pack, with or without
scrapper under respective
heading
17 Clause (aa) 30 (ii) Postharvest handling General Masses 6 5
of sub-Section and processing &
2 of Section 3 miscellaneous machinery:
Fodder and feed cube
maker equipment
18 Clause (aa) 29 (x) Harvesting threshing Agriculture 33 5
of sub-Section and storage equipment: Sector
2 of Section 3 Wheat or rice reaper
19 Clause (aa) 8 (Chapter 84 and 85) If Food Products 9 5
of sub-Section imported by registered General Masses
2 of Section 3 manufacturer who is
member of Pakistan Dairy
Association 1. Milk chillers.
2. Tubular heat exchanger
(for pasteurization). 3. Milk
processing plant, milk
spray drying plant, Milk
UHT plant. 4. Milk filters 5.
20 Clause (aa) 27 (vi) Seeding or planting Agriculture 8 5
of sub-Section equipment: Canola or Sector
2 of Section 3 sunflower drill
21 Clause (aa) 67LNG imported for Manufacturing 2,092 5
of sub-Section servicing CNG sector and (Industrial Inputs)
2 of Section 3 local supplies thereof General Masses
23 Clause (aa) 29 (vii)Sunflower thresher Manufacturing 3 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
24 Clause (aa) 26 (xvii)K.R.Karundi Manufacturing 3 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
25 Clause (aa) 30 (ii)Fodder and feed cube Manufacturing 2 5
of sub-Section maker equipment (Industrial Inputs)
2 of Section 3 General Masses
26 Clause (aa) 29 (xiii)Post hole digger Manufacturing 1 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
27 Clause (aa) 29 (v)Groundnut digger Manufacturing 1 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
22 Clause (aa) 29 (v) Harvesting threshing Agriculture 1 5
of sub-Section and storage equipment: Sector
2 of Section 3 Potato digger or harvester
28 Clause (aa) 44 Sales tax @ 5% of Manufacturing 5,465 5
of sub-Section Phosphoric Acid (Industrial Inputs)
2 of Section 3 General Masses
29 Clause (aa) 9Capital goods otherwise Manufacturing 3,659 5
of sub-Section not exempted, for (Industrial Inputs)
2 of Section 3 Transmission Line General Masses
Projects.
30 Clause (aa) Natural gas Manufacturing 2,796 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
31 Clause (aa) 29 (ix) Harvesting threshing Agriculture 8 5
of sub-Section and storage equipment: Sector
2 of Section 3 Fodder rake
32 Clause (aa) 4 Oil Seeds meant for Agriculture 14 5
of sub-Section sowing subject to Sector
2 of Section 3 conditions against S.No. 4
of Table-I of 8th Schedule
to the Sales Tax Act, 1990.
33 Clause (aa) 25 Agricultural tractors Manufacturing 4,285 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
34 Clause (aa) 30 (i) Postharvest handling Agriculture 17 5
of sub-Section and processing & Sector
2 of Section 3 miscellaneous machinery:
Vegetables and fruits
cleaning and sorting or
grading equipment
35 Clause (aa) 28 (i) Irrigation drainage Agriculture 4 5
of sub-Section and agrochemical Sector
2 of Section 3 application equipment:
Tube wells filters or
strainers
36 Clause (aa) 2 Cool chain machinery Mining Sector 111 5
of sub-Section and equipment.-subject to
2 of Section 3 conditions. Subject to
conditions given in
preamble of Table-2 of 8th
Schedule to the Sales Tax
Act, 1990.
37 Clause (aa) 27 (v) Seeding or planting Agriculture 21 5
of sub-Section equipment: Rice Sector
2 of Section 3 transplanting
38 Clause (aa) 25 Agricultural Tractors HS Agriculture 412 5
of sub-Section code 8701.9220 & Sector
2 of Section 3 8701.9320 are added in the
system in pursuance of
letter C>No. 4/24-
STB/2017 dated
21.07.2017
39 Clause (aa) 30 (i)Vegetables and fruits Manufacturing 14 5
of sub-Section cleaning and sorting or (Industrial Inputs)
2 of Section 3 grading equipment General Masses
40 Clause (aa) 29 (viii) Harvesting Agriculture 21 5
of sub-Section threshing and storage Sector
2 of Section 3 equipment: Straw balers
41 Clause (aa) 26 (ix) Disc harrow Agriculture 2 5
of sub-Section Sector
2 of Section 3
42 Clause (aa) 26 (xiv) Rotary tiller Agriculture 54 5
of sub-Section Sector
2 of Section 3
43 Clause (aa) 28 (i)Tube wells filters or Manufacturing 5 5
of sub-Section strainers (Industrial Inputs)
2 of Section 3 General Masses
44 Clause (aa) 26 (xvi)Soil-scrapper Manufacturing 5 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
45 Clause (aa) 29 (xi) Harvesting threshing Agriculture 42 5
of sub-Section and storage equipment: Sector
2 of Section 3 Chaff or fodder cutter
46 Clause (aa) 4.1 Machinery, equipment, General Masses 3 5
of sub-Section materials, capital goods,
2 of Section 3 specialized vehicles (4x4
non luxury) i.e single or
double cabin pickups,
accessories, spares,
chemicals and
consumables meant for
mineral exploration phase.-
subject to conditions given
against S.No. 4 of
47 Clause (aa) 29 (xviii)Tractor mounted Manufacturing 26 5
of sub-Section trancher (Industrial Inputs)
2 of Section 3 General Masses
48 Clause (aa) 29 (xvii)Reaping machines Manufacturing 95 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
49 Clause (aa) 29 (xii)Chaff or fodder cutter Manufacturing 6 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
50 Clause (aa) 28 (ii) Irrigation drainage Agriculture 108 5
of sub-Section and agrochemical Sector
2 of Section 3 application equipment:
Knapsack sprayers
51 Clause (aa) 28 (vi) Irrigation drainage Agriculture 11 5
of sub-Section and agrochemical Sector
2 of Section 3 application equipment:
Orchard sprayer
52 Clause (aa) 27 (vii)Sugarcane planter Manufacturing 10 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
53 Clause (aa) 28 (v) Irrigation drainage Agriculture 2 5
of sub-Section and agrochemical Sector
2 of Section 3 application equipment:
Self-propelled sprayers
54 Clause (aa) 20 Plant. Machinery and General Masses 174 5
of sub-Section equipment used in
2 of Section 3 production of bio-diesel
subject to conditions
mentioned against S.no. 20
of Table I of 8th Schedule
to the Sales Tax Act, 1990
55 Clause (aa) 4 Oilseeds meant for Manufacturing 9 5
of sub-Section sowing. (Industrial Inputs)
2 of Section 3 General Masses
56 Clause (aa) 2 Cool chain machinery Manufacturing 29 5
of sub-Section and equipment. (Industrial Inputs)
2 of Section 3 General Masses
57 Clause (aa) 26 (x)Bar harrow Manufacturing 1 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
58 Clause (aa) 29 (ix)Straw balers Manufacturing 3 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
59 Clause (aa) 26 Incinerators of disposal Manufacturing 4 5
of sub-Section of waste management, (Industrial Inputs)
2 of Section 3 motorized sweepers and General Masses
snow ploughs
60 Clause (aa) 28 (iv) Irrigation drainage Agriculture 2 5
of sub-Section and agrochemical Sector
2 of Section 3 application equipment:
Boom or field sprayers
61 Clause (aa) 29 (ii)Wheat thresher Manufacturing 10 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
62 Clause (aa) 29 (i)Harvesting, threshing Manufacturing 59 5
of sub-Section and storage equipment (Industrial Inputs)
2 of Section 3 General Masses
63 Clause (aa) 20 Plant, machinery, 2 [and Manufacturing 8 5
of sub-Section equipment] used in (Industrial Inputs)
2 of Section 3 production of biodiesel General Masses
64 Clause (aa) 29 (viii)Post hole digger Manufacturing 5 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
65 Clause (aa) 26 (i) Rotavator Manufacturing 37 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
66 Clause (aa) 26 (ii) Cultivator Agriculture 1 5
of sub-Section Sector
2 of Section 3
67 Clause (aa) 29 (vii) Harvesting threshing Agriculture 1 5
of sub-Section and storage equipment: Sector
2 of Section 3 Post hole digger
68 Clause (aa) 27 (i)Seed-cum-fertilizer Manufacturing 13 5
of sub-Section drill (wheat, rice barley, etc (Industrial Inputs)
2 of Section 3 General Masses
69 Clause (aa) 27 (v)Rice trans planter Manufacturing 8 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
70 Clause (aa) 29 (xi)Wheat or rice reaper Manufacturing 13 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
71 Clause (aa) 23 Secondhand and worn Manufacturing 2,542 5
of sub-Section clothing or footwear (Industrial Inputs)
2 of Section 3 General Masses
72 Clause (aa) 53 The following General Masses 2 5
of sub-Section cinematographic
2 of Section 3 equipment imported during
the period commencing on
the 1st day of July, 2018
and ending on the 30th day
of June, 2023. (i) Projector
(ii) Parts and accessories
for projector (iii) Other
instruments and apparatus
for cinema (i
73 Clause (aa) 26 (xiv)Rotary tiller Manufacturing 29 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
74 Clause (aa) 29 (xviii) Harvesting Agriculture 1 5
of sub-Section threshing and storage Sector
2 of Section 3 equipment: Pruner/shears
75 Clause (aa) 29 (xvi)Tractor trolley or Manufacturing 4 5
of sub-Section forage wagon (Industrial Inputs)
2 of Section 3 General Masses
76 Clause (aa) 19 Waste paper Manufacturing 192 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
77 Clause (aa) 29 (x)Fodder rake Manufacturing 16 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
78 Clause (aa) 26 (xiii)Land leveler or land Manufacturing 2 5
of sub-Section planer (Industrial Inputs)
2 of Section 3 General Masses
79 Clause (aa) 28 (ii)Knapsack sprayers Manufacturing 7 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
80 Clause (aa) 28 (vi)Orchard sprayer Manufacturing 1 5
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
Sub Total 27,108
Reduced Rate of 7%
Legal Description Intended Estimate
Sr Rates
Reference Exemption or Concession Beneficiary Rs.Million
81 Clause (aa) 29 (xvi) Harvesting Agriculture 36 7
of sub-Section threshing and storage Sector
2 of Section 3 equipment: Reaping
machines
82 Clause (aa) 45 (i) Machinery for General Masses 46 7
of sub-Section preparing feeding stuff @
2 of Section 3 7%
83 Clause (aa) 45 (v) Evaporative air General Masses 36 7
of sub-Section cooling system
2 of Section 3
84 Clause (aa) 45 (ii) Incubators, brooders Poultry Sector 287 7
of sub-Section and other poultry
2 of Section 3 equipment @ 7%
85 Clause (aa) 45 (vi) Evaporative cooling General Masses 23 7
of sub-Section pad @ 7%
2 of Section 3
86 Clause (aa) 45 (ii)Incubators, brooders Manufacturing 13 7
of sub-Section and other poultry (Industrial Inputs)
2 of Section 3 equipment General Masses
87 Clause (aa) 45 (iii) Insulated sandwich General masses 3 7
of sub-Section panels @ 7%
2 of Section 3
88 Clause (aa) 45 (vi)Evaporative cooling Manufacturing 5 7
of sub-Section pad (Industrial Inputs)
2 of Section 3 General Masses
89 Clause (aa) 45 (iv) Poultry sheds @ 7% Poultry Sector 2 7
of sub-Section
2 of Section 3
90 Clause (aa) 45 (i)Machinery for Manufacturing 28 7
of sub-Section preparing feeding stuff (Industrial Inputs)
2 of Section 3 General Masses
91 Clause (aa) 45 (iii)Insulated sandwich Manufacturing 1 7
of sub-Section panels (Industrial Inputs)
2 of Section 3 General Masses
92 Clause (aa) 45v EvaporatManufacturing 4 7
of sub-Section system (Industrial Inputs)
2 of Section 3 General Masses
93 Clause (aa) 45 (iv)PoultManufacturing 11 7
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
Sub Total 496
Reduced Rate of 8%
Legal Description Intended Estimate
Sr Rates
Reference Exemption or Concession Beneficiary Rs.Million
94 Clause (aa) 64 Prepared Food, Manufacturing 851 8
of sub-Section foodstuff and sweetmeats (Industrial Inputs)
2 of Section 3 supplied by restaurants, General Masses/
bakeries, caterers and food items
sweetmeat shops
95 Clause (aa) 69 Meat and similar Manufacturing 165 8
of sub-Section products of prepared (Industrial Inputs)
2 of Section 3 frozen or preserved meat General Masses/
or meat offal of all types food items
including poultry, meat and
fish
96 Clause (aa) 68 Frozen prepared Manufacturing 380 8
of sub-Section preserved sausages and (Industrial Inputs)
2 of Section 3 similar products General Masses/
of poultry meat or meat food items
offal
Sub Total 1,396
Reduced Rate of 10%
Sr Legal Description Intended Estimate Rates
Reference Exemption or Concession Beneficiary Rs.Million
98 Clause (aa) 5 Raw Cotton and Ginned Agriculture 11,730 10
of sub-Section Cotton
2 of Section 3
99 Clause (aa) 6 Sales Tax @ 10% on The Manufacturing 9,112 10
of sub-Section Import Of Plant, Machinery (Industrial Inputs)
2 of Section 3 Not Manufactured Locally
& Having No Compatible
Local Substitutes, Subject
To Conditions Given In
S.No. 6 Of Table I of 8th
Schedule To Sales Tax
Act, 1990.
100 Clause (aa) 6 Machinery, equipment Manufacturing 1,411 10
of sub-Section and other capital goods (Industrial Inputs)
2 of Section 3 meant for initial installation,
balancing, odernization,
replacement or expansion
of oil refining (mineral oil,
hydro-cracking and other
value added petroleum
products), petrochemical
and petrochemical downst
101 Clause (aa) 15 Ingredients of poultry Agriculture 1,357 10
of sub-Section feed, cattle feed, except
2 of Section 3 soybean meal of PCT
heading 2304.0000 and oil-
cake of cotton seed falling
under PCT heading
2306.1000. Besides,
benefit of this S.No. will
also be available to
following goods:-
2308.9000 (Guar Meal),
2303
102 Clause (aa) 7 Flavored milk Manufacturing 607 10
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
103 Clause (aa) 11 Cream Manufacturing 525 10
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
104 Clause (aa) 10 Butter, sold in retail food items 10 10
of sub-Section packing under a brand
2 of Section 3 name
97 Clause (aa) 22 Soya bean seed on Manufacturing 14,664 10
of sub-Section import by solvent extraction (Industrial Inputs)
2 of Section 3 industries, subject General Masses
condition that no refund of
input tax shall be
admissible
105 Clause (aa) 57 Rock Phosphate Manufacturing 520 10
of sub-Section (Industrial Inputs)
2 of Section 3
106 Clause (aa) 5 Complete plants for Manufacturing 97 10
of sub-Section relocated industries.- (Industrial Inputs)
2 of Section 3 subject to condition.
Subject to conditions given
in preamble of Table-2 of
8th Schedule to the Sales
Tax Act, 1990.
107 Clause (aa) 1 Machinery and Manufacturing 989 10
of sub-Section equipment for development (Industrial Inputs)
2 of Section 3 of grain handling and
storage facilities including
silos-subject to conditions.
Subject to conditions given
in preamble of Table-2 of
8th Schedule to the Sales
Tax Act, 1990.
108 Clause (aa) 65 Ginned cotton Textile 88 10
of sub-Section
2 of Section 3
109 Clause (aa) 5 Complete plants for Manufacturing 264 10
of sub-Section relocated industries. (Industrial Inputs)
2 of Section 3
110 Clause (aa) 65 Supplies as made from Manufacturing 8,224 10
of sub-Section retail outlets as are (Industrial Inputs)
2 of Section 3 integrated with Board's General Masses
computerized system for
real-time reporting of sales
111 Clause (aa) 60 Fat filled milk If sold in Agriculture, 52 10
of sub-Section retail packing under a Livestock
2 of Section 3 brand name or trademark
112 Clause (aa) 1 Machinery and Manufacturing 228 10
of sub-Section equipment for development (Industrial Inputs)
2 of Section 3 of grain handling and General Masses
storage facilities 1
[including silos].
113 Clause (aa) 9 Cheese, sold in retail Agriculture, 9 10
of sub-Section packing under a brand Livestock
2 of Section 3 name
114 Clause (aa) 58 Reduced rate of 10% on Energy Sector 3,520 10
of sub-Section import of LPG
2 of Section 3
115 Clause (aa) 46 Multimedia Projectors Media Productions 5 10
of sub-Section @ 10%
2 of Section 3
116 Clause (aa) 8 Yogurt Manufacturing 514 10
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
117 Clause (aa) 1 Soybean meal Manufacturing 6,597 10
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
118 Clause (aa) LPG Manufacturing 1,886 10
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
119 Clause (aa) 6 Plant and machinery not Manufacturing 443 10
of sub-Section manufactured locally and (Industrial Inputs)
2 of Section 3 having no compatible local General Masses
substitutes
120 Clause (aa) 60 Fat filled milk Manufacturing 3,915 10
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
121 Clause (aa) 11 Cream, sold in retail 1 10
of sub-Section packing under a brand
2 of Section 3 name
122 Clause (aa) 57 Rock phosphate Manufacturing 1 10
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
123 Clause (aa) 15Ingredients of poultry Manufacturing 842 10
of sub-Section feed, cattle feed, except (Industrial Inputs)
2 of Section 3 soya bean meal of PCT General Masses
heading 2304.0000 and
oilcake of cotton-seed
falling under PCT heading
2306.1000
124 Clause (aa) 59 Products of milling Manufacturing 57 10
of sub-Section industry except wheat and (Industrial Inputs)
2 of Section 3 meslin flour General Masses
125 Clause (aa) 22 Soya bean seed Manufacturing 4 10
of sub-Section (Industrial Inputs)
2 of Section 3 General Masses
126 Clause (aa) 14 Milk and cream, Manufacturing 1,468 10
of sub-Section concentrated or containing (Industrial Inputs)
2 of Section 3 added sugar or other General Masses
sweetening matter
127 Clause (aa) 6 Machinery, equipment Manufacturing 8 10
of sub-Section and other capital goods (Industrial Inputs)
2 of Section 3 meant for initial installation, General Masses
balancing, modernization,
replacement or expansion
of oil heavy chemical
industry, cryogenic facility
for ethylene storage and
handling. refining (mineral
oil, hydro-cracking and
other value added
petroleum products),
petrochemical and
petrochemical downstream
products including fibers
and
128 Clause (aa) 10 Butter Food Products 181 10
of sub-Section General Masses
2 of Section 3
129 Clause (aa) 12 Desi ghee Food Products 48 10
of sub-Section General Masses
2 of Section 3
130 Clause (aa) 9 Cheese Food Products 208 10
of sub-Section General Masses
2 of Section 3
131 Clause (aa) 13 Whey Food Products 10 10
of sub-Section General Masses
2 of Section 3
Sub Total 69,592
Reduced Rate of 12%
Sr Legal Description Intended Estimate Rates
Reference Exemption or Concession Beneficiary Rs.Million
132 Clause (aa) 50 LNG/RLNG Industry/General 759 12
of sub-Section Masses
2 of Section 3
134 Clause (aa) 66 Supplies as made from Manufacturing 1,082 12
of sub-Section retail outlets as are (Industrial Inputs)
2 of Section 3 integrated with Board's General Masses
computerized system for
real-time reporting of sales
133 Clause (aa) 51 LNG/RLNG Energy Sector 17,480 12
of sub-Section General Masses
2 of Section 3
Sub Total 19,321
Reduced Rates under 9th Schedule
Legal Description Estimate
Sr Intended Beneficiary
Reference Exemption or Concession Rs. Million
1 9th Schedule Mobile Phones General Masses 27,096
Sub Total 27,096
Grand Total 578,456
Explanatory notes on Sales Tax Estimates
A. Types of Concessions
In sales tax act, concessions are granted broadly by
three ways
I. Zero rating,
II. Exemptions,
III. Reduced rates.
1. Zero rating
Under Section 4 of the Act, goods exported, or the goods specified in the Fifth Schedule; 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); such other goods, as the Federal Government may specify by notification in the official Gazette, whenever circumstances exist to take immediate action for the purposes of national security, natural disaster, national food security in emergency situations and implementation of bilateral and multilateral agreements are charged to tax at the rate of zero per cent.
- Exemptions
Under section 13 of the Sales Tax Act 1990, supply of goods or import of goods specified in the Sixth Schedule are, subject to such conditions as may be specified by the Federal Government, are exempt from tax under the Act. The Federal Government is empowered to issue exemptions whenever circumstances exist to take immediate action for the purposes of national security, natural disaster, national food security in emergency situations and implementation of bilateral and multilateral agreements, by notification in the official Gazette. Exemptions can be on any supplies made or imports, of any goods or class of goods from the whole or any part of the tax chargeable under the Act, subject to the conditions and limitations specified therein.
- Reduced rates
Under section 3 (2) (b), Federal Government is empowered to declare that in respect of any taxable goods, the tax shall be charged, collected and paid in such manner and at such higher or lower rate or rates as may be specified, subject to such conditions and restrictions as it may impose, by notification in the official Gazette.
B. Nature of exemptions and concessions
In sales tax act, concessions are granted broadly by three ways: i.e. Zero Rating,
Exemptions, and reduced rates.
- Product-based Concessions
In some cases, product based concession is granted under sales tax act, for example, in case of food and grocery items, certain products are exempt or have reduced rate of sales tax. It may get tricky because these exemptions can then have rules within rules.
Prepared foods and ready-to-eat food items may be exempted or have reduced rate whereas the same items if sold under brand name may not have the concession.
- Use-based Concessions
Under the Act certain products that are intended to be used for in-house consumption, for use of a specific organization are given tax concession. Typically, this is where, the end consumers are not liable to be taxed, or intended to be given tax concession.
- Buyer-based Concessions
Diplomats, diplomatic missions, diplomatic organizations, non-profit organizations or government agencies often are not required to pay sales tax. This concession in the form of zero rating or exemption is extended to these national and international agencies.
- Economic activity-based concessions Certain tax concessions under the act are granted for a specific economic activity. Like export promotions or certain activities in export processing zones. A unique case in Pakistan is the case of exemptions in erstwhile Federally Administered Tribal Areas (FATA), where exemptions are granted for mainstreaming of the geographic areas.
C. Suggestion for further improvement of Sales Tax estimates
The reporting and calculation of tax expenditures estimates may be improved through:
Legal Enactment
In previous estimates it was suggested that in sales tax act, concessions are granted broadly by three ways, i.e. zero rating, exemptions, and reduced rates. The sales tax return of any registered person may not be considered as true and valid return, without mentioning exempt supply, if any. This will help in computing the exemption incidence when exempt supplies are made by various registered persons in supply chain.
Administrative Measures
Industry-ratios and/or standardized minimum value addition formulas may be issued, with the consultation of major industries, to have more accurate and rational estimates, and so that exact extent of value addition in each industry can be estimated.
Engagement of Experts and Internees
Various expert, working in the universities may be engaged to develop a broad based consultancy and opportunities may be provided to young university graduates to apply various statistical tools on the data for improvement in reporting and calculating tax buoyancy
Training of the Team
The team engaged in SPR&S may be trained in National and International well reputed institutes for understanding and opting international best practices.
===============================================================================================
1 Chapter-99 Exemptions 12,635
2 FTA & PTA Exemptions 34,210
3 5th Schedule Exemptions & Concessions 137,418
4 General Concessions: Automobile sector, 55,877
E&Ps, CPEC, etc.
5 Export Related Exemptions 47,631
Total 287,771
===============================================================================================
Legal ReferenExemption Type Beneficiary Sector CD Cost of
Exemption
FY 2019-20
Chapter-99 Exemptions
9901.0000- Chapter-99 Exemptions: Agencies under the United 188
Goods imported by Nations
various agencies of the
United Nations
9902.0000- Chapter-99 Exemptions: Diplomats/Embassies/ 506
Goods imported by Consulates under the
Diplomats/Embassies/ Diplomatic and Consular
Consulates Privileges Act, 1972
9903.0000- Chapter-99 Exemptions: Privileged personnel or by 3,240
Goods imported by organizations or by any
privileged personnel or person authorized by the
by organizations or by contracting parties, under
any person authorized by grant-in-aid agreements
the contracting parties, (including those
under grant-in-aid agreements which cover off
agreements budget foreign contributions
or funds brought by
registered INGO's without
any financial liabilities to the
Government of Pakistan)
9904.0000- Chapter-99 Exemptions: Vehicles in CKD condition, 7
Vehicles in CKD imported by recognized
condition, imported by local manufacturer for
recognized local supply to diplomat,
manufacturer for supply diplomatic mission,
to diplomat, diplomatic privileged person
mission, privileged
person
9905.0000- Chapter-99 Exemptions: Dignitaries of UAE, Qatar 0
Imports by Dignitaries of and Bahrain
UAE, Qatar and Bahrain
9906.0000- Chapter-99 Exemptions: The President and the 0
Goods imported under Prime Minister of Pakistan.
the President/Prime The Governors and the
Minister/Governors/'s
Salary, Allowances and Acting Governors of the
Privileges Act, 1975 Provinces
9908.0000- Chapter-99 Exemptions: Gifts received by the -
Goods received as gift or Federal, the provincial or
donation from a foreign any public sector
government or organization
organization by the
Federal or Provincial
Government or any
public sector
organization or Goods
received as gift by
Pakistani organizations
from Church World
Services or the Catholic
Relief Services
9909.0000- Chapter-99 Exemptions: Articles, value of which 7
Articles, value of which does not exceed
does not exceed Rs.20,000/-per parcel, if
Rs.20,000/-per parcel, if imported through post or
imported through post or courier service as
courier service as unsolicited gift parcel
unsolicited gift parcel
9910.0000- Chapter-99 Exemptions: Samples of no commercial 28
Samples of no value imported by the
Commercial value manufacturers
Imported by
manufacturers
9911.0000- Chapter-99 Exemptions: (i) Relief goods donated for 737
Relief goods donated for free distribution
Free distribution among (ii) Plant, machinery and
the victims of natural equipment imported by way
disaster or other of donation for installation in
catastrophe OR Plant, the earthquake hit districts
machinery and as certified by
equipment imported by ERRA/National Disaster
way of donation for Management Authority.
Installation in the
Earthquake hit districts
9912.0000- Chapter-99 Exemptions: Imports by Edhi Foundation 23
Imports by Edhi
Foundation
9913.0000- Chapter-99 Exemptions: Gifts or donations received 3,111
Gifts or donations by a charitable non-profit
received by a charitable making hospital or
institution
non-profit making
hospital or institution
9914.0000- Chapter-99 Exemptions: Imports by Charitable 1,716
Imports by Charitable Institutions and Hospitals
==================================================================================================
Institutions and Hospitals
==================================================================================================
9915.0000 - Chapter-99 Exemptions: Goods imported by or 309
Goods imported by or donated to non -profit
donated to non -profit making educational and
making educational and research institutions
research institutions
9916.0000 - Chapter-99 Exemptions: Goods supplied free of cost 112
Goods supplied free of as replacement of identical
cost as replacement of goods previously imported
identical goods including goods imported
previously imported within warranty period
Replacement Goods.
9922.0000 - Chapter-99 Exemptions: Ship spares, stores and 45
Ship spares, stores and equipment imported for use
equipment imported for in ships registered in
use in ships registered in Pakistan Temporary Import
Pakistan or Export.
9924.0000 - Chapter-99 Exemptions: Eye cornea 1
Eye cornea
9925.0000 - Chapter-99 Exemptions: Medical 543
Artificial kidneys, appliances/equipment.
hemodialysis machines,
hemodialyzers, A.V.
fistula needles,
hemodialysis fluids &
powder, blood tubing
tines for dialysis, reverse
osmosis plants for
dialysis, double lumen
catheter for dialysis,
catheters for renal failure
patients, peritoneal
dialysis solution and
cardiac catheters.
colostomy bags and
appliances identifiable
for Ostomy use
9927.0000 - Chapter-99 Exemptions: Pharmaceutical raw 84
Pharmaceutical raw materials if imported for
materials if imported for manufacture of
manufacture of contraceptives
contraceptives in
accordance with the
input output ratios
determined by the
Directorate of Input
Output Co-efficient
Organization.
Contraceptives and
accessories thereof.
9930.0000 - Chapter-99 Exemptions: Any goods, including 484
Any goods, including vehicles, specified in the
vehicles, specified in the First schedule to the
First schedule to the Customs Act, 1969 (IV of
Customs Act, 1969 (IV of 1969) imported by
1969) imported by Federal/Provincial/ Local
Federal/Provincial/ Local Government Departments,
Government Municipal bodies and
Departments, Municipal Development authorities
bodies and Development subject to the condition that
authorities subject to the the goods are donated to
condition that the goods the importers for use in an
are donated to the approved foreign grant
importers for use in an funded project
approved foreign grant
funded project under a
proper grant relating to
Capital Aid-Technical
Assistant Agreement
signed between the
Government of Pakistan
and a foreign
government or agency
subject to concurrence of
the Federal Board of
Revenue.
9931.0000 - Chapter-99 Exemptions: Ground handling equipment 5
Ground handling imported by airlines
equipment, service and
operation vehicles,
catering equipment and
fuel trucks not
manufactured locally,
imported by domestic
airlines or by any other
service company to
which a license has been
issued by the Civil
Aviation Authority for
such purposes.
9937.0000 - Chapter-99 Exemptions: Certain items imported by 226
Items relating to disabled the Disabled persons
persons, like Wheel
chairs, Artificial human
part, Items used for
rehabilitation of blind
persons etc..
9938.0000 - Chapter-99 Exemptions: Certain Disposables, as are 958
Disposables, as are not not manufactured locally,
manufactured locally, for for Cardiology/cardiac
Cardiology/cardiac surgery, Neurovascular,
surgery, Neurovascular, Electrophysiology, Endo-
Electrophysiology, Endo- surgery, Endoscopy,
surgery, Endoscopy, Oncology, Urology,
Oncology, Urology, Gynecology;
Gynecology;
9939.0000 - Chapter-99 Exemptions: Diagnostic kits for HIV and 304
Diagnostic kits for HIV Hepatitis
and Hepatitis
9941.0000 - Chapter-99 Exemptions: Goods imported by or -
Goods imported by or donated to municipal
donated to municipal authorities including
authorities including development authorities,
development authorities , Federal Government,
Federal Government, Provincial Government,
Provincial Government, Government of Azad
Government of Azad Jammu and Kashmir,
Jammu and Kashmir, Government of Gilgit-
Government of Gilgit- Baltistan, National Disaster
Baltistan, National Management Authority
Disaster Management (NDMA), Provincial
Authority (NDMA), Disaster Management
Provincial Disaster Authority (PDMA) and
Management Authority Government
(PDMA) and Emergency/Rescue
Government services,
Emergency/Rescue services,
Sub-Total:- Chapter-99 Exemptions 12,635
=======================================================================================================
FTA & PTA Exemptions: Bilateral arrangements with different Governments /Regional
=======================================================================================================
commitments
=======================================================================================================
558(I)/2004 Table I Section 19 FTA: General exemption on 0
import from ECO
558(I)/2004 Table II Section 19 FTA: General exemption on 76
import from SAARC
1296(I)/2005 Table-I Section 19 FTA: Pak-China Early 0
Harvest Program
(prescribes FTA CD Rate)
1296(I)/2005 Table-II Section 19 FTA: Pak-China Early 0
Harvest Program
(prescribes %age of
concession in CD Rate)
1274(I)/2006 Table-I Section 19 FTA: General exemption on 394
import from SAARC
countries under SAFTA
Agreement
1274(I)/2006 Table-II Section 19 FTA: General exemption on 7
import from SAARC
countries under SAFTA
Agreement
SRO 659(I)/2007 Table-I Section 19 FTA: General exemption on 9,323
import from China under
Pak-China FTA
SRO 659(I)/2007 Table-II Section 19 FTA: General exemption on 1,876
import from China under
Pak-China FTA
SRO 1640(I)/2019 - Section 19 FTA: General exemption on 13,258
import from China under
Pak-China FTA
SRO1151(I)/2007 Table Section 19 PTA: General exemption on -
import from Mauritius under
PTA
SRO1261(I)/2007 Table I Section 19 PTA: General exemption on 2,299
import from Malaysia under
PTA
SRO1261(I)/2007 Table II Section 19 PTA: General exemption on 873
import from Malaysia under
PTA
SRO741(I)/2013 Table Section 19 PTA: General exemption on 3,303
import from Indonesia
under Pak-Indonesia PTA
SRO280(I)/2014 d Section 19 FTA: General exemption on 375
import from Sri Lanka under
Pak-Sri Lanka FTA
SRO280 (I)/2014 I Section 19 FTA: General exemption on
import from Sri Lanka under
Pak-Sri Lanka FTA
SRO280 (I)/2014 Table-I Section 19 FTA: General exemption on 2,260
import from Sri Lanka under
Pak-Sri Lanka FTA
SRO280 (I)/2014 TABLE- Section 19 FTA: General exemption on 165
III import from Sri Lanka under
Pak-Sri Lanka FTA
Sub-Total:-FTA & PTA Exemptions 34,210
5th Schedule (Customs Duty)
5th Schedule (Customs Exemption under 18 (1A) Imports of Plant, Machinery, 55,595
Duty) Part-I of the Customs Act, 1969 Equipment and Apparatus,
including Capital Goods for
various industries/sectors
5th Schedule (Customs Exemption under 18 (1A) Import of Active 1,728
Duty)-Part II Table-A of the Customs Act, 1969 Pharmaceutical Ingredients
by pharma sector
5th Schedule (Customs Exemption under 18 (1A) Excipient/Chemicals by 589
Duty)-Part II Table-B of the Customs Act, 1969 pharmaceutical sector
5th Schedule (Customs Exemption under 18 (1A) Drugs (mostly Life Saving) 6,955
Duty)-Part II Table-C of the Customs Act, 1969 by pharmaceutical sector
5th Schedule (Customs Exemption under 18 (1A) Packing Materials/Raw 1,080
Duty)-Part II Table-D of the Customs Act, 1969 Materials for Packing by
pharmaceutical sector
5th Schedule (Customs Exemption under 18 (1A) Diagnostic Kits/Equipment) 3,151
Duty)-Part II Table-E of the Customs Act, 1969 by pharmaceutical sector
5th Schedule (Customs Exemption under 18 (1A) Poultry and Textile Sectors 39,227
Duty)- Part III of the Customs Act, 1969
5th Schedule (Customs Exemption under 18 (1A) Machinery and Equipment 547
Duty)-Part IV of the Customs Act, 1969 for Textile Sector
5th Schedule (Customs Exemption under 18 (1A) Automotive Manufacturing 66
Duty)-Part V of the Customs Act, 1969 Sector (Auto Policy)
5th Schedule (Customs Exemption under 18 (1A) Aviation Sector (Aviation 403
Duty)- Part VI of the Customs Act, 1969 Policy)
5th Schedule (Customs Exemption under 18 (1A) Essential edible items like 7,567
Duty) Part-VII of the Customs Act, 1969 pulses, potato etc, Oil and
Oil products, Inputs of
export sectors etc.
5th Schedule (Customs Exemption under 18 (1A) Miscellaneous 20,509
Duty)- Part VIII of the Customs Act, 1969
Sub-Total:- 5th Schedule (Customs Duty) 137,418
268 (I)/2015 Section 19 Mining equipment & 2,452
machinery imported by Thar
Coal Field
565 (I)/2006 Section 19 Raw material of survey 14,331
based Local industries:
Stationary/Electrical
Capacitors/Pesticides/
Distilled Faty Acids/CRC &
GI coils/Fans/
Transformers/Electric
Motors manufacturers
SRO 499 (I)/2013 Section 19 Auto Sector: General 434
concession for import of
Hybrid Electric Vehicles
SRO678 (I)/2004 Section 19 Exploration and Production 5,024
(E&P)Companies
107 (I)/2019 and Section 19 Textile Sector (Local Yarn -
SRO 48 (I)/2018 Producers): Import of
Cotton
SRO 121 (I)2014 Section 219 Afghan Transit Trade 7
SRO 48 (I)/2018 Section 19 Import of cotton -
SRO 642 (I)/2016 Section 19 Imports by M/s CSCEL for 19
Karachi-Peshawar
Motorway
SRO 644 (I)/2018 Section 19 General: Concession of CD 475
on import of electric motor
vehicles
SRO40 (I)/2017 Section 19 Lahore Orange Metro Train 50
Project
SRO655 (I)/2006 Section 19 Vendors of Automotive 13,361
sector
SRO656 (I)/2006 Section 19 OEMs of Automotive Sector 15,930
SRO235 (I)/2020 Section 19 COVID-19 Exemptions- 810
General
SRO318 (I)/2020 Section 19 COVID-19 Exemptions- 2,614
General
SRO556 (I)/2020 Section 19 COVID-19 Exemptions - 364
General
SRO558 (I)/2020 Section 19 COVID-19 Exemptions - 6
General
SRO559 (I)/2020 Section 19 COVID-19 Exemptions - -
General
Sub-total 55,877
Export Related Exemptions
SRO450 (I)/2001 Section 219 DTRE 5,707
SRO450 (I)/2001 Section 219 Manufacturing Bonds 9,976
SRO 327 (I)/2008 Section 219 Export Oriented Units 15,338
SRO 492 (I)/2008 Section 219 Temporary Imports 10,007
SRO Section 219 EPZ (abroad) 6,603
450 (I)/2008/9917.0000
Sub-Total:- 47,631
Grand Total: 287,771
Benchmar for Customs Duty Cost Estimation
a) Statutory rates of Customs Duty (CD), Regulatory Duty (RD), and Additional Customs Duty
(ACD) have been taken as benchmark rates. Customs related exemptions / concessions are generally sector based.
b) While making calculations, any deviation from statutory rates has been considered as
exemption / concession.
c) Period of study is FY 2010, i.e. July 2019 to June 2020.
d) Report is based on figures in respect of customs duty exemptions given under chapter-99 (Rs.12,635 million). FTA/PTAs (Rs.34,210 million), 5th Schedule to Customs Act, 1969 (Rs.137,418 million) and exemptions given under other SROs (Rs.55,877 million) including export oriented exemption/concession SROs.
Methodology for Customs Duty Cost Estimation Data for estimations of Customs is also taken from FBR’s official database, and estimations were Calculated against statutory rates of duties, using revenue forgone approach.
VAT GAP MODEL:
USING SUPPLY-USE TABLES
- FRAMEWORK OF VAT GAP
Definition of the VAT Gap: The VAT Gap refers to the VAT Policy Gap or the VAT
Compliance Gap.
The VAT Policy Gap: The VAT Policy Gap is the difference between the Potential VAT collectible under a benchmark or standard regime’ of the VAT (where there are no exemptions, lower rates or special treatment of any type of consumption or sector/class of taxpayers), and the Potential VAT collectible under the current regime (which includes any special treatment of consumption or sector/class of taxpayers). The VAT Policy Gap estimates the revenue foregone due to the current policy of the government.
The VAT Compliance Gap: The VAT Compliance Gap is the difference between this Potential VAT collectible under the current regime and the Actual VAT collection. The VAT Compliance Gap estimates the gap in VAT due to non-compliance by taxpayers. This study estimates VAT Policy GAP for the year 2021.
- BACKGROUND ON VAT-GAP
Efficient collection of taxes is considered as a cornerstone of a good tax system. However, because of non-compliance and other VAT foregone this efficiency may not be achieved.
Therefore, it creates a Gap between potential VAT and actually collected VAT. Given tax base, if taxes remain unpaid, would cause burden on those who are contributing in this regards. Which is unfair and creates distortions in the economy. Further these unpaid VAT would put burden on the overall public finances resulting in either curtailing the government expenditures or increase the debt burden. Both of which are detrimental for growth and development goals of the government. Despite healthy revenue growth especially by FBR (for the period 2001-2020 average growth is 13.9%), Pakistan’s overall revenue collection has been low when compared to the expenditure outlays.
One of the core reason for these under or low payment in relation to the base is because of Tax Expenditures1. These are normally reported2 and Governments throughout the world use tax expenditures as an alternative policy option to achieve social objectives and promote economic growth. Tax expenditures as a percentage of the total tax collected (income, sales, FED, and customs) have been increasing over time. In Tax
Expenditure Report 2020, based on data pertaining to Financial Year 2018-19, it has increased to an estimated Rs. 1,150 billion in which Tax expenditure for Sales Tax amounted the highest at Rs. 518.8 billion (45% of the total), and in Customs Rs. 253.1 billion (22%). In FY 2018-19, FBR’s tax collection was Rs. 3,828 billion. Overall, tax expenditure to GDP ratio stands at around 3%.
Understanding the scale and the scope of VAT policy gap and evaluating cost and benefit analysis is prerequisite for fiscal governance especially for high deficit countries like Pakistan. One of the suitable approaches to measure the VAT Gap is Top-down approach. In the present analysis only “VAT-GAP” model estimation is done using Supply Use Tables. Sales Tax is currently single largest tax revenue source for FBR. In FY 2019-20 it amounted to 1,597 Billion Rs. which is approximately 40% of the total tax collected by FBR. For Sales Tax (Domestic) the base is considered to be Large Scale Manufacturing (LSM) and for Sales Tax (Imports) the base is imports.
The assessment of VAT gap analysis provides a tool to tax administrators, policy makers and relevant stakeholders, which can be roped through policy choices.
- METHODOLOGY
We use a detailed input-output model of Pakistan’s economy to estimate the potential VAT form domestic sales. This supply-use table provide information on the final consumption as well as the production and use of goods and services in the economy.
Not only does the model provide information on total use or gross sales for each of the 40 sectors in the supply-use table but it also provides crucial information on the intermediate and value of primary use, the value of import and exports, and the value of investment expenditures. In other words, the Input-output model provides the necessary information to the model ‘Pakistan’s potential sales tax base’, including the taxable supplies, input credits, and refunds on exports. The most recent Input-output model for Pakistan’s economy is for 20173. We re-benchmark this model to reflect the level of Pakistan’s economy by sectors values for 2020, using national accounts data. The accuracy of our VAT gap estimates suffer significantly because the I-O model does not fully capture the informal sector.
- ANALYSIS
4.1 Consumption Approach
The supply-use table provides information on the final consumption of consumer, government, exporters. The final consumption of commodities includes the VAT in the value. We eliminate the VAT from consumption at commodity level first, then we apply the Commodity VAT rate to calculate the potential VAT Policy Gap using the Supply-Use table.
The VAT Policy Gap is the difference between the Potential VAT collectible under a benchmark of the VAT (where there are no exemptions, lower rates or special treatment of any type of consumption or sector/class of taxpayers), and the Potential VAT collectible under the current regime (which includes any special treatment of consumption or
sector/class of taxpayers).
Potential policy VAT GAP= (Final Consumption - VAT) × - (( - )×
=============================================================================
Table 1: VAT Collected upto June 2020
VAT Collected VAT Collected
(Rs. Million) ($ billion4)
ST(Imports) 876,352 5.84
ST(Domestic) 720,532 4.81
Total ST 1,689,477 10.65
FED (Imports) 9,518 0.06
FED (Domestic) 240,956 1.61
Total FED 250,474 1.67
Customs 626,612 4.18
VAT Collected 2,473,970 16.50
=======================================================================================================
Table 2: Supply-Use Tables: Potential VAT GAP calculated using Consumption
=======================================================================================================
Approach
Sales Tax VAT Under VAT Gap VAT Gap
($Billion) Current ($Billion) (% of Actual VAT
Regime Collected)
($Billion)
VAT Policy GAP 25.7 22.21 3.5 21.0
• The estimates suggest VAT policy gap is about $ 3.5 billion which is approximately
21 percent of Actual VAT collected upto 2020.
4.2 Value Added Approach
To understand the methodology used to estimate the VAT gap, it is necessary to review Some GDP accounting identities. There are three approaches to estimate the GDP, the Income approach, expenditure approach, and the production approach or value added approach. As Input-output table uses both the expenditures approach (horizontally along the row of the model) and the model value added approach (vertically along the columns of the model) to GDP accounting.
The following GDP identities are
GDP = C + I + G + X - M = { ValueAddedc = {(Totaluse - Value_Added)c (1)
Where C is the final consumption expenditures. I is the gross investment expenditures, G is the government purchases of goods and services, X is the value of exports and M is the value of imports The subscripts c stands for the commodities (sectors) We can obtain an expression for the sales tax base by solving the left-hnad-side of (1) for final consumption (C), which yields the following expression
Sales tax base=GDP+M-I-G-X (2)
Substituting (2) into the right-hand-side (1), we obtain an equivalent expression for the
sales tax base.
Sales tax base= ( { Value Adeed i + M i - I i - X i) - G
Multiplying (3) by the sales tax rate ( ) and re-arranging the resulting expression, we
obtain the following definition
Potential VATC ({ tc X (Total Use c + M i - I i - X c - G c ))
Potential VAT Policy Gap =({(Total Use c + M i - I i - X c - G c )) x t
- ({tc x (Total Use c + M i - I i - X c - G c )
The equation (5) provides operational definitions that are useful for estimating VAT Policy GAP.
=============================================================================
Table 3: Supply-Use Tables: Potential VAT GAP calculated using Value Added
=============================================================================
Approach
=============================================================================
Sales Tax VAT under VAT Gap VAT Gap
($Billion) current ($Billion) (% of Actual
Regime VAT
($Billion) Collected)
VAT Policy GAP 26.1 22.3 3.8 23.0
=============================================================================
• Using the value added approach, the estimates suggest gap is about $ 3.8 billion which is approximately 23 percent of VAT under current regime. This gap close to the VAT policy gap measured by the consumption approach.
- FBR Collection Profile
Major part of government tax revenues is collected by FBR. A substantial increase in the tax collections has been witnessed during last two decades. FBR tax collection was just around Rs.392 billion in 2000-01 which has jumped to around Rs.4 trillion in 2019-20. The average growth till FY 2017-18 remained 14.1%, however, due to Covid-19 pandemic the yearly growth has plummeted, thus affecting slightly the average annual growth for the period 2001-2020 as well (13.9%).
1.1 Five Years FBR Collection Trend
The last five years’ collection trend is shown in the following table. The 5 years average growth was 9.3%, however, by excluding the last two years, average growth for normal years i.e. FY 2013-14 to FY 2017-18 stands at 14.6% (Table 1).
Table 1: FBR Collection Trend
Tax 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 5 Years
Heads Avg.
Growth
(%) *
DT 877,255 1,033,720 1,217,474 1,344,226 1,536,583 1,445,508 1,523,445 15.7
ST 996382 1087790 1,302,371 1,328,965 1,485,306 1,459,213 1,596,877 12.2
FED 138084 162248 188,055 197,911 213,493 238,186 250,474 12.1
CD 242810 306220 404,572 496,772 608,373 685,575 626,612 21.0
Total 2,254,531 2,589,978 3,112,472 3,367,874 3,843,755 3,828,482 3,997,408 14.6
(*) for the Years 2013-14 to 2017-18
Tax-GDP Ratio
Similarly, in the tax-GDP ratio, similar trend has been noticed and it kept on rising till FY 2017-18 and reached 11.2 (Graph 1), but later on this healthy trend couldn’t continue during FY 2018-19 and FY 2019-20, which is mainly attributed to Covid-19 pandemic related economic challenges.
1.2 CFY Collection: July-March 2020-21
After a slow growth in previous two years now the collection is picking up, which is evident from table 2. This performance is very encouraging as compared to previous couple of years. The nine months target has been achieved to the exte
Table 2: CFY Collection: July-March 2020-21
Rs. Million
Tax Heads 2020-21 2019-20 Growth (%)
DT 1,246,379 1,142,286 9.1
ST 1,415,770 1,250,222 13.2
FED 191,686 186,472 2.8
CD 541,049 481,478 12.4
TOTAL 3,394,885 3,060,458 10.9
With the recovery of economy the revenue collection is also improving, and with further improvements in coming months hope the tax collection shall also increase, thus enabling FBR to achieve its revenue FY 2021-22 target.
- Evidence-Based Revenue Forecasting (EBRF) FY 2021-22
FBR collects Direct Taxes (DT), Sales Tax (Domestic & Imports), Federal Excise Duty (FED) and Customs Duties (CD). In this study tax-wise buoyancy estimates have been used to forecast the FBR head-wise revenues for FY 2021-22. The tax buoyancy is an indicator to measure efficiency and responsiveness of revenue mobilization in response to growth in the GDP or national income. A buoyant tax means the tax revenues increase more than proportionately in response to a rise in national income/GDP/base.
2.1 Methodology
The SPRS Wing before budget, projects the head-wise revenue estimates based on buoyancy estimates6 from previous years on rolling basis. Tax-wise buoyancy estimates are calculated by using historical collection and respective bases data. The current tax-wise buoyancy estimates are estimated from data for the years 1999-2000 to 2019-20 in respect of economic indicators i.e. GDP, Non-agri GDP, LSM and Imports.
The respective proxy bases of head-wise FBR taxes are as under:
Direct Taxes (DT) Non-agri GDP
Sales Tax Domestic (STD) Large Scale Manufacturing (LSM)
Sales Tax Imports (STM) Import Value
Customs Duties (CD) Dutiable Import Value
Federal Excise Duty (FED) LSM
Buoyancy estimates are derived as = % Change in Actual Revenues
% Change in Respective Base
Since these tax bases have a dynamic
relationship with GDP, in the second step % Change in Respective Base
we have calculated the buoyancies of % Change in GDP
these tax bases with GDP =
Finally these two are multiplied to arrive at respective tax to GDP buoyancies=
% Change in Actual Revenues % Change in Respective Base
% Change in Respective Base % Change in GDP
Using these buoyancy estimates autonomous growth for each tax is estimated by using the projections provided by Finance Division for each proxy base.7 It provides for the GDP Growth and inflation forecast for upcoming year. GDP value used for this projection of growth is Gross Value Addition of Sectors at Constant Factor Costs. Using the inflation forecasts these GDP growth estimates are converted into GDP growth estimates at Current Factor Cost. Further, GDP-Gross value addition at Current Factor Cost is used for measuring the Buoyancy estimates to be used for revenue forecasts. In respect of Direct Taxes (DT) Non-Agri GDP has been taken as its proxy base. The buoyancy of direct taxes has been estimated in two steps: in the first step Direct Tax to Non-Agri GDP and in second step Non-Agri-GDP to GDP (Gross Value Addition-Current Factor Cost) is estimated. Then two buoyancy estimates have been multiplied to estimate the Direct Taxes to GDP Buoyancy estimates.
Direct taxes to Non-Agri GDP Buoyancy (B1) = % Change in Direct Taxes
% Change in Non-Agri GDP
Non-Agri GDP to GDP Buoyancy (B2) = % Change in Non-Agri GDP
% Change in GDP
Direct taxes to GDP Buoyancy = B1 * B2
Similarly for Customs (CD) the proxy base is dutiable imports, whereas the projections as provided by Finance Division are for the total imports. Therefore, the buoyancy has been estimated in two steps: first Customs to dutiable imports and in second step Dutiable Imports to total Imports and then these two have been multiplied to get the CD buoyancy estimates.
For Federal Excise (FED) and Sales Tax (Domestic) the base is Large Scale Manufacturing (LSM) and for Sales Tax (Imports) the base is imports. Therefore, for these taxes the buoyancy values are directly estimated from proxy bases. Following table reflects the respective buoyancies which are estimated using simple log-log regression method in excel sheet by using log values of actual data for taxes.
Table 3: Buoyancy Results
Direct Tax (DT)
DT to Non-Agri GDP Non-Agri-GDP to GDP DT to GDP
1.1 0.99 1.13
Sale Tax-Domestic (STD) 1.11
Sales Tax-Imports (STM) 0.92
Customs (CD)
Customs to
Custom-Dutiable Imports Dutiable Imports to Imports Imports
0.95 0.95 0.90
FED 0.77
Calculating Autonomous Growth
In the second step autonomous growth has been estimated by multiplying buoyancy estimates (Table 3) to projected growths of respective bases (Table 4):
Table 4: Growth Assumptions for FY 2021-22
Macroeconomic Indicators Projected Growths (%)10
GDP (Nominal) 13.22 LSM
(Nominal) 14.70
Imports 12.00
Inflation 8.20
GDP (Real) 5.02
LSM (Real) 6.50
Table 5 provides an autonomous growth parameters for each tax head. These are based on the buoyancy estimates from the last 20 years actual revenue collection data and the macroeconomic proxy bases provided by Pakistan Bureau of Statistics/Annual Economic Surveys and the growth projections published in Budget Strategy Paper / Economic Adviser’s Wing, Finance Division.
============================================================
Table 5: Autonomous Growth
============================================================
[Base Growth * Buoyancy] Autonomous Growth (%)
DT (GDP non-agri * DT Buoyancy) 14.89
ST(D) (LSM * STD Buoyancy) 16.31
STM (Imports * STM Buoyancy) 11.03
CD (Imports * CD Buoyancy) 10.85
FED (LSM * FED Buoyancy) 11.30
These autonomous growths will be used to project the autonomous growth estimates of respective revenue heads. To be sure of the results robustness a small exercise was also done by using the reduced and increased nominal growths by 10%. The resulting change was insignificant.
2.2 Head-wise Revenue Projections FY 2021-22
The autonomous growth (Table 5) has been applied on base year’s expected collection (i.e. 2020-21) for each respective head to project an increase of Rs. 636 billion. This addition has been added in the expected collection of FY 2020-21 thus, the revenue forecast for FY 2021-22 without additional Policy/Admn measures has been obtained to the tune of Rs. 5,336 billion. The required growth over the expected collection of FY 2020-21 i.e. Rs. 4,700 billion would be 13.5% in FY 2021-22. However, with the addition of Policy/Admn measures the target for FY 2021-22 would be Rs. 5,829 billion, which is near to IMF suggestion i.e. requiring a growth of about 24.0%.
Table 6: Revenue Projections for FY 2021-22
(Rs. Billion)
Base Growth Assumptions Buoyancy Estimates Autonomous growth
Sectors % %
DT (GDPN *
GDP (Nominal) 13.22 DT 1.13 DTBuoy) 14.89
ST(D) (LSMN *
LSM(Nominal) 14.70 ST D 1.11 STDBuoy) 16.31
STM (Imports *
Total Imports 12.00 STM 0.92 STMBuoy) 11.03
CD (Imports *
Inflation 8.20 Customs 0.90 10.85
CDBuoy)
FED (LSMN *
GDP (Real) 5.02 FED 0.77 11.30
FEDBuoy)
LSM (Real) 6.50
DT ST(D) ST(I) CD FED Total
Expected Base
1,789 934 1,002 700 275 4,700
Figures 2020-21
Projection (2021-22)
with Autonomous 266 152 111 76 31 636
Growth
FBR Projections 2,055 1,086 1,113 776 306 5,336
without measures FY ST 2,199 Req.
13.5
2021-22 (total) Growth
(*) This excludes Policy/Admn Measures and consists of projection due to autonomous growth
Concluding Remarks
It has been found that the overall FBR taxes are buoyant (1.04 overall buoyancy) and there is a potential for increase in tax revenues provided that macroeconomic indicators are doing well. It is evident from last 20 years data that FBR revenues increased substantially with around 14% average growth. The head-wise break-up reveals that the direct taxes are most buoyant with I.13 buoyancy value, followed by sales tax (domestic) with 1.11 buoyancy estimates. On the other hand, sales tax (imports), customs and FED have relatively lesser buoyancies. In this regard, addressing the issues of narrow base, unnecessary exemptions and valuation problems at import stage can be instrumental for making these tax heads more buoyant, thus enabling the revenue organization to fetch more tax revenues.
The revenue forecast for FY 2021-22 by applying the buoyancy estimates and projected respective macroeconomic indicators would be Rs.5,336 billion without Policy/Admn measures. After adding Policy/Admn measures the target would be Rs.5,829 billion. However the revenue collection and achieving of target would largely depend on the performance of the economy against the targets.
====================================================================================================================
Annex-I
====================================================================================================================
Net Tax collection 2000-01 to 2019-20 (Rs. Million)
====================================================================================================================
S.No FY Direct Taxes ST Imports ST Dom FED Customs Total
====================================================================================================================
1 2000-01 124,585 88,554 65,011 49,080 65,047 392,277
2 2001-02 142,505 92,779 73,782 47,186 47,818 404,070
3 2002-03 151,898 105,605 89,534 44,754 68,836 460,627
4 2003-04 165,079 125,875 93,292 45,552 91,045 520,843
5 2004-05 183,372 144,845 93,692 53,104 115,374 590,387
6 2005-06 224,988 171,445 123,353 55,272 138,384 713,442
7 2006-07 333,737 175,909 133,487 71,804 132,299 847,236
8 2007-08 387,861 196,034 181,396 92,137 150,663 1,008,091
9 2008-09 443,548 203,715 248,029 117,455 148,403 1,161,150
10 2009-10 525,977 247,246 269,102 124,784 160,273 1,327,382
11 2010-11 602,451 308,648 324,709 137,353 184,853 1,558,014
12 2011-12 738,424 430,399 374,500 122,464 216,906 1,882,693
13 2012-13 743,409 429,831 412,697 120,964 239,459 1,946,360
14 2013-14 877,255 495,330 501,052 138,084 242,811 2,254,532
15 2014-15 1,033,720 553,028 534,762 162,248 306,220 2,589,978
16 2015-16 1,217,474 678,313 624,058 188,055 404,572 3,112,472
17 2016-17 1,344,226 702,565 626,400 197,911 496,772 3,367,874
18 2017-18 1,536,583 824,219 661,087 213,493 608,373 3,843,755
19 2018-19 1,445,508 810,357 648,856 238,186 685,575 3,828,482
20 2019-20 1,523,064 876,333 720,471 250,470 626,378 3,997,408
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Annex-II
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Tax Bases Data (Rs. Million)
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S.No FY GDP (Gross
Value Addition) GDP-non agri LSM Imports Dutiable
Imports
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1 2000-01 3,923,244 2,977,943 410,879 627,000 386,597
2 2001-02 4,146,167 3,177,876 424,089 634,630 404,641
3 2002-03 4,534,218 3,474,902 481,374 714,372 436,316
4 2003-04 5,250,527 4,085,776 621,899 897,825 629,159
5 2004-05 6,122,568 4,808,334 814,657 1,223,079 869,815
6 2005-06 7,715,777 5,701,305 1,003,062 1,711,158 1,052,837
7 2006-07 8,735,766 6,549,859 1,149,573 1,851,136 1,010,603
8 2007-08 10,355,255 7,961,728 1,363,068 2,512,072 1,283,696
9 2008-09 12,542,265 9,543,644 1,427,213 2,723,570 1,337,629
10 2009-10 14,248,547 12,787,274 1,644,117 2,910,975 1,333,709
11 2010-11 17,647,553 13,054,833 2,144,831 3,455,286 1,521,329
12 2011-12 19,361,511 14,608,436 2,362,410 4,009,093 1,600,186
13 2012-13 21,496,680 16,161,704 2,519,037 4,349,880 1,652,823
14 2013-14 24,028,897 18,052,680 2,824,463 4,634,974 1,778,444
15 2014-15 26,089,690 19,553,568 2,853,222 4,719,399 2,703,371
16 2015-16 27,402,295 20,652,329 2,801,169 4,721,978 3,467,318
17 2016-17 29,977,559 22,659,094 3,044,603 5,583,637 4,067,138
18 2017-18 32,383,021 24,471,242 3,331,363 6,749,678 4,662,323
19 2018-19 35,783,281 27,413,644 3,722,943 7,499,468 5,054,709
20 2019-20 38,878,480 29,409,085 3,712,779 7,057,323 4,455,140
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Annex-III
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Log Values
Tax collection Tax bases
GDP-
GDP non Total Dutiable
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S.No FY DT STM STD FED CD TOTAL (GVA) agr LSM Imports Imports
1 2000-01 11.7 11.4 11.1 10.8 11.1 12.9 15.2 14.9 12.9 13.3 12.9
2 2001-02 11.9 11.4 11.2 10.8 10.8 12.9 15.2 15.0 13.0 13.4 12.9
3 2002-03 11.9 11.6 11.4 10.7 11.1 13.0 15.3 15.1 13.1 13.5 13.0
4 2003-04 12.0 11.7 11.4 10.7 11.4 13.2 15.5 15.2 13.3 13.7 13.4
5 2004-05 12.1 11.9 11.4 10.9 11.7 13.3 15.6 15.4 13.6 14.0 13.7
6 2005-06 12.3 12.1 11.7 10.9 11.8 13.5 15.9 15.6 13.8 14.4 13.9
7 2006-07 12.7 12.1 11.8 11.2 11.8 13.6 16.0 15.7 14.0 14.4 13.8
8 2007-08 12.9 12.2 12.1 11.4 11.9 13.8 16.2 15.9 14.1 14.7 14.1
9 2008-09 13.0 12.2 12.4 11.7 11.9 14.0 16.3 16.1 14.2 14.8 14.1
10 2009-10 13.2 12.4 12.5 11.7 12.0 14.1 16.5 16.4 14.3 14.9 14.1
11 2010-11 13.3 12.6 12.7 11.8 12.1 14.3 16.7 16.4 14.6 15.1 14.2
12 2011-12 13.5 13.0 12.8 11.7 12.3 14.4 16.8 16.5 14.7 15.2 14.3
13 2012-13 13.5 13.0 12.9 11.7 12.4 14.5 16.9 16.6 14.7 15.3 14.3
14 2013-14 13.7 13.1 13.1 11.8 12.4 14.6 17.0 16.7 14.9 15.3 14.4
15 2014-15 13.8 13.2 13.2 12.0 12.6 14.8 17.1 16.8 14.9 15.4 14.8
16 2015-16 14.0 13.4 13.3 12.1 12.9 15.0 17.1 16.8 14.8 15.4 15.1
17 2016-17 14.1 13.5 13.3 12.2 13.1 15.0 17.2 16.9 14.9 15.5 15.2
18 2017-18 14.2 13.6 13.4 12.3 13.3 15.2 17.3 17.0 15.0 15.7 15.4
19 2018-19 14.2 13.6 13.4 12.4 13.4 15.2 17.4 17.1 15.1 15.8 15.4
20 2019-20 14.2 13.7 13.5 12.4 13.3 15.2 17.5 17.2 15.1 15.8 15.3
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Buoyancy Estimates based on 20 years data
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DT STM STD FED CD TOTAL
1.13 0.92 1.11 0.77 0.90 1.04
Copyright Business Recorder, 2021
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