The Federal Board of Revenue has disallowed sales tax adjustment on building materials - cement, bricks, furniture, electrical/gas appliances, wire/cables and other items. In this regard, the FBR has amended SRO.490(I)/2004 through an SRO.450(I)/2013 issued here on Thursday.
According to the notification, input tax adjustment is not allowed on building materials - cement, bricks, paints, varnishes, distempers etc; office equipment and machines (exuding electronic fiscal cash registers), furniture, structure, fixture and furnishings excluding those directly used in taxable activity; electrical and gas appliances, pipes, fittings excluding those directly used in taxable activity; wires, cables, ordinary electrical fittings and sanitary fittings, excluding those directly used in taxable activity and crockery, cutlery, utensils etc, excluding those directly used in taxable activity.
Sources said that the FBR has amended S.R.O. 490(I)/2004 which has specified goods, acquired otherwise than as stock in trade, by a registered person, to be the goods in respect of which input tax shall not be claimed including vehicles falling in chapter 87 of the First Schedule to the Customs Act, 1969; food, beverages, garments, fabrics, etcetera and consumption on entertainment and gifts and give-aways. The term "stock in trade" shall mean goods purchased by a registered person in the course of business for sale as such or after further processing or manufacture.
The list of the restricted items under SRO.490(I)/2004 has been expanded to generate additional revenue, sources added. Following is the text of the notification issued here on Thursday: SRO.450(I)/2013:- In exercise of the powers conferred by clause (b) of sub-section (1) of section 8 of the Sales Tax Act, 1990, the Federal Government is pleased to direct that the following further amendment shall be made in its Notification No SRO.490(I)/2004 dated the 12th June, 2004, namely:-
In the aforesaid notification, in clause (c), the word "and" shall be omitted; and in clause (d), for the full stop at the end, a semicolon and word ";and" shall be substituted and thereafter the following shall be added, namely:- "(e) building materials including cement, bricks, paints, varnishes, distempers etc,;
(f) office equipment and machines (exuding electronic fiscal cash registers), furniture, structure, fixture and furnishings excluding those directly used in taxable activity; Electrical and gas appliances, pipes, fittings excluding those directly used in taxable activity; Wires, cables, ordinary electrical fittings and sanitary fittings, excluding those directly used in taxable activity; and Crockery, cutlery, utensils etc, excluding those directly used in taxable activity."
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