The Federal Board of Revenue (FBR) has assured that general sales tax (GST) will not be levied on jewelers having shops smaller than 1,000 square feet and a notification in this regard will be issued during the next week.
The assurance was extended by FBR Senior Chief Sales Tax Officer Javed Memon to a 20-member delegation of the Punjab Sarafa Gems & Jewellery Association that called on him at his office the other day. The delegation apprised the senior officer about their hardships arising out of recent taxation policies of the FBR.
Association's Chairman Muhammad Ahmad informed the FBR officers that an effort was also made in 1998 to levy GST on this sector but it was foiled by them through an exemplary unity and protests. He said the then CBR officials had admitted the special status of this business and a fixed tax was levied in consultation with jewelers instead of GST.
According to Ahmad, it is not possible to levy GST on each sale or purchase as majority of the jewelers only offer services of designing or polishing. Mostly, he added, the gold is owned by the consumers while there are many stages of making ornaments. Most of the time people come to amend or redesign their old ornaments or just seek polishing services, he informed the FBR officers.
He further said that majority of the jewelers are not big businessmen, especially those sitting in small cities and villages. "We are ready to pay taxes but it is not possible for us to pay GST on each sale or purchase in light of the above mentioned reasons."
After listening to the grievances of the jewelers, the FBR officers set aside the proposal of levying GST on jewelers having shops smaller than 1,000 square feet and electricity bills below Rs 50,000 out of the GST regime. "By excluding such type of businessmen, the FBR officers have assured us that a new taxation policy will be devised in consultation with the Punjab Sarafa Gems & Jewellers Association and other stakeholders.
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