After passage of GST Bill: FBR to stop issuing special exemption orders

The Federal Board of Revenue will discontinue practice of issuing sales tax special exemption orders, customs exemptions orders and special federal excise exemption orders after passage of General Sales Tax Bill 2010 by the Parliament. Sources told Business Recorder here on Tuesday that presently FBR is legally empowered to issue special exemption orders for sales tax, customs duty and federal excise duty.
The practice is to issue special exemption orders after obtaining approval of the Ministry of Finance in genuine cases. The special exemptions have been granted on case to case basis. However, the FBR has handed over its powers to the Parliament in this regard. Under the revised GST, the discretionary powers of the tax officials to grant special exemption orders would be ended under the RGST.
According to sources, the GST Bill 2010 would only authorise the Parliament to grant sales tax exemption or enhance tax rate through amendment in the First Schedule (Exemption Schedule) of the Bill. Therefore, the FBR would not be empowered to grant sales tax exemption through a notification, order or SRO.
This is a major change in the existing Sales Tax Act, 1990 and General Sales Tax Bill 2010 which has drastically curtailed the powers of the tax authorities for granting exemptions. Sources said that the board wanted to surrender its powers to issue exemption orders and SROs pertaining to exemptions and concessions to the Parliament under the proposed GST bill 2010.