Equipment for grain handling & storage facilities: five percent ST imposed on items imported by seven sectors

The government has imposed 5 percent sales tax on a number of items imported by seven sectors under SRO.575(I)/2006, including machinery and equipment used for development of grain handling and storage facilities. Budget documents released here on Tuesday revealed transposition of SRO 575(I)/2006 to schedules with certain changes.
In accordance with the policy of reviewing SROs, it is proposed to charge following seven sectors ie Sr. No. 2, 3, 4, 9, 15, 20 and 30 of SRO at reduced rate of 5% sales tax. The concessions for the socially sensitive sectors shall be retained. However, the concessions against S. No. 8, 16, 17, 24, 25, 32, 33, 37 and 38 shall be withdrawn.
It is a composite SRO extending customs duty and sales tax concessions to various sectors on import of plant and machinery. In accordance with the policy of reviewing SROs, it is proposed to charge following seven sectors (Sr.No.2, 3, 4, 9, 15, 20 and 30) of SRO at reduced rate of 5% sales tax.
The reduced rate of 5 percent sales tax would be applicable on the machinery and equipment for development of grain handling and storage facilities; cool chain machinery and equipment; items imported by call centers, business processing outsourcing facilities duly approved by telecommunication authority; machinery, equipment, materials, capital goods, specialised vehicles, accessories, spares, chemicals and consumables meant for mineral exploration phase and construction machinery, etc for exploration phase; complete plants for relocated industries; machinery, equipment and other capital goods meant for initial installation, balancing, modernisation, replacement or expansion of oil refining petrochemical and petrochemical downstream products including fibers and heavy chemical industry, cryogenic facility for ethylene storage and handling; proprietary formwork system for building/structures of a height of 100ft and above.
The FBR has revisited SRO 1125(I)/2011 and it is proposed to amend the said SRO to provide for charging of sales tax at the standard rate of 17% on the import of finished articles of leather and textile. The decision has enforced through amendment in the notification, effective from 01.07.2014.
Inputs of five export oriented sectors ie leather, textiles, carpets, surgical and sports goods are chargeable to sales tax at the rate of 2% while finished articles of leather and textiles are chargeable to sales tax at the rate of 5%. Imports of finished articles of textiles ready for use by the general public like readymade garments, shoes etc are also chargeable to sales tax at the rate of 5%. It is proposed to amend SRO 1125(1)/2011 dated 31.12.2011 to provide for charging of sales tax at the standard rate of 17% on the import of finished articles of leather and textiles, as the measure will provide a boost to the local industry.
Through Finance Bill (2014-15), the government has rationalised sales tax on steel sector, ship breakers and steel melters operating in the sugar mills. The decision has been enforced through amendment in the Sales Tax Special Procedure Rules, 2007, effective from 01.07.2014.
The government has restricted undue claims of input tax. Input tax adjustment is proposed to be restricted only to the extent of goods and services actually used in manufacturing/sales of the taxable activity which has been enforced through Finance Bill, 2014, effective from 01.07.2014.
An electronic scrutiny and intimations system has been introduced aimed at conducting all checks and analysis objectively and will issue electronic intimations to the taxpayers, which is being enforced through Finance Bill, 2014, effective from 01.07.2014. The government has replaced capacity tax on aerated waters. The capacity regime has led to excessive litigation and the Lahore High Court has passed order against the scheme. Therefore, the existing scheme shall be reverted to the normal tax regime, which has been enforced through rescission of the Federal Excise Duty and Sales Tax on Production Capacity (Aerated Waters) Rules, 2013, effective from 01.07.2014.
The government has proposed to enhance the rates of Federal Excise Duty on cigarettes which will be enforced through Finance Bill, 2014, effective from 01.07.2014. The government has replaced Federal Excise Duty on the cement sector on specific basis (Rs 400 per MT) to 5% on retail price which has been enforced through Finance Bill, 2014, effective from 01.07.2014. The government has enhanced Federal Excise Duty on international travel which has been enforced through Finance Bill, 2014, effective from 01.07.2014.
The government has levied Federal Excise Duty on chartered flights to be levied at the standard rate on full amount charged which has been enforced through Finance Bill, 2014, effective from 01.07.2014. The government has excluded further tax charged @ 1% on supplies made to unregistered persons from the purview of output tax the decision has been enforced through Finance Bill, 2014, effective from 01.07.2014.
The government has brought certain changes in transposition of SRO 575(I)/2006 to schedules. In accordance with the policy of reviewing SROs, it is proposed to charge following seven sectors ie Sr. No. 2, 3, 4, 9, 15, 20 and 30 of SRO at reduced rate of 5% sales tax. The concessions for the socially sensitive sectors shall be retained. However, the concessions against S. No. 8, 16, 17, 24, 25, 32, 33, 37 and 38 shall be withdrawn, enforced through Finance Bill, 2014, and rescission of the notification, effective from 01.07.2014.
The FBR has transposed SRO 727(I)/2011 to Schedule with 5% rate of sales tax. This notification grants exemption on import and supply of plant and machinery not manufactured locally subject to certain conditions. It is proposed to charge sales tax at reduced rate of 5% on such plant and machinery, subject to the same conditions, by transferring the notification to the relevant Schedule of the Sales Tax Act, 1990. The decision has been enforced through Finance Bill, 2014, and rescission of the notification, effective from 01.07.2014.
The FBR has transposed SRO 549(I)/2008, dated11.06.2008 to Fifth Schedule. This notification grants zero-rating on certain goods, including petroleum crude oil, certain raw materials for export oriented sectors, etc. Since this zero-rating is considered essential, while the notification is required to be deleted, it is proposed to transfer the items in the notification to the Fifth Schedule of the Sales Tax Act, 1990. The decision has been enforced through Finance Bill, 2014, and rescission of the notification, effective from 01.07.2014.
The FBR has transposed SRO 551(I)/2008, dated 11.06.2008 to Schedules with certain changes. This notification grants exemption to a number of goods such as raw material for pharmaceutical industry, iodised salt,medical equipment, components of energy saver lamps, renewable energy items, raw cotton and oil seeds for sowing etc. It is proposed to continue the exemption on certain items ie at S. No. 3, 4, 5, 7, 11, 13, 14, 16 and 29 of this SRO by transferring them to the Sixth Schedule of the Sales Tax Act, 1990. Re meltable scrap (S. No. 31) is proposed to be deleted while oilseed for sowing, and raw and ginned cotton (S. No. 10 and 33) are proposed to be charged to reduced rate of sales tax @ 5% by transferring them to the relevant Schedule of the Sales Tax Act, 1990. However, local supply of raw and ginned cotton shall remain exempt by transferring to the Sixth Schedule. The decision has been enforced through Finance Bill, 2014, and rescission of the notification, effective from 01.07.2014.
The FBR has transposed SRO 501(I)/2013, dated 12.06.2013 to Schedules with certain changes. This notification grants exemption to certain goods. It is proposed to charge sales tax at reduced rate of 5% on soyabean meal, oil cake and directly reduced iron (S. No. 15, 16 and 21) by transferring them to the relevant Schedule of the Sales Tax Act, 1990. Purpose built taxis (S. No. 25) is proposed to be deleted, being redundant. Exemption on socially sensitive goods, such as wheelchairs and energy saver lamps, is proposed to be retained by transferring them to the Sixth Schedule to the Sales Tax Act, 1990. The decision has been enforced through Finance Bill, 2014, and rescission of the notification, effective from 01.07.2014.
The FBR has rescinded SRO 69(I)/2006, dated 28.01.2006. This notification grants reduced rate of sales tax 14% to rapeseed, sunflower seed and canola seed. It is proposed to rescind the said notification, thereby charging standard rate of sales tax (17%) on these seeds. Enforced through rescission of the notification, effective from 01.07.2014.
The FBR has transposed zero-rating facility for dairy and stationery industry and input materials of these industries. The facility of zero-rating has already been provided under SRO 670(I)/2013, dated 18.07.2013. The facility is retained and the same is proposed to be incorporated in the Fifth Schedule. The decision has been enforced through Finance Bill, 2014, and rescission of the notification, effective from 01.07.2014.
The government has withdrawn FED @ 10% on motor vehicles exceeding 1800cc. FED @ 10% was imposed on motor cars, Sports Utility Vehicles (SUVs) and other motor cars exceeding 1800cc through Finance Act, 2013. Increase in the prices have adversely affected sales resulting in decline in revenue besides hurting the local industry. Therefore, it is proposed to withdraw FED on locally manufactured motor vehicles exceeding 1800cc. The decision has been enforced through Finance Bill, 2014, effective from 01.07.2014.
The government proposed to grant exemption to high efficiency irrigation equipment and greenhouse farming equipment in order to promote agriculture, which will be enforced through Finance Bill, 2014, effective from 01.07.2014.
The government has reduced the rate of sales tax on local supply of tractors is being proposed in order to promote farm mechanisation, which will be enforced through amendment in the notification, effective from 01.07.2014. The government has exempted from sales tax to import and supply of "Cochlear Implants System" (Hearing Aids) is being introduced to facilitate the handicapped, which will be enforced through Finance Bill, 2014, effective from 01.07.2014.
The government has reduced the rate of Federal Excise Duty on Telecommunication Services in view of increase in the scope of telecommunication services with the advent of 3G and 4G technologies, which will be enforced through Finance Bill, 2014, effective from 01.07.2014.
The government has exempted import of plant, machinery and equipment for Gilgit- Baltistan, Balochistan Province and Malakand Division and FATA it is being proposed to promote industrialisation, job creation and economic uplift of the less developed regions, which will be enforced through Finance Bill, 2014, effective from 01.07.2014. The government has amended clause (d) of section 4 of the Sales Tax Act, 1990 is being proposed to give effect to the current scheme of law and to suitably align it with the existing scheme, which will be enforced through Finance Bill, 2014, effective from 01.07.2014.
The government has introduced specific rates of sales tax on mobile phones to protect the revenue and strengthen the legal support for charging of sales tax, which will be enforced through Finance Bill, 2014, effective from 01.07.2014. The government has inserted an explanation in section 40B for its independent operation vis-à-vis provisions of section 40 whereunder search warrants are required from the Magistrate, which will be enforced through Finance Bill, 2014, effective from 01.07.2014.
The government has exempted Ordinance, 2014, sub-section (8) of section 3 and section 3B of the Sales Tax Act, 1990 were substituted. It is being proposed to get approval of the Parliament to the changes made through the President Ordinance, which will be enforced through Finance Bill, 2014, effective from 01.07.2014.
The government has proposed uniform treatment of crude palm oil so that exemption of sales tax and charging Federal Excise Duty is being done as in case of other edible oils, which will be enforced through Finance Bill, 2014, effective from 01.07.2014.
30. Provision for specifying zones for the purpose of charging sales tax and Federal Excise Duty on the basis of prices in respective zones, enforced through Finance Bill, 2014, effective from 01.07.2014.
31. Exclusion of Federal Excise Duty on Telecommunication Services subject to Provincial Sales Tax is being proposed. Enforced through Finance Bill, 2014, effective from 01.07.2014.