Finance Bill 2016: NA body proposes seven key amendments

National Assembly Standing Committee on Finance has recommended seven key amendments in Finance Bill 2016 for changes in duties and taxes structure, tariff rationalisation and continuation of sales tax zero-rating regime for dairy sector to avoid increase in prices of packaged milk from Rs 6-8 per litre.
Sources told Business Recorder here on Sunday that the recommendations of National Assembly Standing Committee on Finance have been forwarded to Ministry of Finance and Federal Board of Revenue (FBR) for amendments in the Finance Bill 2016. The committee has also asked the Finance Ministry and FBR to submit the implementation status of the said recommendations.
The final recommendations of the National Assembly Standing Committee on Finance, pertaining to the tax rates, submitted to the Ministry of Finance are:
Firstly, sales tax zero-rating on dairy and milk products should be maintained.
Secondly, customs duty should be reduced on anomaly in fixation of customs duty slab on raw material, Phthalic Anhydride, HS Code 2917.3500 from 16 to 11 percent to give a level playing field.
Thirdly, a level playing field should be provided to the commercial importers and local manufacturers and there must be a reasonable differential of income tax between them so that the industries cannot misuse commercial entrepreneurs, who supply imported raw materials to industry, so that it could flourish.
Fourthly, sales tax should be exempted on agricultural machinery and implements.
Fifthly, rice export should be maintained on zero-rating and sales tax exemption should be provided on the import of machinery. The rice being second largest export sector has been badly hit for last two years. It will boost exports and agriculture sector,
Sixth, increase of excise duty (55 paisa per kg) on cement industry may be reviewed.
Seventh, educational stationary should continue to be zero-rated from sales tax under the Fifth Schedule of the Sales Tax Act 1990 and their inputs should be zero-rated from customs duty by placing the items in Chapter 99 of Pakistan Customs Tariff or, in the Fifth Schedule to the Customs Act.