The Federal Board of Revenue (FBR) has imposed standard rate of 17 percent sales tax on certain ingredients of poultry feed ie Palm Kernel Cake, Lintel Husk and Distillers Dried Grains with Soluble. In this regard, the FBR has issued a clarification regarding sales tax on poultry feed ingredients here on Wednesday to the Model Customs Collectorates (MCCs).
Sources said that through a FBR clarification, benefit of reduced rate of sales tax was available to the ingredients of poultry feed ie Palm Kernel Cake, PCT Heading 2306.6000; Lintel Husk, PCT Heading 1213.0000 and Distillers Dried Grains with Soluble, PCT Heading 2303.3000. Now, the FBR's clarification dated 30th September, 2015 that benefit of reduced rate of sales tax is available to Palm Kernel Cake (PCT heading 2306.6000), Lintel Husk (PCT heading 1213.0000) and Distillers Dried Grains with Soluble (PCT heading 2303.3000) has been withdrawn. Therefore, these ingredients along-with other ingredients of poultry and cattle feed which are not listed in column (3) against S. No. 15 of Table-1 of Eighth Schedule to the Sales Tax Act, 1990 are chargeable to sales tax at the standard rate of 17 percent.
According to the FBR's instructions (Clarification regarding sales tax on poultry feed ingredients) to the MCCs, the Board vide letter C.No.1(107)STT/2000-134271-R, dated 30th September, 2015 addressed to Collector, MCC (Appraisement-West), Karachi had clarified that benefit of reduced rate of sales tax under S. No.15 of Table-1 of Eighth Schedule to the Sales Tax Act, 1990 was available to the following ingredients of poultry feed: Palm Kernel Cake, PCT
The FBR said that the issue has been re-examined and it is clarified that S. No. 15 of Table-1 of the Eighth Schedule to the Sales Tax Act, 1990 was transposed from S. No. 28 of Table-1 of the Sixth Schedule to the Sales Tax Act, 1990. Under the said S. No. 28, poultry feed and cattle feed including all their ingredients except soybean meal (2304.0000) and oil cakes of cotton seed (2306.1000) were exempt from sales tax. In column (3) of Table-1 to the Sixth Schedule to the Sales Tax Act, 1990 some 17 PCT headings with respect to ingredients of poultry feed/cattle feed were mentioned. However, as per Note-I, after Table-2 of the Sixth Schedule, it has been mentioned that exemption shall be available on the basis of goods as mentioned in column (2) and that PCT classification of headings is provided for ease of reference meaning thereby that all the ingredients of poultry feed except soybean meal (PCT heading 2304.0000) and oil cake of cottonseed (PCT heading 2306.1000) were exempt from sales tax, irrespective of PCT headings, before omission of S. No. 28 of Table-1 of the Sixth Schedule to the Sales Tax Act, 1990.
Through Finance Act, 2015, exemption to poultry feed and cattle feed was provided at local supply stage only by partly transposing S. No. 28 of Table-1 of Sixth Schedule as S. No. 21 of Table-2 of the Sixth Schedule whereas reduced rate of sales tax was provided by transposing ingredients of poultry feed and cattle feed at S. No. 15 of Table-1 of Eighth Schedule to the Sales Tax Act, 1990. Eighth Schedule does not provide anything to the effect that benefit of reduced rate shall be available on the basis of goods description and that PCT classification of headings is provided for ease of reference meaning thereby that only those ingredients of poultry feed enjoy the benefit of reduced rate of sales tax where PCT alongwith description is mentioned in column (3) of Table-1 of Eighth Schedule to the Sales Tax Act, 1990, FBR said.
It may be noted that neither the ingredients mentioned above nor their PCT headings are listed in column (3) against S. No. 15 of Table-1 of Eighth Schedule to the Sales Tax Act, 1990. In view thereof, clarification dated 30th September, 2015 that benefit of reduced rate of sales tax within the meanings of S. No. 15 of Table-1 of Eighth Schedule to the Sales Tax Act, 1990 is available to Palm Kernel Cake (PCT heading 2306.6000), Lintel Husk (PCT heading 1213.0000) and Distillers Dried Grains with Soluble (PCT heading 2303.3000) is hereby withdrawn, FBR ordered.
It is further clarified that these ingredients alongwith other ingredients of poultry and cattle feed which are not listed in column (3) against S. No. 15 of Table-1 of Eighth Schedule to the Sales Tax Act, 1990 are chargeable to sales tax at the standard rate of 17%, FBR added.
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