The Federal Board of Revenue (FBR) has issued sales tax notifications to implement budgetary measures for 2017-18 including one percent further sales tax on supplies made to unregistered persons within the five export-oriented sectors under SRO 1125(1)/2011. The FBR has issued SRO 584(1)/2017 here on Saturday to amend SRO 1125(1)/2011.
The reduced rate of 5 per cent sales tax has been increased to 6 per cent under SRO 1125(1)/2011. Further tax at the rate of one per cent is introduced on supplies under SRO1125 except on finished good which will attract further tax at the rate of 2 percent. Reduced rate facility is withdrawn from imported finished fabrics.
In case the goods covered under this notification are supplied to a person who has not obtained registration number, further tax prescribed under sub-section (1A) of section 3 of the Act shall be charged at the rate of one per cent of the value whereas further tax at the rate specified in the said sub-section (1A) of section 3 shall be charged on supplies of finished articles under SRO 1125(1)/2011.
Under SRO 587(1)/2017, sales tax shall be charged on local supply of hybrid electric vehicles (HEVs) falling under the PCT heading 87.03 at the specified rates: In case of vehicles up to 1800cc, 50 percent of the rate specified in sub-section (1) of section 3 of the Sales Tax Act, 1990. In case of vehicles from1801cc to 2500cc, 75 percent of the rate is specified in sub-section (1) of section 3 of the Sales Tax Act, 1990.
As per SRO 589(1)/2017, services provided or rendered by marriage halls and lawns, by whatever name called, including "pandal" and "shamiana" services and caterers would be subjected to five percent sales tax within the Islamabad capital territory. This is subject to the condition that no input tax adjustment or refund shall be admissible. Under SRO 590(1)/2017, the FBR has exempted whole of sales tax on export of IT services and IT-enabled services.
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