The Central Board of Revenue (CBR) will levy sales tax at the rate of zero-percent on electricity being consumed by manufacturers of textile products, leather items, carpets, sports goods and surgical instruments. The decision has been taken to reduce the cost of production, making the exports competitive in the international market.
In the first phase, the CBR has issued the names of 345 industrial units, which are entitled to zero-rating on the power consumption in the manufacture of goods, which were zero-rated, for five export-oriented sectors.
ACCORDING TO SRO 792(I)/2005 ISSUED ON WEDNESDAY: manufacturers have to fulfil certain conditions for availing zero-rated facility on the electricity consumption.
First, the electricity connection is in the name of the registered person and the bill issued by electricity provider contains the name and the sales tax registration number of such person.
Second, in case where the connection is not in the name of registered person; the registration number of the person is mentioned in the electricity bill along with the address of such person as given by him in his application for sales tax registration. Third, electricity is consumed only in the manufacture of goods specified in SRO.621 (I)/2005 of June 17, 2005.