The Federal Board of Revenue has allowed exemption from deduction of tax on import of plant and machinery used for setting up an industrial undertaking, including hotels. The board has also authorised commissioners of income tax to grant system-based exemption certificates to importers of plant, machinery, fixtures, fittings or their allied equipment used for setting up industrial units.
According to SRO No 1139(I)2008 issued on Tuesday, the board would extend exemption from deduction of tax on import of plant and machinery for setting up an industrial undertaking.
The exemption has been granted by the FBR through SRO1139(I)2008 whereby the board has amended section 148 of the Income Tax Ordinance 2001 to allow tax exemption on import of plant or machinery required to set up an industrial concern or for its installation in an existing industrial undertaking.
The board has allowed commissioners to grant system-based exemption certificates to importers of goods consisting of plant, machinery, fixtures, fittings or their allied equipment required for setting up industrial undertakings. The certificates would be instrumental in getting exemption of 2 percent withholding tax at the import stage.
Taxpayers will be required to provide information regarding the industrial undertaking and the intended imports of plant and machinery in a prescribed application form to enable the tax department to check misuse of such exemptions and further monitor use of such imported goods of capital nature. The step has been taken by the FBR with a view to facilitating the taxpayers who would now be able to save valuable money and contribute towards development of the economy.