ISLAMABAD: The Federal Board of Revenue has decided to rescind a Statuary Regulatory Order (SRO) to impose standard rate of 16 percent on zero-rated items such as dairy products and other goods liable to the facility at domestic stage before Budget (2013-14).
Sources told Business Recorder here on Thursday that the FBR will rescind the notification to withdraw sales tax zero-rating facility on different items before announcement of the coming budget. This will bring a number of zero-rated items within the sales tax regime before start of the new fiscal year (2013-14). Sources said that the FBR has compiled a list of items subjected to sales tax zero-rating on the domestic stage. The proposal is to withdraw sales tax zero-rating facility on all these items and impose standard rate of 16 percent sales tax on these zero-rated items.
There is a possibility that the FBR will delete most of the zero-rating items from the SRO549(I)/2008. SRO549(I)/ 2008 - the most important notification would be revised. This notification is related to the zero-rating on certain goods subject to certain condition. The zero-rated items included dairy products, stationary, exercise books, writing, drawing and marking ink, pens and pencil etc sewing machine household type, cotton seed, oil cake and other sold residues. Other items mentioned in the said notification included bicycles, wheel chairs, energy savers and constructions material for Gwadar Export Processing Zone (EPZ).
Expert said that the zero-rating is also available on plant, machinery and equipment (whether or not manufactured locally), including parts thereof and plant, machinery and equipment, whether locally manufactured or imported. Zero-rating is also applicable re-meltable scrap, dedicated CNG buses and all other buses meant for transportation of forty or more passengers whether in CBU or CKD condition, trucks and dumpers with g.v.w. exceeding 5 tonnes, bicycles, trailers and semi-trailers for the transport of goods having specifications duly approved by the Engineering Development Board and road tractors for semi-trailers, prime movers and road tractors for trailers whether in CBU condition or in kit form.
Zero-rating is also available on raw materials, components, sub-components and parts if purchased from authorised vendors by a recognised manufacturer of tractors for use in the manufacturing of such tractors under SRO549(I)/2008. Zero-rating is applicable on raw materials, components, sub-components and parts in case imported or purchased locally for use in the manufacturing of such plant and machinery as is chargeable to sales tax at the rate of zero percent.