June 21-27 period: government to exempt one percent increase in ST rate The government has decided to exempt one percent increase in sales tax rate from 16 to 17 percent during the period June 21-27, 2013 and implement new tax relief measures, tax reductions/concessions retrospectively from July 1, 2013. Sources told Business Recorder here on Tuesday that the assurance has been given by tax authorities of the Federal Board of Revenue to the representatives of the business community at Large Taxpayer Unit (LTU) Karachi. The recently announced tax relief measures were discussed in detail between the FBR officials and Karachi-based businessmen at LTU Karachi. According to sources, tax authorities have conveyed to the Karachi-based businessmen that the effective date for the implementation of these measures would be July 1, 2013. This is subject to the confirmation from vetting of Law and Justice Division. If the Law Division has no objection, the FBR will implement all these new tax concessions with effect from July 1, 2013. The senior officials of the FBR have also assured the business and trade that a statutory regulatory order (SRO) would be issued to exempt increase in sales tax from 21-27, 2013 in line with the orders of the Supreme Court. The rate of sales tax was increased from 16 to 17 percent in budget (2013-14). The FBR has agreed not to charge sales tax during the period of June 21-27, 2013 as desired by the business community. In this regard, the FBR has forwarded the notification to the Law and Justice Division for vetting. Following clearance from the Law and Justice Division, the SRO would be notified by the Board to allow sales tax exemption for one week period (June 21-27). Tax authorities have further informed that the all the relevant notifications have been send to the Law and Justice Division for vetting. These notifications are related to the recently announced decisions by the Ministry of Finance. During the meeting, FBR officials confirmed that rate of withholding sales tax on purchases from unregistered persons has been reduced from 17 to 1 percent, which will not be adjustable. Items added in the Third Schedule to the Sales Tax Act 1990 vide Finance Bill 2013 (except for Fertiliser and Cement) have been omitted from the Third Schedule and subjected to 2 per cent extra tax in lieu of sales tax at retail stage. The items chargeable to sales tax on retail prices have been exempted from sales tax withholding regime, rate of withholding for wholesalers, dealers (including petroleum dealers) and distributors is reduced from current level of one-fifth (ie 3.4 percent) to one-tenth (ie 1.7 percent) of the applicable rate of sales tax and commercial importers who are subject to withholding on income tax have been excluded from sales tax withholding regime. The restriction imposed under (x) of SRO 1125(I)/2011 dated 2011 on refunds against local supplies has been done away with to allow refunds (after pre-refund scrutiny) as admissible under the relevant law and rate of withholding tax on goods transport vehicles under Section 234 of the Income Tax Ordinance, 2001 is reduced from Rs 5 per kg of the laden weight to Rs 3 per kg, the condition of provision of Computerised National Identity Card Number (CNIC), National Tax Number (NTN) and addresses of retailers under section 236H to be provided in the withholding statement under Section 165 of the Income Tax Ordinance ,2001 is waived and sales tax on fabrics has been reduced from 5 to 3 percent.
Posted on: Wed, 25 Sep 2013 02:41:31 +0000