FBR asks officials to ensure collection on revised rates

Sales tax, federal excise duty 

KARACHI: The Federal Board of Revenue (FBR) has directed the tax officials to ensure the collection of revised sales tax and federal excise duty from the effective dates to avert the revenue losses, a document said.

The FBR, through a circular to the chief commissioners of Inland Revenue and the chief collectors of the Pakistan Customs this week, said FED on cigarettes has been increased effective from June 6, while revised rates of FED on cement and aerated waters and sales tax on sugar, tractors, pesticides, urea fertiliser and mobile phones were effective from June 25.

Tax officials at Regional Tax Office, Karachi said the order was issued, considering problems faced by the customs authorities and offices of Inland Revenue regarding effective date of implementing the revised rates of sales tax and FED.

They said after the instructions the field offices would recover tax, if not collected, from the date of imposition.

The FBR said the changes, introduced through the Finance Act, 2016, are related to input claim on deduction of sales tax on supplies.

The board said input claims will only be available through the online system-verified invoices from July 1.

Therefore, the tax authority added that the departments should ensure that the taxpayers claiming input should upload their invoices to the FBR’s online system and their suppliers should deposit the required amount.

The FBR said zero-rating of sales tax on sale and imports of stationary items and milk has been abolished and the government allowed exemption on such items.

“Therefore, certificates issued by the Inland Revenue for availing zero-rating beyond July 1 have become null and void,” it added.

The FBR said sales tax rate on local manufacturing and import of mobile has been increased from June 25.

FED on sugar has been replaced with the sales tax at eight percent.

The FBR announced minimum price of sugar at Rs56/kilogram and $725/metric ton for import for the purpose of charging eight percent sales tax. 

The FBR asked the tax department to charge further tax and ensure payment of sales tax from traders.

For the fiscal year of 2016/17, the sales tax rate on marble industry has been revised.

The FBR linked it with electricity consumption.

The Federal Board of Revenue directed large taxpayers units and regional tax offices to prepare the lists of such marble and granite manufacturing units in coordination with respective association and forums, and share the lists with the respective electricity distribution companies for charging and payment of the tax, which is not adjustable.