FBR revokes sales tax zero rating

KARACHI:  The Federal Board of Revenue (FBR) cancelled zero-rating of sales tax on consumption of electricity for the six textile units due to misuse of the facility, sources said on Saturday.

The sources in the Regional Tax Office (RTO) Karachi said some units were not found on their given address and others were supplying the tax-free electricity to other companies.

The RTO recommended the Federal Board of Revenue (FBR) to cancel the zero-rating facility of such textile units for various objections. 

The textile units, which were denied the facility, include Muhammad Dyeing and Bleaching, Dacca Silk Mills, Shahnoor Weavers, Sunbright Hosiery, Hassan Fabrics and M Yahya M. Yousaf Bari.

The FBR directed the RTO Karachi to coordinate with K-Electric regarding the implementation of normal sales tax of 17 percent. The tax department was also directed to recover amount from the units for misusing the facility.