Zero-rating facility for 2 units stopped

KARACHI: The Federal Board of Revenue (FBR) has stopped sales tax zero-rating allowed on electricity to two textile units for misusing the facility, sources at the Regional Tax Office (RTO) Karachi said on Wednesday.

The FBR stopped the zero-rating facility to textile units, including KBI Textile Mills and Texmat Industries Limited on the recommendation of RTO Karachi.

The government has allowed zero-rated sales tax on the supply of electricity and gas to textile units in order reduce the cost of production and make products compatible in the international markets. The chief commissioner of RTO has been directed to coordinate with K-Electric regarding implementation of normal sales tax on supply to both the units.

The FBR also directed the chief commission to submit report in respect of action taken against the unit for misusing the facility and recovery made against tax evasion.