Tax Laws (2nd amendments) Ordinance 2019: FBR spokesman says amendments aimed at removing anomalies

ISLAMABAD: The government has withdrawn sales tax exemption on local supplies of edible oil and vegetable ghee, frozen prepared or preserved sausages and similar products of poultry meat or meat offal and fish sold in retail packing under brand name.

The president promulgated Tax Laws (Second amendments) Ordinance 2019 and withdrew sales tax exemption on certain branded food items.

When contacted, FBR’s Member Inland Revenue and official spokesman Dr Hamid Ateeq Sarwar on Thursday said that these amendments were done to remove anomalies that had come on the surface in the aftermath of the last budget for 2019-20. The FBR had explained about anomalies through circulars but litigations were underway at different judicial forums so the FBR inserted it into part of law in order to make taxation things crystal clear.

The Tax Laws (Second Amendment) Ordinance 2019 withdrew sales tax exemption on local supplies of edible oils and vegetable ghee, including cooking oil made by importers, distributors, wholesalers or retailers.

The government has amended the Sixth Schedule (Exemption Schedule) of the Sales Tax Act through Presidential Ordinance.

Earlier, the sales tax exemption was available on edible oils and vegetable ghee, including cooking oil, on which Federal Excise Duty is charged, levied and collected by a registered manufacturer or importer as if it were a tax payable under section 3 of the Sales Tax Act.

The exemption of this entry shall not be available to distributors, wholesalers or retailers. In the aftermath of amendment done in the Sixth Schedule of the Sales Tax Act, the sales tax exemption shall not be available on local supplies made by importers to distributors, wholesalers or retailers.

Tax Laws (Second Amendment) Ordinance 2019 also withdrew sales tax exemption on frozen prepared or preserved sausages and similar products of poultry meat or meat offal sold in retail packing under brand name.

Under the amended Sixth Schedule (Exemption Schedule), sales tax exemption has also been withdrawn on meat and similar products of prepared frozen or preserved meat or meat offal of all types including poultry, meat and fish sold in retail packing under brand name.