FBR drafts concessionary rules for raw material import

KARACHI: The Federal Board of Revenue (FBR) on Thursday introduced rules for allowing concession on import of raw materials to facilitate genuine exporters and manufacturers.

The FBR notified SRO 615(I)/2020 to issue draft rules for granting concessions and exemption on import of raw material and capital goods to comply with amendment made through Finance Act 2020.

Through Finance Act 2020, an amendment was made to Income Tax Ordinance 2001 and a new Twelfth Schedule introduced to classify importers for grant of exemptions and concession.

Under the draft rules a taxpayer, who wants to avail tax relief, should provide tax authorities the site plan of the manufacturing unit indicating the location of the premises and the details of the total area, covered area and manufacturing area and separate storage areas for manufactured goods, factory rejects and wastages.

Further, the taxpayer should also provide inventory statement, consumption statement and input-output ratios of locally procured and imported goods for the last assessed tax year and the period starting on the first day after the last assessed tax year and ending on the day.

As per Finance Act 2020, the importers have been classified under Twelfth Schedule and the FBR would allow concession of one percent, two percent, and 5.5 percent on import of raw materials and capital goods.

As per the draft rules the importers have to apply for concession on imported raw materials. However, the FBR has the right to reject the concession in case of discovery of finished goods.