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March 3, 2021

Sales tax collection on imported goods rises 12 percent in Jul-Feb

Business

March 3, 2021

KARACHI: The collection of sales tax on imported goods posted a growth of 12 percent during the first eight months (July-February) 2020/2021 owing to surge in consignment clearance for consumption of imported goods in the domestic market, official data revealed on Tuesday.

According to the statistics of Large Taxpayers Office (LTO) Karachi, which has jurisdiction over reporting the collection of sales tax at import stage, its collection increased to Rs610 billion during July-February FY21, as compared with Rs546 billion in the corresponding months of last fiscal.

LTO Karachi sources said that the growth in sales tax collection at the import stage was due to an increase in volume of imported goods during the period. The higher import volume has been attributed to ease in coronavirus pandemic related restrictions that had increased the industrial and commercial activities in the country.

It is believed that domestic industrial demand for raw material would further increase the import bill in coming months as the government had started phasing out restrictions related to the pandemic.

All the customs collectorates located at the ports in Karachi collect the sales tax on imports on behalf of LTO Karachi.

The collectorate wise collection of sales tax on clearance of imported goods revealed that MCC Appraisement East and West reported growth of 22 percent and 45 percent, respectively.

The collection sales tax on imported goods by MCC Appraisement East surged to Rs188 billion during the eight months of the current fiscal year as compared with Rs154 billion in the corresponding months of the last fiscal year.

Similarly, the collection of sales tax at import stage by MCC Appraisement West increased to Rs101.4 billion during the period under review as compared with Rs70 billion in the same period of the last fiscal year.

However, MCC Port Qasim remained the major contributor with Rs267 billion as against Rs259 billion, showing a growth of 3 percent.

The collection of sales tax at import stage posted an increase of 13 percent in February 2021. The collection during the month increased to Rs82 billion as compared with Rs72.8 billion in the same month of the last year.

The LTO Karachi also collects Federal Excise Duty (FED) on import of goods. The FED collection registered growth of 71 percent to Rs9 billion during July – February 2020/2021 as compared with Rs5.29 billion in the corresponding period of the last fiscal year. The collection of FED was at Rs1.6 billion during February 2021 as compared with Rs552 million in the same month of the last year, showing an unprecedented growth of 194 percent.