Sales tax collection on imports up 69pc in March

KARACHI: The collection of sales tax on imported goods surged 69 percent owing to a hefty March import bill, officials said.

The sources in the Large Taxpayers Office (LTO) Karachi said collection of sales tax at the import stage in March 2021 grew to Rs103 billion. That compared with Rs61 billion in the same month last year, when Covid-related lockdowns led to closure of economic activities.

The rise in collection under this head was mostly a result of accelerated economic activities during the past couple of months, which drove the demand for raw material and finished imported goods.

The import bill of March 2021 also increased correspondingly, swelling 60 percent to $5.31 billion in the month under review. That compared with $3.32 billion in the same month last year.

The collection of sales tax during the first nine months (July– March) of the current fiscal year increased 11 percent to Rs631 billion. That compared with Rs571 billion in the corresponding months of the last fiscal year.

The import bill of the country stood at $39.21 billion during the first nine months of the current fiscal year as compared with $34.82 billion in the same time of the last fiscal year, showing a growth of 12.6 percent.

The LTO Karachi, the major revenue collecting arm of the Federal Board of Revenue (FBR), has jurisdiction of reporting of sales tax on imported goods collected by customs stations located in Karachi.

The provisional figures show all the customs collectorate posted a significant increase in their revenue collection for the period.

The collection of sales tax by Port Qasim Collectorate increased to Rs279 billion during July–March 2020/2021 as compared with Rs252 billion in the corresponding months of the last fiscal year.

Similarly, the collection by Model Customs Collectorate (MCC) Appraisement (East) increased to Rs195 billion during the first nine months of the current fiscal year as compared with Rs177 billion in the corresponding months of the last fiscal year.

Likewise, the collection of MCC Appraisement West grew to Rs102 billion during the period under review as compared with Rs92 billion collected in the same period of the last fiscal year.