Sales tax enhanced to 9pc on import, domestic supply of finished fabric

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ISLAMABAD: The sales tax rates on import of finished fabric and domestic end consumers have been enhanced to nine percent from six percent. However, the commercial importers will pay two percent additional tax along with nine percent on clearance of finished fabric.
Sources in Federal Board of Revenue (FBR) told PkRevenue.com said that through Finance Act, 2018 amendment had been made in SRO 1125(I)/2011 dated December 31, 2011 through SRO 777(I)/2018 dated June 21, 2018.
The sources said that the rate of sales tax on locally manufactured of finished textile articles and made-ups, which also included carpets and leather and artificial leather, has also been enhanced to nine percent from six percent.
The sales tax at the rate of six percent along with two percent was available on import of finished goods of textile and leather sector ready to use for general public provided under SRO 1070(I)/2017 dated October 23, 2017 which was an amending SRO 1125(I)/2011, has been enhanced to nine percent along with two percent value addition tax already attracted. This rate has also been extended to finished goods of artificial leather along with leather.
However, the FBR has clarified that description and Pakistan Customs Tariff (PCT) heading of finished goods of leather and artificial leather have also been provided through insertion of Table in SRO 77(I)/2018 dated June 21, 2018. Further the rate of sales tax on supply of such imported finished goods has also been levied at nine percent.
The sources said that the major changes brought in the SRO 1125(I)/2011 under which input tax credit or refund on packing material is now admissible for export sector falling under the SRO 1125(I)/2011.

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