Karachi: The Federal Board of Revenue (FBR) has temporarily withdrawn the implementation of 5% sales tax for zero-rated sectors and commercial importers while restoring the 4-6% tax rate.
According to Alfalah Securities, the implementation of uniform 5% sales tax has been withdrawn and a decision would be made in accordance with the consensus developed between business communities and the government. The imposition of 5% sales tax according to the SRO.1012(I)/2011 had created a confusion for the customs department who levied sales tax on the value addition of goods and as a result of which many consignments have been stopped on the Karachi port. FBR in order to cope up with the situation has agreed to restore the previous sales tax regime for five export sectors which includes textile, leather, carpets, sports and surgical instruments at 4% and 6%. The decision of temporarily withdrawing the 5% sales tax rate would enable these export oriented sectors to procure imports at a lower cost and would also enable them to become price competitive in the international market.