KARACHI: The Federal government through amendments in SRO 1125(I)/2011 has notified revised rate of sales tax on import and supply of goods usable as industrial inputs as well as finished goods.
According to SRO 486(I)/2015, the zero rating of sales tax has been eliminated and the goods usable as industrial inputs imported for in-house consumption by registered manufacturers of the five sectors (textile including jute, carpets, leather, sports and surgical goods) shall be subject to sales tax at the rate of 3.0 percent while commercial imports of similar goods shall be subject to sales tax of 3.0 percent along with value addition tax of 1.0 percent.
Supplies of goods usable as industrial inputs to registered or unregistered persons of the five sectors including textile (including jute), carpets, leather, sports and surgical goods shall be subject to 3.0 percent sales tax while supplies of industrial inputs to persons outside of the said five sectors would be subject to 17 percent sales tax.
Import of fabric including grey fabric for in-house consumption by registered manufacturers of the five sectors will be subject to sales tax of 3.0 percent, commercial imports would attract 1.0 percent additional value addition tax while supplies of fabric including grey fabric would be subject to sales tax at the rate of 3.0 percent.
Moreover, processing of goods including fabrics owned by other persons, by registered manufacturers of the five sectors would attract sales tax at the rate of 3.0 percent of the processing charges.
Supplies of locally manufactured finished articles of textiles and textile made-ups; leather and artificial leather to any person including retail sales would attract sales tax at the rate of 5.0 percent.
Import of finished goods ready to use by general public would be subject to sales tax of 17 percent plus 2.0 percent value addition tax and supply thereof would also attract 17 percent sales tax.