ISLAMABAD: The Engineering Development Board (EDB) has proposed imposition of Sales Tax at the standard rate of 17 percent on retail sales and commercial imports of automotive spare parts.
In its budget proposals which the Federal Board of Revenue (FBR) has received, the EDB advocated levy of sales tax on spare parts at retail stage.
The board is of the view that the Original Equipment Manufacturers (OEMs) supply parts to their authorised dealers for onward supply to after sale market and pay sales tax on the import of spare parts whereas the commercial importers pay sales tax at a much lower rate of two percent.
It proposes that the retail sellers and commercial importers of automotive spare parts may also be subjected to sales tax at the standard rate 17 percent like the OEMs.
The EBD proposed that the authorised dealers of automotive vehicles operating on behalf of OEMs were registered for sales tax purpose, whereas other dealers engaged in sale and purchase of new and used vehicles, whether locally manufactured or imported, were out of the ambit of sales tax.
Following amendment is proposed in Rule 45 of Chapter-VIII of Sales Tax Special Procedure Rules to bring such dealers in the tax net:
The EDB points out that all vehicles and spare parts dealers should be registered under the Act who are engaged or otherwise deal in sale of locally manufactured and all types of imported vehicles and spare parts, whether new or old / used, on the basis of commission or otherwise.
