ISLAMABAD: The Federal Board of Revenue (FBR) has exempted equipment imported for rail-based mass transit projects under the China Pakistan Economic Corridor (CPEC) from withholding tax.
The FBR, through SRO 44(I)/2017, exempted withholding tax on import of equipment to be furnished or installed for rail-based mass transit projects in Lahore, Karachi, Peshawar and Quetta under the CPEC.
The board said the decision was, “in pursuant of the Economic Coordination Committee’s approval on January 6.”
The rate of tax, under section 152 in the case of M/s CR-NORINCO JV (Chinese contractor) as recipient, on payments arising out of commercial contract agreement signed with the government of Punjab for installation of electrical and mechanical (E&M) equipment for construction of the Lahore Orange Line Metro Train Project, shall be 6 percent of the gross amount of payment. The provision of section 148 of the Income Tax Ordinance, 2001 shall not apply on import of equipment to be furnished or installed for rail-based mass transit projects in Lahore, Karachi, Peshawar and Quetta under the CPEC, the FBR added.
