ISLAMABAD: Federal Board of Revenue (FBR) has said that tax collected on import of plastic raw material would constitute minimum tax on income of an importer.
The FBR for explaining the important changes to Income Tax Ordinance, 2001 through Finance Act, 2017 has issued Income Tax Circular No. 04 of 2017. The FBR highlighted changes to Section 148(8) of Income Tax Ordinance, 2001 regarding tax collection on import of plastic raw material.
Tax collected under section 148 of the Ordinance from an industrial undertaking importing plastic raw material falling under PCT heading 39.01 to 39.12 shall now constitute minimum tax on the income of such importer. Furthermore, commercial importers and industrial undertakings importing plastic raw material falling under PCT heading 39.01 to 39.12 and being filers shall forthwith be subject to collection of advance tax at the following rates:-
(i) 1.75 percent of the import value as increased by customs duty, sales tax and Federal Excise duty in the case of an industrial undertaking, being a filer, and importing plastic raw material falling under PCT Heading 39.01 to 39.12 for its own use. As explained above such tax shall be minimum tax in the case of an industrial undertaking.
(ii) 4.5 percent of the import value as increased by customs duty, sales tax and Federal Excise duty in the case of a commercial importer, being a filer, and importing plastic raw material falling under PCT Heading 39.01 to 39.12.
