ISLAMABAD: The effective rate of sales tax is 4 percent on 60 major sectors during 2014-15 against the existing standard rate of 17 percent sales tax. According to the data compiled by the FBR, the FBR has finalized a sector-wise comparative report on the effective rate of sales tax on 60 major sectors during July-December (2014-15) against the corresponding period of 2013-14.
According to the FBR data an effective rate of sales tax of 60 major sectors in 2014-15; effective rate of sales tax of oil refinery sector stood at 16 percent; cigarettes, 8 percent; POL products, 8 percent; natural gas, 5 percent; fertilizers, 8 percent; cement, 6 percent; oil marketing companies, 1 percent; electrical energy, 1 percent; travel by air, 10 percent; concentrates used in beverages, 8 percent; sugar, 4 percent; Liquefied Petroleum Gas (LPG), 8 percent; tea, 6 percent; beverages, 3 percent; motor cars, 4 percent; iron & steel products, 7 percent; food products, 3 percent; scraps of iron or steel (ship) 85 percent; miscellaneous, 1 percent; cotton yarn, 1 percent; importer, 1 percent; biscuits, 8 percent; motorcycles, 3 percent; detergents, 6 percent; electrical goods & parts (NOS), 4 percent; storage batteries, 8 percent; services provided by telecommunication sector, 7 percent; auto parts, 2 percent; toilet soap, 4 percent; general order suppliers, 2 percent; paint & varnishes, 7 percent; services provided or rendered, 10 percent; plastic products, 2 percent; alcohol, 11 percent; confectionery & bakery product, 4 percent; readymade garments, 2 percent; pickle in oil, 11 percent; fruit or vegetable juices, 5 percent; nylon chips, 6 percent; textile products, 1 percent; paper & paperboard, 2 percent; liquid glucose, 6 percent; services, 2 percent; tyres & tubes, 5 percent; processed fabrics, 2 percent; pesticides, 5 percent; syrups & squashes, 11 percent; ceramic tiles, 8 percent; refrigerators, 9 percent; pharmaceutical products, 4 percent; courier services, 2 percent; electric accumulators & parts, 8 percent; bus tractor truck bodies, 2 percent; insecticides 4 percent; printing industries, 2 percent; creams & polishes for footwear, 6 percent; machinery parts (mechanical), 2 percent; glass bottles, 6 percent; perfumery & cosmetics 3 percent; and effective rate of sales tax of deep freezers is 3 percent during 2014-15.
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When contacted by Customs Today, experts said that the standard rate of sales tax is though 17 percent, effective rate is 4 percent. The effective rate of sales tax is low due to excessive input tax adjustment, fake & flying invoices & claims of input on irrelevant purchases. This leads to lower net tax payments, and greater carry-forward and refunds.
