KARACHI: The Federal Board of Revenue (FBR) has declared that sales tax exemption on import and supply of watermelon and melon seeds for sowing is available under the Sixth Schedule of Sates Tax Act, 1990, if it was duly certified by the relevant government agency that the same shall be used for the sowing only.
In this regard, the FBR has issued a sales tax clarification on the ‘clearance of confusion on HS Codes 1209 & 1207 i.e. vegetable seeds for sowing’ to the Seed Association of Pakistan.
The clarification has also been communicated to the collectors of Pakistan Customs for granting sales tax exemption on the said item under the Sixth Schedule to the Sales Tax Act, 1990.
According to the FBR’s directive to field formations, the issue of exemption from the payment of sales tax on import and supply of watermelon and melon seeds for sowing has been examined.
For convenience and quick reference, the relevant provision i.e. item at S. No 20 of Table-1 of the Sixth Schedule to the Sales Tax Act, 1990 and Note 1 at the bottom of Table I & 11 are reproduced:
Name of item is seeds, fruit and spores of a kind used for sowing and the relevant Pakistan Customs Tariff headings are: 1209.1000; 1209.2100; 1209.2200; 1209.2300; 109.2400; 1209; 2500; 1209.22900; 1209.3000; 1209.9110; 1209.9120; 1209.9130; 1209.9190 and 1209.9900.
Note: “For the purposes of this schedule, for entries against which classification of headings or sub headings has been specified, exemption shall be admissible on the basis of description of goods as mentioned in column (2) of this schedule.
The PCT classification of headings is provided for the ease of reference and commodity classification purpose only,” the FBR said.
In the light of above mentioned provision read with Section 13(1) of the Sales Tax Act, 1990, the board has stated that the said exemption from payment of sales tax is available under Serial No 20 of Table-I of Sixth Schedule to the Sales Tax Act, 1990 if duly certified by the relevant government agency that the same shall exclusively be used for sowing only.
