ISLAMABAD: Federal Board of Revenue (FBR) has enhanced consumption of imported raw material to 125 percent from 110 percent from last year in order to avail income tax exemption on imports.
The FBR issued Circular No. 04 of 2017 to explain the changes to Income Tax Ordinance, 2001 through Finance Act, 2017. The FBR said that prior to the Finance Act 2017, the upper limit for import of raw material by an industrial undertaking for its own use, without collection of tax at the import stage under section 148 of the Ordinance, was 110 percent of the raw material imported and consumed by such industrial undertaking in the previous tax year.
The limit for import of raw material by industrial undertakings, without collection of income tax at the import stage, on the basis of exemption certificate issued by the commissioner, has been increased from 110 percent to 125 percent of the raw material imported and consumed in the previous tax year.
Furthermore, henceforth industrial undertakings importing edible oil, plastic raw materials falling under PCT Heading 39.01 to 39.12 and packing material shall not be entitled to exemption certificate under clause 72B of Part IV of the Second Schedule to the Ordinance.
