ISLAMABAD: The Federal Board of Revenue (FBR) has granted exemption in sales tax on import of materials and equipment for construction and operation of Gwadar Port and Gwadar Free Zone. Sales tax exemptions have been provided under table-1 of the sixth schedule to the Sales Tax Act, 1990 and third schedule to the Federal Excise Act, 2005.
“The provision of exemption was almost invariably made subject to the condition that imported items/ goods were not manufactured locally,” sources said.
The sources told Customs Today that interest of local manufacturing sector, textile and leather in particular had been safeguarded by subjecting ready to use finished articles of textile and leather to sales tax @ 17%. Whereas similar articles of local manufacturing sector were subject to reduced sales tax rate of 5% later enhanced to 6% vide Finance Act, 2017.
However, the sources said that exemption from sales tax to medical equipment, machinery and items for mine construction, for Thar Coal Field, for power generation projects, power transmission projects, for marble, granite and gems stones extraction and processing industries, to items for promotion of renewable sources of energy is available under table-III of the Sixth Schedule to the Sales Tax Act, 1990 had also been granted. However, to safeguard the interests of local manufacturing sectors, the said exemption was subject to the conditions that imported machinery/goods are not manufactured locally.
