ISLAMABAD: The Finance (Supplementary) Act 2023 has given powers of the federal government to the Federal Board of Revenue (FBR) to impose a higher rate of 25 percent sales tax on the import of luxury items.
According to the Finance Act 2023 released by the Federal Board of Revenue (FBR) on Thursday, the federal government may, subject to such conditions and restrictions as it may impose, by notification in the official Gazette, declare that the tax on goods specified in the Third Schedule shall be collected and paid at such higher rate or rates on the retail price thereof, as may be specified in the said notification.
Earlier, the FBR has no powers of the federal government to impose a 25 percent sales tax through a statutory regulatory order (SRO). The Finance (Supplementary) Act 2023 has given such powers to the FBR to impose higher rates of sales tax.
Under the Finance (Supplementary) Act 2023, the person acquiring a capital asset, being shares of a company, shall deduct advance adjustable tax from the gross amount paid as consideration for the shares at the rate of ten percent of the fair market value of the shares which shall be paid to the Commissioner by way of credit to the Federal Government, within fifteen days of the payment.
Every prescribed person shall collect advance tax at the rate specified (10 percent) in Division Xl of Part lV of the First Schedule on the total amount of the bill from a person arranging or holding a function in a marriage hall, marquee, hotel, restaurant, commercial lawn, club, a community place or any other place used for such purpose, subject to such conditions or limitations as may be prescribed.
As per the Act, 10 percent FED would be applicable on sugary fruit juices, syrups, and squashes whether or not containing added sugar or artificial sweeteners excluding mineral and aerated waters. According to the new rates of the FED, the FED would be applicable on club, business and first-class air tickets issued on or after the date of commencement of the Finance (Supplementary
