ISLAMABAD: Federal Board of Revenue (FBR) has excluded many financing products of Islamic banking in the definition of supply for the purpose of calculating sales tax.
The FBR issued SRO 588(I)/2017 to amend SRO 445(I)/2004, which specifies the types of transactions which shall not constituted supply. Previously, the definition included goods delivered under a Murabaha financing arrangement to or by a bank or a financial institution approved by the State Bank of Pakistan or the Securities and Exchange Commissionof Pakistan, as the case may be.
The FBR, however, included financing such as: Musawamah, Bai Muajjal, Bai Salam, Istisna, Tijarah and Istijrar under this definition.
