ISLAMABAD: The Sales Tax Committee of the government has dispelled the fears of retailers and business community regarding the imposition of 0.3 percent withholding tax on bank transaction that it would show their actual turnover exceed Rs 5 million and they would be forced to be registered for the sales tax regime.
“For retailers, there is nothing to worry about on this count as the government has already introduced a new sales tax regime vide SRO 608/2014 which instead of applying the Rs 5 million turnover as yardstick for mandatory registration of sales tax, introduces different categories under which the sales tax regime is applicable,” said senior FBR officials while responding to apprehensions of the retailers and business community during the second meeting of the Sales Tax Committee, constituted by the government to address the issues of business community. The meeting was held at the FBR House Islamabad on Thursday.
The meeting attended by office-bearers and representatives of various chambers and trade bodies was told that under the SRO 608(I)/2014 dated July 2, 2014, the federal government had revamped the entire system of sales tax for retailers. Under the new regime, different categories have been introduced for the registration of retailers, which included a retailer operating as a unit of a national or international chain of stores; a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks; and a retailer whose cumulative electricity bill during the immediately preceding 12 consecutive months exceeds Rs. 600,000.
Any retailer who does not fall in any of these categories would only pay sales tax on his electricity bill and would not be bound to register for the sales tax regime.
Earlier, the meeting held with Rana Muhammad Afzal Khan, MNA and Parliamentary Secretary Finance, in the chair as Convener of the Committee, had detailed interactive sector-to-sector sessions with representatives of sugar, oil and ghee, cement and embroidery sectors. Various proposals and recommendations were discussed and the representatives of these sectors were asked to fine-tune their proposals and present comprehensive sector-based recommendations to the committee in its forthcoming meetings.
The committee would again meet today (Friday) at the FBR House to meet with representatives of iron and steel, chip board and plywood, yarn and fiber, ready-made garments and clothing and oil and lubricants sectors.
