ISLAMABAD: The Senate Standing Committee on Finance and Revenue has finalised recommendation for withdrawal of sales tax and customs duty on stationery inputs through the Finance Bill 2016.
The Senate committee held its meeting under chairmanship of Senator Saleem Mandviwalla at the Parliament House.
During the meeting, the representative of local manufacturing of stationery, Riaz Ud Din, said that zero rated regime existed for this sector which was now abolished by slapping a 17 percent GST in the budget. He also said that some components were imported on which the customs duty proposed at a rate ranging from11 to 20 percent. He demanded zero-rated regime for GST and putting customs duty into fifth schedule.
It was recommended that stationery items should continue to be zero-rated from Sales Tax under the Fifth Schedule to The Sales Tax Act, 1990 and their inputs should also continue to be zero-rated from Customs Duty by placing the items in chapter 99 of Pakistan Customs Tariff, or, in the Fifth Schedule to the Customs Act, 1969. The committee members unanimously supported to abolish taxes on stationery which would be forwarded to National Assembly for final approval.
However, Federal Board of Revenue (FBR) Nisar Mohammad Khan opposed demands of dairy industry and said that vested interests were more powerful as they had just abolished the subsidy being provided by the government in shape of input adjustments and being provided for the last 30 years. He asked if the industry could not penetrate more than 6 percent share of market with support of the government then for how long can the government provide subsidy in shape of provision of input adjustments? The FBR high-ups told the committee that the prices of packaged milk increased during last month. “We have only done away with subsidy,” the Chairman FBR said and added that the government proposed conversion of zero-rated into exemption regime.
The representative of dairy industry told the Senate panel that the price of packaged milk would go up by Rs7-8 per litre if the parliament approved conversion of zero rating into exemption regime in the Finance Bill 2016-17 as this would hike their input cost.
