ISLAMABAD: The Federal Board of Revenue (FBR) has submitted a budgetary proposal to the Finance Ministry regarding reduction in sales tax exemption threshold for cottage industry in upcoming budget (2014-15).
According to details, there is an exemption threshold of Rs5 million under the Sixth schedule of Sales Tax Act, 1990 for cottage industry. The persons having annual turnover of less than Rs5,000,000 or having utility bills below 700,000 per annum are not required to get sales tax registration under section 14 of the Sales Tax Act, 1990.
Under serial 3 of the Sixth Schedule of the Sales Tax Act, supplies made by cottage industry and retailers whose annual turnover from supplies, whether taxable or otherwise, made in any tax period during the last 12 months ending any tax period does not exceed Rs5 million enjoys sales tax exemption. It has been learnt that the FBR, to broaden the tax base, seriously considering reduction in threshold limit so that tax net could be increased without allowing any exemption or curtailing the exemption limit to a certain extent.
