ISLAMABAD: The Federal Board of Revenue and the Engineering Development Board (EDB) have jointly worked out revision of major sales tax SRO including SRO 727(I)/2011, SRO 575(I)/2006, SRO 549(I)/2008, SRO 551(I)/2008, SRO 501(I)/2013 and SRO 670(I)/2013 with a view to providing level playing field to local manufacturers.
In this regard, the FBR and the EDB have finalised recommendations for budget 2014-15.
According to details, the FBR has considered six major sales tax related SROs under the phasing out exercise for 2014-15. The SRO 727(I)/2011 is providing exemption on import of machinery, SRO 575(I)/2006 provides exemption on import machinery, equipment, apparatus and capital goods, SRO 549(I)/2008 deals with zero-rating on import of specified goods and SRO 551(I)/2008 gives sales tax exemption on import and supply of certain items. Similarly SRO 501(I)/2013 provides exemption from sales tax on import and supply of specified goods (ie soyabean meal, oil cake and construction materials for Gwadar EPZ). SRO 670(I)/2013 is a survey based SRO providing zero rating on import & supply of specified goods & raw materials, packing materials, sub-components, components, sub-assemblies & assemblies for the manufacture of goods, ie, stationary items, dairy products, bicycles. On the other hand, the proposals submitted the industrial stakeholders, based on principles set by FBR, were discussed by EDB with concerned stakeholders in a meeting wherein different recommendation for each SRO have been made.
The FBR proposed that SRO.727(I)/2011 to be withdrawn through budget 2014-15 to which the EDB agreed on the basis that otherwise local industry may also be exempted/zero rated to provide level playing field.
Similarly, the FBR proposed that the entries/ sectors against S Nos.6,11,12,13,14,18,20,27,35,35A of the SRO 575(I)/2006 to be retained. EBD recommended that the entries to be retained be linked with CGO-11/2007 to provide level playing field to the local manufacturers of these goods.
The FBR further proposed that the entries/sectors against S Nos.2,3,4,7,8,9,10,15,16,17,19,24,25,26,30,31,32,33,37,38,39, are proposed to be withdrawn under SRO 575(I)/2006. The EDB agreed to the proposal of the FBR.
Meanwhile, the FBR proposed that under SRO 549(I)/2008, concession under this SRO can be shifted to 5th Schedule to the Sales Tax Act. The EDB recommended that level playing filed may be provided to local manufacturers of goods covered under SRO 549(1)/2006.
