Salient features of Sales Tax, FED

ISLAMABAD: Following are Salient Features of Sales Tax and Federal Excise Budgetary Measures proposed for fiscal year 2019-20 by the government on Tuesday.

- Withdrawal of 3% Value Addition Tax on petroleum products and mobile phones

- Fixed sales tax on brick kilns are proposed to be taxed at fixed rate of Rs 12,500 per month for A category, Rs 10,000 for B category  and Rs 7,500 for C category.

- Uniform rate of 10% to be taxed on various forms of milk

-Withdrawal of exemption of FED on internet services and foreign satellite bandwidth service telecom services.

- Allowing zero rating on supply of tobacco to exporters

-  exclusion of government bodies from purview of extra tax and further tax –

- SRO 1125(I)/2011 providing for zero-rate of sales tax on inputs and products of five export-oriented sectors i.e. textile, leather, carpets, sports goods and surgical goods is proposed to be rescinded.

- Rate of FED on aerated waters is proposed to be increased from 11.5% to 14%.

- Special Regime of taxation of the whole of the steel sector is being abolished

- Increase in rate of FED to 17% on edible oils / ghee / cooking oil is proposed

- In order to realize due sales tax from this sector, it is proposed to re-notify the value for sales tax on supply from gas distribution company to CNG dealers

- FED on cigarettes is levied on fixed rate basis. It is proposed to enhance the rates and redefine the thresholds by abolishing the third tier introduced earlier

- Sales Tax on Sugar increased from 8% to 17%

- More items are being taken out of the Sixth Schedule and brought into the tax net if sold in retail packing and with a brand name like Frozen Sausages, meat if preserved, fat filled milk and cereals other than those of wheat and meslin

- FED on packaged non-aerated sugary/flavoured juices, syrups and squashes are proposed to subjected to FED at 5% of retail price.

- FED on cement increased from Rs 1.5 per kg to Rs 2 per kg

- It is proposed to increase FED on LNG from Rs. 17.18 per 100 cu. m to Rs. 10 per MMBTU bringing it to same level as for local gas

- It is proposed that gold in jewellery may be taxed at 1.5%, diamond at 0.5% and making charges at 3%, with input adjustment available only in respect of gold

- FED proposed on Cars from 0 to 1000cc at 2.5%, from 1001cc to 2000cc 5%, from 2001 cc and above 7.5%.