500k MT sugar import: FBR exempts customs duty, reduces sales tax from 18% to 0.25%

ISLAMABAD: The Federal Board of Revenue (FBR) has exempted customs duty on the import of 500,000 metric tons of sugar and also reduced sales tax rate from 18% to 0.25% and withholding tax up to 0.25% on the import of commodity by the Trading Corporation of Pakistan (TCP) or private sector.

The FBR has also exempted 3% minimum value added tax (VAT) on the import of sugar having quantity of 500,000 metric tons.

The development comes as the board issued three notifications i.e. SRO.1215(I)/2025, S.R.O. 1216(I)2025 and SRO.1215(I)/2025 on Wednesday.

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The similar conditions would be applicable for availing exemption of customs duty and reduced rate of sales tax and withholding tax on the import of sugar under these three notifications.

According to S.R.O. 1216, the FBR has amended Second Schedule of the Income Tax Ordinance to reduce the rate of withholding tax at 0.25%.

Pursuant to the Cabinet Decision, the withholding tax under section 148 shall be collected at the rate of 0.25% of the value of commercial import of while crystalline sugar up to 500,000 metric ton in aggregate subject to the following conditions:

1. The import of sugar shall be carried out by Commerce Division through Trading Corporation of Pakistan or private sector subject to conditions, limitations and quota allotments for immediate and subsequent requirements during the specified period.

2. The Commerce Division shall ensure quality assurance of the imported sugar through an international inspection firm; and

3. The cut-off date for import of sugar to avail exemption under this notification shall be September 30, 2025.

The S.R.O. 1217(I)/2025 reduced the rate of sales tax from 18% to 0.25% and exempt the minimum value added tax (VAI) at the rate of 3%, as specified under the Twelfth Schedule to the Sales Tax Act. 1990 on import and subsequent supply of white crystalline sugar up to 500,000 metric tons by the TCP or private sector subject to the above mentioned conditions.

Under SRO.1215(I)/2025, the FBR exempted customs duty on the sugar, falling under the respective PCT Code.