ISLAMABAD: The Federal Board of Revenue (FBR) will strictly allow application of one percent minimum value addition sales tax on the import of coal exclusively for direct supply to a Coal-Fired Independent Power Producer having a license of the National Electric Power Regulatory Authority (NEPRA).
According to sales tax general order number 9 of 2026 issued on Tuesday by the FBR, the Board has issued a procedure and conditions for the application of minimum value addition tax at the rate of one per cent as specified therein on the import of coal.
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The Coal-Fired Independent Power Producer (IPP) means Independent Power Producer generating electricity from coal under a generation license issued by NEPRA.
The conditions revealed that the minimum value addition tax at the rate specified in clause (6) of the Twelfth Schedule shall be applicable only where the importer is registered under the Sales Tax Act 1990.
Secondly, the imported coal is imported exclusively for direct supply to a Coal-Fired Independent Power Producer holding a generation license issued by NEPRA.
Thirdly, at the time of import, the importer furnishes to the Collector of Customs a purchase order, supply agreement, contract or such other documentary evidence as may establish that the imported coal is intended exclusively for direct supply to such Coal-Fired Independent Power Producer.
Fourthly, the importer maintains complete documentary evidence relating to the import and subsequent direct supply of the coal and produces the same on demand before the Commissioner Inland Revenue or the Collector of Customs as the case may be.
Fifthly, the importer complies with such verification or audit requirements as may be prescribed under the Sales Tax Act 1990 and the rules made there under, the FBR added.
Copyright Business Recorder, 2026
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