Leather manufacturers: FBR trims negative list to allow ST refund

ISLAMABAD: The Federal Board of Revenue (FBR) has removed polyurethane, an integral raw material used in leather goods, from the negative list governing sales tax refunds for manufacturers of five export-oriented sectors.

The decision has been taken through Sales Tax General Order (STGO) No. 24 of 2026, amending STGO No. 09 of 2023 dated March 15, 2023.

Under the amended order, FBR has excluded the item falling under HS Code 3909, appearing at serial number 292 of the negative list annexed to STGO No. 09 of 2023.

The FBR said the item was being removed from the negative list as it is an integral part of the raw material used in leather goods.

The amendment relates to the sales tax refund mechanism for manufacturers of textile, carpet, leather, surgical and sports goods, which are covered under the relevant refund regime.

With the exclusion of the item from the negative list, the restriction applicable to it under STGO No. 09 of 2023 has been withdrawn, subject to the other applicable conditions of the sales tax refund regime.

The FBR has made the amendment in partial modification of STGO No. 09 of 2023 and has ordered that it shall take effect immediately.

The amendment effectively provides relief to manufacturers of leather goods by removing the specified raw material from the negative list applicable to the refund mechanism.

Copyright Business Recorder, 2026