ST collection at import stage up by 24.8 percent

The collection of sales tax at import stage has registered an increase of 24.8 percent during 2010-11 after increase in the sales tax rate by one percentage point from 16 to 17 percent. The FBR's quarterly report issued here on Monday said that the sales tax on imports was a significant component of federal tax receipts.
The collection of sales tax has posted an increase of 24.8 percent during 2010-11 mainly due to increased sales tax rate and 18.8 percent growth in the imports during 2010-11. Around 80 percent of the collections have been emanated from 10 major items. Like sales tax domestic, petroleum is also a leading source of sales tax collection at import stage. The collection of sales tax from petroleum reflected a growth of 11.1 percent. Although imports from petroleum products grew by 23 percent, main driver behind this growth is crude oil, which grew by 54.7 percent, which is zero-rated. Thus, growth in the collection of sales tax from petroleum is not matching with the overall growth in the imports of petroleum products.
The collection of edible oils (Chapter:15) has improved by 52.9 percent during 2010-11 due to 56.7 percent growth in the import of edible oil. Plastic is the third major revenue generation source of sales tax. It has contributed 8 percent of the total sales tax on imports. The growth of 29.2 percent in the collection of plastic is almost aligned with growth of 26 percent in the value of imports. As far as automobile is concerned, around 23 percent growth in the collection of sales tax from imports of automobile has been recorded during 2010-11. Surprisingly, the imports of automobile grew by only 1.7 percent during this period which is mainly due to substantial decline in the imports of tractors by 76.2 percent which was zero-rated until mid March, 2011.