In comparison with domestic (local sales): GST (imports) collection shows lower growth in FY20

ISLAMABAD: The sales tax (imports) collection showed lower growth as compared to sales tax domestic (local sales), mainly because of reduction in imports during 2019-20.

According to the Federal Board of Revenue (FBR) biannual review for 2019-20, sales tax on imports is a significant component of federal tax receipts. The share of sales tax (imports) in total sales tax net collection is 52.1 percent during first half of 2019-20. The net collection of sales tax imports during the first half of 2019-20 stood at Rs. 446.8 billion against Rs. 385.8 billion in first half of 2018-19.

Ten major commodities of sales tax import have contributed a major chunk i.e. 76.3 percent in sales tax (imports) collection. Like sales tax domestic, mineral fuels & mineral oils is a leading source of sales tax collection at import stage with a share of around 28.6 percent. The share of top five items including mineral fuels & mineral oils, Iron & steel, machinery & mechanical, Plastics & articles thereof and photosensitive semiconductor devices is around 57.6 percent of total collection of sales tax imports. Collection from mineral fuels & mineral oils was Rs. 127.6 billion against Rs. 103.6 billion in first half of 2018-19 depicting an increase of 23.1 percent. The sales tax (imports) collection showed comparatively lower growth Vs growth in slates tax domestic, mainly because of reduction in imports during the period under review, the FBR said.

Customs duty constitutes 24.9 percent and around 15.6 percent of the indirect taxes and federal taxes respectively. The net collection during July-December, 2019-20 has been Rs 326.6 billion against Rs. 336.0 billion in the corresponding period of last year entailing a negative growth of 2.8 percent. The declining national imports have affected the customs revenue significantly, the FBR report added.

Copyright Business Recorder, 2020