Income Tax Ordinance 2001: Live chicken, fish and birds exempt from agricultural produce: FBR

ISLAMABAD: The Federal Board of Revenue (FBR) has declared income tax provision of section 153 of the Income Tax Ordinance 2001, is applicable on payments made for purchase of live animals except chicken, fish and birds.

In this regard, the FBR has issued a clarification to All Pakistan Meat Exporters & Processing Association on agricultural produce.

A tax expert explained that the exemption under section 153 of the Income Tax Ordinance 2001 is available on agricultural produce, however live animals are not included in the definition of agricultural produce as per FBR’s clarification. Therefore, the FBR has clarified that income tax provision of section 153 of the Income Tax Ordinance 2001 is applicable on live animals except live chicken, fish and birds, the tax expert added.

According to FBR’s clarification, All Pakistan Meat Exporters & Processing Association has sought clarification that live stock is an agricultural produce in line with poultry, eggs, milk, fish and crops.

The exemption from applicability of section 153 (payments for goods, services and contracts) of the Income Tax Ordinance 2001 is available to agriculture products which are covered under clause (46AA) of Part-IV of the Second Schedule to the Income Tax Ordinance 2001. Moreover clause (12) excludes the agriculture products from the operation of section 21(I) of the Income Tax Ordinance 2001, FBR stated.

Under clause 46AA, FBR has mentioned that the provisions of section 153 shall not apply to the specified categories of persons as recipients of payment.

The FBR added that it is settled principal of law that exemption and concession are required to be interpreted as per literal word of law. The clause (46AA) does not include live animals except live chicken, fish & birds under the definition of agriculture produce. Therefore, it is clarified that provision of section 153 and 12(I) are applicable to the transactions related to the live animals except live chicken, fish & birds.

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