Steel, oil & ghee industry supplies: New tax law may grant exemption from 3pc further GST

ISLAMABAD: The Tax Laws (Third) Amendment Ordinance, 2021 is expected to exempt steel sector and ghee and cooking oil industry from payment of three percent further sales tax on the supplies made to the unregistered persons.

Sources told Business Recorder here on Wednesday that the Federal Board of Revenue (FBR) has finalised the draft of the Tax Laws (Third) Amendment Ordinance, 2021. Under the proposed Ordinance, the FBR has proposed to facilitate the ghee and cooking oil industry by granting exemption of three percent value addition sales tax at the import stage.

Moreover, the government may also exempt three percent further sales tax on the supplies made to the unregistered persons.

Similar kind of relief is expected to be announced for the steel sector and their supplies would also be exempted from “further sales tax”.

A tax expert stated that the three percent further sales tax was imposed to encourage new registrations and voluntary compliance.

To increase sales tax registrations, the government had imposed three percent further sales tax on the supplies made to the un-registered persons.

The un-registered persons are paying additional three percent further sales tax along with the 17 percent standard sales tax.

Tax Laws (Third) Amendment Ordinance, 2021 has been drafted to amend the Sales Tax Act 1990, Income Tax Ordinance 2001, Federal Excise Act 2005 and Customs Act 1969.

Tax Laws (Third) Amendment Ordinance, 2021 would also remove some procedural and technical anomalies in the Finance Act 2021 including changes in the Pakistan Customs Tariff (PCT) codes of different items.

Copyright Business Recorder, 2021