- Tax on drugs registered under the Drugs Act, 1976 applicable at reduced rate
ISLAMABAD: The pharmaceutical companies are required to get certification from the Drug Regulatory Authority of Pakistan (DRAP) for paying 1% sales tax on the import of Active Pharmaceutical Ingredients (APIs) and their raw materials.
According to the circular number 9 of 2022 issued by the FBR, in order to achieve economic stability and revenue maximization as well as for simplification of revenue laws for the taxpayers, certain amendments/insertions/additions have been made in Sales Tax Act, 1990, Federal Excise Act, 2005 and Islamabad Capital Territory (Tax on Services) Ordinance, 2001 through the Finance Act, 2022.
Drugs registered under the Drugs Act, 1976 have been made chargeable to tax at reduced rate of one percent without input adjustment. Similarly, APIs and their raw materials are also chargeable at fixed rate of 1% subject to certification by DRAP, FBR said.
The condition of providing NIC number has now been restricted in case of supplies by importer/manufacturers to un-registered distributors only.
Reduction of tax rate on potassium chlorate: GST at Rs90 was charged over and above 17 percent ad valorem on potassium chlorate, the rate has been reduced to Rs60 per kg which is to be paid in addition to 17 percent standard rate.
Reduction of Rate for Electric Vehicles Buses: In order to encourage use of non-fossil fuels and renewable energy, rate of tax on EV buses of 25 seats or more which will be mostly used by common man has been reduced to one percent.
Before Finance Act, 2022, all types of electric vehicles (EVs) in CBU condition were chargeable at reduced rate of 12.5 percent. This relief has now been limited to small cars of 50 KWh only and large and expensive vehicles have been made chargeable to tax at normal rate.
Public Limited Companies included in Section 8B: Public limited companies listed on stock exchange were exempt from the provision of section 8B of STA. This discriminatory exemption has been withdrawn to provide level playing field to the entire corporate sector.
In order to curb the misuse of certain items of imported scrap, Value Added Tax (VAT) has been imposed at three percent on import of compressor scrap, motor scrap and copper cable cutting scrap by manufacturers as well as commercial importers, FBR added.
Copyright Business Recorder, 2022