FPCCI demands restoration of tax exemption on gold import

KARACHI: FPCCI Central Standing Committee on Gems & Jewellery Producers, Manufacturers & Exporters, rejecting imposition of 18 percent sales tax, has demanded restoration of tax exemption on gold import.

Engr Muhammad Adnan Qadri Convener, FPCCI Central Standing Committee on Gems & Jewellery Producers, Manufacturers & Exporters has highlighted a critical issue with Anomaly Committee for the Budget FY25 and said that sales tax imposition will have significantly impacted the Gold Jewellery export sector.

Under SRO 760(I)/2013, Jewellery sector was enjoying exemptions from all duties and taxes related to gold import. All exemptions including sales tax was available for 11 years and discontinued by FBR abruptly in February 2024.

However, recent change in the Customs processing system (WeBOC) led to the sudden withdrawal of these exemptions, particularly affecting the sales tax exemption under the Sales Tax Act and despite assurances from relevant authorities, the proposed amendment to include PCT 99.29 in Section 167 of the Sixth Schedule of the Sales Tax Act was not adopted in the Finance Bill 24-25, causing severe economic repercussions for the sector.

Adana Qadri said that this move is resulted in the imposition of an 18 percent sales tax on gold imports, which is unjustified given the temporary nature of these imports under the entrustment scheme.

Therefore, FPCCI Standing committee has requested the Anomaly Committee constituted by Federal Board of Revenue (FBR) to include the PCT 99.29 in Clause 167 of the Sixth Schedule of the Sales Tax Act.

This amendment is crucial to restoring the exemption status for temporary imports of gold used exclusively for export purposes, aligning with similar provisions granted to other export-oriented sectors.

Adnan Qadri believed that this amendment will not only safeguard the interests of SMEs sector of the country but also uphold fairness and legal consistency in the sector.

He has urged the Anomaly Committee constituted by FBR to review and make this amendment on the request of the industry.

FPCCI standing committee has demanded temporary import of gold for export by all sectors without any sales tax as entire export sector is at standstill since last 5 months impacting economy and export sector severely affected.

Copyright Business Recorder, 2024