Import of Photovoltaic cells in 2023-24: Rs102bn loss suffered on account of ST exemptions

ISLAMABAD: The Federal Board of Revenue (FBR) has suffered revenue loss of Rs102 billion during 2023-24 on account of sales tax exemption on the import of Photovoltaic cells used in the solar panels for manufacturing sector/general masses.

According to the latest Tax Expenditure Report-2025 issued by the FBR, the sales tax exemption under the Sixth Schedule of the Sales Tax Act (2023-24) caused revenue loss of Rs102 billion during 2023-24 on account of sales tax exemption on the import of Photovoltaic cells whether or not assembled in modules or made up into panels manufacturing sector/general masses.

In last budget (2025-26), the government had imposed 18 percent sales tax on the import of solar panels. The proposal of imposing 18 per cent general sales tax (GST) on solar panels had sparked considerable debate.

Upon review, it was revealed that 54 per cent of components used in solarisation were already taxed under the existing regime, and the 18 per cent tax applied only to the remaining 46 per cent. However, after mutual consultations, the government reduced GST from 18 per cent to 10 per cent.

Directorate General of Customs Valuation, Karachi, has reduced customs value up to USD0.08/Watt to $0.09/Watt on the import of solar panels of all origin.

Copyright Business Recorder, 2025