Sugar import by TCP: Deadline for exemption of duties, taxes extended

ISLAMABAD: The Federal Board of Revenue (FBR) on Monday extended the date for exemption of duties and taxes on the sugar import by the Trading Corporation of Pakistan (TCP) until November 30, 2025.

The breakup revealed that the FBR has extended the date for exemption of customs duty on the import of 500,000 metric tons of sugar up to November 30, 2025, and also extended the date of reduced sales tax rate from 18 percent to 0.25 percent and reduced withholding tax up to 0.25 percent on the import of the commodity by the TCP.

The FBR has amended three notifications, i.e., SRO 1215(I)/2025, SRO 1216(I) 2025, and SRO 1217(I)/2025, issued last month.

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The FBR has amended SRO 1215(I)/2025 (customs) through the issuance of SRO 1834(I)/2025 on Monday.

The FBR has amended SRO 1216(I)/2025 (income tax) through the issuance of SRO 1833(I)/2025.

The FBR has amended SRO 1217(I)/2025 (sales tax) by issuing SRO 1832(I)/2025.

After these amendments, the FBR has extended the date from September 30 to November 30, 2025, for availing tax exemption on the import of the commodity by the TCP.

The FBR has also exempted a three percent minimum value-added tax (VAT) on the import of sugar up to a quantity of 500,000 metric tons.

The similar conditions would be applicable for availing the exemption of customs duty, and reduced rate of sales tax and withholding tax on the import of sugar under these three notifications.

The impact is 47 percent exemptions in taxes and duties on sugar imports by the TCP. The sugar imports are typically subject to 47.5 percent taxes comprising 20 percent customs duty, 18 percent General Sales Tax (GST), three percent value-added tax, and 6.5 percent income tax. The government has now exempted state-owned sugar imports from these duties, with only a five percent tax remaining applicable, the official added.

According to SRO 1216, the FBR has amended the Second Schedule of the Income Tax Ordinance to reduce the rate of withholding tax to 0.25 percent.

Pursuant to the Cabinet Decision, the withholding tax under section 148 shall be collected at the rate of 0.25 percent of the value of commercial import of while crystalline sugar up to 500,000 metric ton in aggregate, subject to the following conditions:

The import of sugar shall be carried out by the Commerce Division through the TCP or the private sector, subject to conditions, limitations, and quota allotments for immediate and subsequent requirements during the specified period.

The Commerce Division shall ensure quality assurance of the imported sugar through an international inspection firm; and

The cut-off date for import of sugar to avail exemption under this notification was September 30, 2025, which has now been extended up to November 30, 2025.

The SRO 1217(I)/2025 reduced the rate of sales tax from 18 percent to 0.25 percent and exempted the minimum value-added tax (VAT) at the rate of three percent, as specified under the Twelfth Schedule to the Sales Tax Act 1990 on import and subsequent supply of white crystalline sugar up to 500,000 metric tons by the TCP or private sector, subject to the above-mentioned conditions.

Under SRO 1215(I)/2025, the FBR exempted customs duty on the sugar, falling under the respective PCT Code.

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