Steel, plastic and paper products: FBR decides to withdraw exclusion of ST withholding

The Federal Board of Revenue (FBR) has decided to withdraw exclusion of sales tax withholding from steel, plastic and paper products industries under sales tax withholding rules 2007. Sources told Business Recorder here on Sunday that an amendment would be made in the sales tax special procedure for withholding to revise sales tax withholding regime in order to withdraw exemption from withholding of sales tax @ 1/5th of the sales tax amount on steel, plastic and paper products.
At present, sectors of steel, plastic and paper products are exempted from withholding/ deducting sales tax under the exclusion given at rule 5 of the sales tax withholding rules on the grounds that these products were earlier attracts higher rate of sales tax at the time of inception of sales tax withholding law. Subsequently, government has abolished higher sales tax rate, therefore now. It has been proposed to withdraw exemption from withholding of steel, plastic and paper products as higher rate of sales tax on these products does not exist.