To facilitate the importers of yarn, the Central Board of Revenue (CBR) has reduced withholding tax on the import of all types of polyester yarn and fibre from 6 to 2 percent. The CBR has amended the Second Schedule of the Income Tax Ordinance 2001 through SRO 769(I)/2004 for extending this concession to the textile industry.
Sources told Business Recorder that the withholding tax has been slashed on the import of all types of yarn under the anomaly notifications issued by the Board.
The anomaly notifications of customs and sales tax have already been issued. The SRO 769(I)/2004 has been issued for removing anomaly on the income tax side.
According to the notification, "in case of import of polyester yarn/fibre of all types, the tax under section 148 shall be collected at the rate of two percent of the value of such item as increased by custom duty and sales tax, if any, levied thereon".
FOLLOWING IS THE TEXT OF THE NOTIFICATION ISSUED ON WEDNESDAY: In exercise of the powers conferred by sub-section (2) of section 53 of the Income Tax Ordinance, 2001 (XLIX of 2001), the Federal Government is pleased to direct that the following further amendment shall be made in the Second Schedule to the said Ordinance, namely:-
In the aforesaid Schedule, in Part II, after clause (13C), the following new clause shall be added, namely:-
"(13D) In respect of import of polyester yarn/fibre of all types, the tax under section 148 shall be collected at the rate of two percent of the value of such items as increased by customs-duty and sales tax, if any, levied thereon".