Withdrawal of exemptions, zero-ratings: section 13 of ST Act 1990 may be employed

The powers of section 13 of the Sales Tax Act 1990 may be exercised by the Federal Board of Revenue to silently withdraw sales tax exemptions and zero-ratings through issuance of the notifications.
Tax experts told Business Recorder here on Tuesday that the FBR has no legal authority to increase rate of sales tax and federal excise, but it has ample powers under the Sales Tax Act 1990 to reduce tax rates through statutory regulatory order (SRO) without the approval of the Parliament.
Sources said the Board is legally empowered to withdraw list of major sales tax exemptions as specified in the Sixth Schedule of the Sales Tax Act, 1990. The Exemption Schedule of the Sales Tax Act is directly linked with section 13 of the Sales Tax Act.
The FBR is compiling lists of sales tax exemptions and zero-ratings, which were issued through notifications from time to time. The exemptions would be withdrawn through the notifications, if necessary. The Board has the legal authority to rescind the notifications and the statutory regulatory orders (SROs) through which exemptions and zero-rating facility is granted to different sectors. If the intention of the government is to silently withdrawn the exemptions and zero-rating, powers of section 13 of the Sales Tax Act 1990 would be enough to take away such exemptions.
Under section 13 of the Sales Tax Act, 1990, the Federal Government may, by notification in the official Gazette, exempt any taxable supplies made or import or supply of any goods or class of goods, from the whole or any part of the tax chargeable under this Act, subject to the conditions and limitations specified therein. The Board may, by special order in each case stating the reasons, exempt any import or supply of goods of such description or class, as may be specified from the payment of the whole or any part of the tax chargeable under Sales Tax Act. The exemption from tax chargeable under sub-section (2) may be allowed from any previous date specified in the notification issued under clause (a) or, as the case may be, order made.