ISLAMABAD: The Federal Board of Revenue (FBR) has withdrawn fixed sales tax on SIM cards of the mobile phones from July 1, 2021. The FBR has issued sales tax circular number 2 of 2021 Thursday. The FBR said that the sales tax on Subscriber Identification Module (SIM) cards charged at Rs250 per SIM card under the provision of Table-I of the Ninth Schedule to the Sales Tax Act has been abolished with effect from July 1, 2020.

Online market places facilitating the supply of goods owned by third-party suppliers are required to withhold sales tax at the rate of two percent of gross value of supplies made by persons other than active taxpayers, the FBR said.

The FBR has allowed sales tax zero-rating on local supply of raw material, components, parts and plant and machinery to registered exporters under Export Facilitation Scheme, 2021.

According to the FBR, milk and fat-filled milk have also been included in zero-rated regime. In order to mitigate the problems faced by the people residing in border areas of Balochistan and Khyber-Pakhtunkhwa due to fencing and counter smuggling measures, Border Sustenance Markets are being established on the border with Iran and Afghanistan.

To facilitate the said markets, exemption on certain specified items has been granted by inserting new Table-4 in the Sixth Schedule to the STA.

Similarly, exemption from federal excise has also been granted on specified items meant for such markets.

To facilitate and encourage integration of tier-1 retailers, POS machines imported for installation on retail outlets as are integrated with the Board’s Computerized System have been granted exemption from sales tax.

Copyright Business Recorder, 2021