ISLAMABAD: The Federal Board of Revenue (FBR) has suspended the provision of sales tax collection on sugar from the manufacturers on the basis of retail price up to November 30, 2021.

The FBR Thursday issued an SRO989(I)/2021 for not charging sales tax on sugar under the Third Schedule to the Sales Tax Act, 1990 for a specific time period.

According to the notification, in exercise of the powers conferred by the proviso to clause (a) of sub-section (2) of section 3 of the Sales Tax Act, 1990, the federal government has directed that the provisions of S No 50 of Third Schedule to the Sales Tax Act, 1990, shall not be applicable for the period commencing on the July 1, 2021 and ending on November 30, 2021.

The entry number 50 of the Third Schedule to the Sales Tax Act, 1990 is related to the applicability of sales tax on the basis of printed retail price on sugar except where it is supplied as an industrial raw material to pharmaceutical, beverage and confectionery industries.

GST assessment: FBR withdraws fixation of sugar price at Rs60/kg

This sales tax collection mechanism on the basis of printed retail price would not be applicable from July 1, 2021 to November 30, 2021.

Recently, the federal cabinet has decided that the implementation of sales tax on sugar will be at ex-mill price till 30 November 2021.

During last budget, the sales tax was imposed on retail price of sugar and cabinet decision to implement sales tax on ex-mill price would cause a positive impact on prices of sugar and its availability.

Copyright Business Recorder, 2021