Updates in Sales Tax Notifications
The following amendments have been made in sales tax
Vide SRO 152(I)/2013, amendments have been made in SRO 811(I)/2009 dated 19.09.2009. Vide this amendment, the exemption of sales tax available on import and supply of polyethylene and poly proplylene for manufacture of monofilament yarn and net cloth for greenhouse farming has been withdrawn. This will now be subject to sales tax at the standard rate of 16%. Vide SRO 153(I)/2013, rate of sales tax on import of local supply of black tea has been increased from 5% to the sandard rate of 16%.
iii) Changes have been made in SRO 1125(I)/2011 dated 30.12.2011 vide SRO 154(I)/2013 dated 28.02.2013. SRO 1125(I)/2011 relates to five export oriented sectors namely; textile, leather, sport goods, surgical goods and carpets. Rate of sales tax in case of supplies within the sector has been reduced from 5% to 2%. However, supplies made to sectors outside the five sectors will be charged to tax @ 5%. Retailers are also required to pay tax @ 2% on their retail sale. They are also entitled for input tax adjustment of their purchases. Registered manufracturers who process goods owned by others shall also charge sales tax @ 2% on the open market price of the goods. It means that they will not charge sales tax merely on their processing charges, but will charge sales tax on the market price of the goods, inclusive of the processing charges. As previously, input tax paid on purchase of input goods is available. Inputs of machinery parts, spares and lubricants, electricity and gas will also remain available as was previously being allowed. Changes in this SRO are effective from 1st of March, 2013.