Amendments in SRO 1125(I)/2011 Dated 31.12.2011 (Five Zero-rated sectors)
Federal Government has made further amendments in SRO 1125(I)/2011 relating to five zero-rated sectors i.e. Textile, Leather, Carpet, Sports and Surgical Goods. A new tabel (Table-II) has been introduced in respect of finished articles of leather, artificial leather, textile and textile made-ups. The changes in the notification will have following effect:
1- Finished articles of leather and artificial leather (Footware etc.) and articles of textiles and textile made-ups shall be chargeable to reduced rate of sales tax @5%. Previously these goods were chargeable to sales tax @17% of their reatail price.
2- Supplies of goods useable as indutrial inputs, mentioned in SRO, to sectors other than five sectors shall be chargeable to sales tax @17%. Previously such supplies were chargeable to sales tax @5%.
3- Import of finished goods under the SRO shall be chargeable to sales tax @5% and value addition tax @2%. Previously the same was chargeable to sales tax @2% + Value addition tax @2%.
4- Supplies of finished goods to retailers shall be charged @5% sales tax. Sale of such goods by retailer shall not attract Turnover tax under Special Procedure for Retailers. In case of supplies of goods mentioned in SRO 1125(I)/2011, the retailer will discharge his liability of sales tax under normal system i.e. Output minus input tax.