Import of 128 items, raw materials and inputs: FBR decides to apply reduced rate of 1pc IT
ISLAMABAD: The Federal Board of Revenue (FBR) has decided to apply a reduced rate of one percent income tax on the import of 128 items, raw materials and inputs on which sales tax will be charged at zero-rate or reduced rate of 5 percent for five export-oriented sectors and commercial importers under new zero-rating regime.
Sources told Business Recorder here on Tuesday that the FBR will issue a clarification to the Model Customs Collectorates (MCCs) to charge reduced rate of one percent withholding tax on the imports made under the SRO.1125 (I)/2011. This is a major facilitative measure to apply reduced rate on the import of raw materials, inputs and goods made by commercial importers as well as non-zero rated sectors. Thus, all categories of importers covered under the new zero-rated regime would be entitled to concessionary rate of one percent withholding tax at the import stage. The concessionary regime of income tax in the form of reduced rate of one percent at the import stage would continue for the persons availing the benefits of the SRO.1125 (I)/2011.
The FBR had notified list of 128 items through a SRO.1125 (I)/2011 and the final list of raw materials, inputs and goods was duly accepted by the commercial importers and all other stakeholders. The Board has received various queries from the customs officials as well as stakeholders about the status of the applicability of the income tax to be charged on the imports made under the newly revamped zero-rating regime.
Through a clarification, the FBR will inform the field formations that the reduced rate of one percent income tax would be charged on the import raw materials and inputs under the new zero-rating regime, sources added. Under the new notification, i.e., SRO.1125 (I)/2011, the FBR has notified goods falling under the PCT headings including the goods or class of goods mentioned in the conditions stated in the new notification, to be the goods on which sales tax shall, subject to the laid down conditions, be charged at zero-rate or, as the case may be, at the rate of five percent or 16 percent wherever applicable to the extent and in the manner as specified in the conditions.