ISLAMABAD: Federal Board of Revenue (FBR) has fixed Rs 8 as sales tax for 40 kilogram of cottonseed for the period starting from July 01, 2019.
Similarly, Rs 7 sales tax for 40kg of cottonseed for the period of starting July 01, 2018 and ending on June 30, 2018 (both days inclusive).
The FBR on Tuesday issued SRO 253(I)/2019 and said that SRO 188(I)/2015 dated March 05, 2018 was issued for a special procedure for payment of sales tax on cottonseed oil and to exempt cottonseed oil cake from payment of sales tax.
The FBR further said that the notification was declared ultra vires by the Lahore High Court and the order of the Lahore High Court was upheld by the Supreme Court of Pakistan vide its order dated April 16, 2018 in Civil Petition No. 1028 to 1121, 1433 to 14558 and 2550 to 2553 of 2017 on the ground that the approval of the federal cabinet was not obtained.
Therefore, the federal government approved the amendments to Sales Tax (Special Procedures) Rules, 2007, which would be effective July 01, 2018.
The FBR said that the notified sales tax rates would be collected under the special procedure.
It said that all cotton ginners, if not already registered or required to be registered, shall obtain sales tax registration for the purpose of these rules.
The amount of sales tax so charged and collected by the cotton ginners shall be declared in the monthly returns and shall be deposited as such without any input tax adjustment.
The suppliers of cottonseed shall mention sales tax charged separately on the sales tax invoice to be issued by them.
The oil expelling units using the cottonseed on which sales tax has been charged and collected in the aforesaid manner shall be exempt from payment of sales tax on the supplies of oil cake produced from such cottonseed.
The ginner shall submit a certificate to the commissioner having jurisdiction by the 15th day of the month following the tax period for the quantity of cottonseed supplied to the growers for sowing purpose.