The Federal Board of Revenue (FBR) has given its approval for a concessionary regime on the supply of electricity and gas to manufacturing units. The decision, announced in a notification issued on Wednesday, is set to benefit manufacturers and exporters who have been availing the zero-rating of sales tax under the rescinded SRO 1125(I)/2011 dated December 31, 2011.
The FBR’s decision aligns with the directive of the Economic Coordination Committee (ECC), which was dated December 02, 2020. This move is expected to provide a much-needed stimulus to the manufacturing sector, encouraging growth and facilitating the business environment.
According to the notification, the concessionary rate will be applicable to 4,084 taxpayers who were availing the zero-rating of sales tax on the supply of utilities under the rescinded SRO 1125(I)/2011. These taxpayers’ particulars were documented in various Sales Tax General Orders (STGOs) issued until June 30, 2019, and they must also be present in the current Active Taxpayers List (ATL).
The FBR emphasized its commitment to transparency and accountability in the implementation of this concessionary regime. It stated that a monthly ATL list is shared with Distribution Companies and Gas Companies regularly. The utility companies are mandated to ensure that the concessionary utility tariff is only extended to those manufacturers and taxpayers who appear on the ATL while generating monthly electricity and gas bills.
This decision is expected to have far-reaching implications for the manufacturing sector, as it will provide financial relief to businesses that have been grappling with challenges. The concessionary regime aims to reduce the operational costs of manufacturing units, making them more competitive in the market.
The FBR’s decision also comes as a part of broader government initiatives to promote economic growth and industrial development. By supporting manufacturers and exporters through favorable policies, the government aims to create a conducive environment for businesses to thrive.
Industry experts have welcomed the move, highlighting its potential to stimulate investment and job creation within the manufacturing sector. The concessionary regime on electricity and gas is expected to enhance the overall competitiveness of Pakistani products in both domestic and international markets.
As the manufacturing sector plays a pivotal role in driving economic growth, the FBR’s decision is seen as a positive step towards achieving sustainable development goals. The implementation of this concessionary regime is eagerly anticipated by businesses, and it is expected to pave the way for a more resilient and vibrant manufacturing landscape in Pakistan.
