FBR exempts sales tax on local supply of imported sugar

FBR exempts sales tax on local supply of imported sugar

ISLAMABAD: Federal Board of Revenue (FBR) on Monday exempted 17 percent sales tax on domestic sale of imported sugar.

The FBR issued SRO 1038(I)/2020 to comply with the government decision to allow tax free import of sugar in order to reduce the price of the commodity in the local market.

The Economic Coordination Committee (ECC) allowed the import of 300,000 metric tons of sugar by Trading Corporation of Pakistan (TCP) without imposition of sales tax at the import stage. The FBR issued SRO 751(I)/2020 dated August 20, 2020 to comply with the decision.

FBR sources said that although the commodity was allowed exemption from sales tax on import of sugar but there was an ambiguity that subsequent sale of such sugar remained subject to sales tax on supply to the domestic market.

To remove this ambiguity the FBR now issued the SRO 1038(I)/2020 dated October 12, 2020 and streamline the supply of sugar to the local market.

The FBR sources believed that this would help in reducing the prices in the local market. The price of sugar in the local market had gone up to above Rs100 per kilogram.

On the other hand, industry sources said that the decision to allow sales tax exemption on local supply of imported sugar would be discriminatory against local sugar manufacturers.

The local sugar mills are subject to 17 percent sales tax on a per kilo price fixed by the government.

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