The Federal Board of Revenue (FBR) has published an updated list of goods that will be subject to zero-rate sales tax during the fiscal year 2025-26. This update is part of the latest changes made to the Sales Tax Act, 1990, ensuring businesses clearly understand which items qualify for tax relief.
What is Zero-Rate Sales Tax?
Zero-rate sales tax means that goods are taxed at a zero percent rate. Businesses can still claim input tax credits on these supplies, helping them reduce costs while boosting trade and exports.
Key Goods Covered Under Section 4
According to Section 4 of the updated law:
• All goods exported from Pakistan qualify for zero-rate tax, encouraging international trade.
• Supplies of stores and provisions for ships, aircraft, or other conveyances traveling to destinations outside Pakistan are also included.
• Additional goods may be added by the Federal Government in special cases, such as national security needs, natural disasters, or international agreements.
Important Conditions
However, not all goods qualify. Items that are exported but later re-imported, or those declared for export but never shipped, are excluded from zero-rate sales tax benefits. Additionally, the government may limit the amount of input tax credit claimed on these supplies to prevent misuse.
This move aims to support exporters, simplify tax procedures, and strengthen Pakistan’s trade competitiveness.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal or financial advice. Tax laws, rates, and regulations may change, and interpretations can vary based on specific circumstances. Readers are advised to consult the Federal Board of Revenue (FBR) or a qualified tax professional for the latest updates and guidance tailored to their situation.