FBR slaps sales tax at 17% on supply of food stuff

FBR slaps sales tax at 17% on supply of food stuff

ISLAMABAD: The Federal Board of Revenue (FBR) has slapped sales tax at 17 per cent on supply of food stuff by restaurants, bakeries, caterers and sweetmeats shops.

The FBR issued Circular No. 07 of 2022 on Thursday to explain amendment introduced in the Sales Tax Act, 1990, through Finance (Supplementary) Act, 2022. The revenue body explained tax treatment on supply of prepared food, food stuff and sweetmeats supplied by restaurants, bakeries, caterers and sweetmeat shops.

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The FBR said that till January 15, 2022, food, food stuff and sweetmeats supplied by restaurants, bakeries, caterers and sweetmeats shops was taxable at 7.5 per cent under serial No. 64 of Eighth Schedule of Sales Tax Act, 1990, with the condition that no input tax shall be adjusted.

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“Through Finance (Supplementary) Act, 2022, serial No. 64 of Eighth Schedule of Sales Tax Act, 1990 has been omitted; now these products shall be chargeable to tax at 17 per cent under the VAT regime,” the FBR said.

The FBR further explained that services mentioned under Serial No. 1 of the Schedule to ICT Service Ordinance, 2001 by hotels, motels, guest houses, marriage halls and lawns (by whatever name called) including ‘pandal’ and ‘shamiana’ services, clubs including race clubs, and caterers shall continue to be chargeable to tax at 16 per cent.

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