FBR withdraws sales tax zero-rating on electricity supply to two textile units

KARACHI: Federal Board of Revenue (FBR) has suspended sales tax zero rating on supply of electricity to two textile units on misuse of tax concession facility.



According to a notification issued on Friday, the FBR suspended the sales tax zero-rating on supply of electricity to textile units included: Mohammad Ashraf and Sons and Sadaf Enterprises.

The FBR withdrew the facility on the recommendation of Corporate Regional Tax Office (CRTO) and RTO-III Karachi.

The FBR directed chief commissioners of CRTO and RTO-III to coordinate with K-Electric regarding implementation of normal rates.

The chief commissioners have also been directed to take action of recovery, if any, misuse of the facility.

The FBR also asked M/s. K-Electric to start charging sales tax on the supply of electricity to unit mentioned above with immediate effect.

The government allowed zero rated facility under SRO 1125(I)/2011 dated December 12, 2011 on supply of electricity to textile units for reducing cost of production and improving exports.

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