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New sales tax Sixth Schedule issued

ISLAMABAD (June 15 2005): The Central Board of Revenue (CBR) has issued an entirely new ''Sixth Schedule'' of Sales Tax Act, 1990, specifying Pakistan Customs Tariff (PCT) headings, to facilitate clearance of exempted goods under ''Customs Administrative Reforms'' (CARE) project.

The CBR has also introduced a new Table (Local Supplies only) in the schedule to specify items on which sales tax exemption is available on local supply.

A major change in the ''Sixth Schedule'' is that GST exemption has been given on raw material and intermediary goods, manufactured or produced, and services provided or rendered, by a registered person, consumed ''in-house'' for the manufacture of goods, subject to sales tax.

Previously, exemption was available on raw material/ intermediary goods or services used by the sales tax registered manufacturer only.

Official sources told Business Recorder on Tuesday that a number of entries in the Sixth Schedule were not synchronised with the ''Customs Tariff'', which at times created problems for the importers as well as the assessing staff. Hence, there was need to make necessary amendments in the Sixth Schedule of Sales Tax Act, 1990 to make it compatible with the ''customs tariff''.

This had become all the more important in view of the ongoing complete automation of customs processes and procedures through Customs Administrative Reforms (CARE) project, whereby the assessment and clearance would be controlled by computer system.

The CBR has substituted the Sixth Schedule more clearly defining tariff classifications. Some of the exemptions were earlier available under SROs, which have now been included in the Sixth Schedule, officials added.

Under the new Sixth Schedule, to determine classification of any goods, the general rules for interpretation of the First Schedule to the Customs Act, 1969 (IV of 1969), and Explanatory Notes to the Harmonised Commodity Description and Coding System (relevant version) as amended from time to time, shall be considered authentic source of interpretation.

A comparison of both ''schedules'' shows that the new schedule is more comprehensive along with the respective PCT headings.

For example, the CBR has given a number of PCT headings to cover sales tax exemption to Live Animals.

GST exemption will be applicable to Live Animals covered under the PCT headings of 0101.1000, 0101.9000, 0102.1010, 0102.1020, 0102.1030, 0102.1040, 0102.1090, 0102.9010, 0102.9020, 0102.9030, 0102.9040, 0102.9090, 0104.1000, 0104.2000, 0105.1100, 0105.1200, 0105.1900, 0105.9200, 0105.9300, 0105.9900, 0106.1100, 0106.1200, 0106.1900, 0106.2000, 0106.3110, 0106.3190, 0106.3200, 0106.3900 and 0106.9000.

The CBR has made a separate column for fish and crustaceans, whether or not fresh, frozen or otherwise preserved. A complete list of PCT headings has been introduced in the Sixth Schedule for giving exemption to fish and crustaceans. Previously, fish was specified in the column dealing with the GST exemption pertaining to eggs, poultry and meat etc.

GST exemption will be available to pulses covered under the PCT headings including 0713.1000, 0713.2000, 0713.3100, 0713.3200, 0713.3300, 0713.3910, 0713.3920, 0713.3990, 0713.4010, 0713.4020, 0713.5000, 0713.9010, 0713.9020 and 0713.9090.

Similarly, PCT headings of other GST exempted items have also been specified in the Sixth Schedule.

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