GST not to be imposed on bricks and cement blocks

ISLAMABAD (May 25 2003) : The Central Board of Revenue (CBR) has rejected a major proposal of International Monetary Fund (IMF) to slap 15 percent general sales tax (GST) on bricks and cement blocks, officials engaged in budget exercise told Business Recorder here on Saturday.

The government is planning various concessions for attracting investment in housing and construction sector; hence GST exemption on bricks and cement blocks will remain intact in the budget 2003-04.

Sources said that the CBR is not considering any proposal to levy GST on the above-mentioned items to broaden the scope of sales tax regime.

The move to levy GST on these products would directly hit the construction industry throughout the country.

When asked whether the authorities would incorporate this IMF proposal in the coming budget, the concerned officials said, “Let me assure you that the government would not impose GST on the above-mentioned products.”

IMF has proposed that imposition of GST on bricks, cement blocks, computer hardware/software would not add to the tax burden on registered taxpayers and would ensure that consumption by other persons is taxed.

The IMF mission was of the view that a number of goods like computer hardware/software, real property and services that are generally included in the VAT mode of many countries do not fall in the purview of central and provincial sales tax in Pakistan.

The rationale for removing a number of current exemptions including bricks and cement blocks was discussed extensively in the previous reports of Fiscal Affair Division (FAD), the mission added.

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