ISLAMABAD, June 7: The government has levied 20 per cent general sales tax (GST) on import of edible oil seeds and 39 raw materials, sales tax exempted on local procurement of machinery and equipment by the oil and gas sector, enhanced turnover tax threshold from Rs5 million to 20 million and allowed zero rating of sale tax on import of high quality agriculture products and import of machinery used in purification of water.
Through the finance bill 2003-04, the government has withdrawn sales tax on import of kidney, double lumen catheter for dialysis, catheter for renal failure patient and peritoneal dialysis solution.
The government has levied 20 per cent GST on edible oil seeds including soybean, rape-seed, sunflower seeds, palm nuts and kernels, safflower seeds and canola seeds. The same rate of 20 per cent GST would apply on oil produced from such seeds but the end products – ghee and cooking oil – would remain liable to GST at 15 per cent.
To promote investment in purification, desalination of water resources and treatment of industrial wastes/effluents, the sales tax was exempted on relevant machinery and equipment.
The government has also withdrawn sales tax on local purchase of jeep and vehicles and defence equipment by the defence ministry.
To done away with the anomaly the government exempted from sales tax local supply of machinery and equipment by the oil and gas sector to promote local production.
The government has increased the turnover threshold from Rs5 million to Rs20 million per annum to facilitate registration of small traders. A defined set of parameters would be notified to compute the turnover and tax liability of small and medium enterprises up to the enhanced monetary limits.
Through the finance bill the government has withdrawn the GST on the machinery and equipment for use in the highly value added exportable goods. The main beneficiaries would be quality polished/graded rice, value-added miller, preserved vegetable and horticultural produce, dressed and prepared fish and livestock product, preserved, sorted and graded fruits.
The government has also reduced the rate of additional tax from 2 per cent to 1 per cent per month besides reduction in penalty for late filing of return from Rs5000 to Rs100 per day for the first 15 days after the notified date for filing for return.
The mandatory deposit of full adjudged amount of taxesbefore filing of appeal was also reduced to only 25 per cent. However, the appellate authority could stay the recovery.
The limit of mandatory payment of sale proceeds within a period of 120 days was substituted so that the payment of sale proceeds through the banking instruments was only confirmed to the payment of the amount of sales tax.
For settlement of past liability, the government has also announced that the person who have been registered either voluntarily or compulsorily with effect from July 1, 2000 would now be liable to pay turnover tax at 2 per cent on the basis of their declaration with income tax authorities for the financial year 2000-01 and 2001-02 without any additional tax and penalty.
Moreover, all business persons who get registered up to September 30, 2003 would pay turnover tax at 2 per cent only for one year and no question would be asked about past liabilities.
The government has also allowed duty drawback under DTRE on duty paid inputs purchased domestically.
The concessional importers of raw materials and component for assembly and local manufacture of goods would be obliged to keep full records and made sales only to registered persons. The incidence of further tax was never meant to be allowed as input adjustment.