General sales tax on processed food stuff abolished

ISLAMABAD (June 11 2003) : Withdrawing central excise duty (CED) on the incoming international telephone calls, the government has taken away 15 percent central excise duty (CED) collected as sales tax by Pakistan Telecommunication Company Limited (PTCL) under agreement with foreign telecommunication companies from July 1, 2003.

The government has also abolished general sales tax (GST) on processed foodstuff, including cereals/grains, cheese, cream, and levied sales tax on the import of cheque-books.

To facilitate the domestic printing industry, GST was already applicable on local cheque books which has been extended to bring import of this item into GST net.

The Central Board of Revenue (CBR) has amended Sixth Schedule of Sales Tax Act, 1990 to extend GST exemption to both unprocessed and processed foods stuff.

GST exemption would also be levied on supply of fixed assets against which the input tax adjustment is not available under relevant notification.

Giving another major relief to general masses, the government has exempted local supply of imported artificial kidney, eye cornea, hemodialysis machines, hemodialyzers, A V fistula needles, hemodialysis fluids and powder and blood tubing tines for dialysis.

Moreover, double lumen catheters for dialysis, catheter for renal failure patient and peritoneal dialysis solution have also been exempted from sales tax.

A senior tax official told Business Recorder here on Tuesday that the government has taken some important measures to give benefit to the small businessmen particularly retailers.

The scope of retailers has been extended to the manufacturers, importers and producers.

Now, importers, manufacturers and producers can also conduct business as retailers.

They can combine any other business with retail, but such businessmen are required to give separate prices of wholesale and retail.

Responding to newly introduced section 40B, he said that the amendment would empower the tax authorities to post an officer of sales tax (not auditor) to the premises of registered persons involved in tax fraud or evasion to monitor his production, sale and stock position.

He said that the powers would be used only in cases where it is suspected that a person is involved in tax evasion.

Sales tax officer would temporarily monitor business of such persons.

As far as blacklisting of a person is concerned, he said that when CBR would blacklist a persons, it would convey to other businessmen that they should not conduct business with the suspected persons.

Giving another major relief to local industries, the CBR has allowed input adjustment on purchase of appliances for taxable activity, wire and cables for industrial purposes and crockery, cutlery and utensils purchased for providing taxable services.

When asked about the fixation of minimum sales tax, he said that the government would hold meetings with small traders to mutually work out the modus operandi for charging minimum sales tax on small businesses.

The CBR has amended section 11 to introduce concept of fixation of minimum sales tax.

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