ISLAMABAD - The Federal Board of Revenue (FBR) on Friday imposed two percent additional general sales tax (GST) on household electronics, gas appliances, biscuits, confectionary items, chocolates, toffees and candies that would increase the 0prices of these commodities in the country.
According to the notification issued here, the FBR has imposed two percent additional GST on more than 40 commodities which are already paying 17 percent general sales tax.
The FBR has imposed two percent additional GST on household electrical goods, gas appliances and many other commodities. Market sources said prices of all electronics would increase due to the imposition of the additional GST and also sharp rupee depreciation against US dollar.
According to the notification, the FBR levied additional tax on biscuits, confectionaries, chocolates, toffees and candies. Meanwhile, the tax department has also imposed additional GST on household electrical goods, including air-conditioners, refrigerators, deep freezers, televisions, recorders and players, electric bulbs, tube-lights, fans, electric irons, washing machines and telephone sets. Similarly, the tax department has imposed additional sales tax on household gas appliances, including cooking ranges, ovens, geysers and gas heaters.
The government has imposed additional two percent GST on foam or spring mattresses and other foam products for household use. The other commodities include auto parts and accessories sold in retail packing, lubricating oils, brake fluid, transmission fluid and other vehicular fluids and maintenance products in retail packing. Similarly, the government has also levied the additional GST on tyres and tubes, storage batteries, arms and ammunition, paints, distempers, enamels, pigments, colours, varnishes, gums, resins, dyes, glazes, thinners, cellulose lacquers and polishes sold in retail packing.
However, the FBR has reduced sale tax on fabrics from 5 to 3 percent. It has also allowed one percent withholding sales tax rate on purchases from unregistered persons instead of the existing 17 percent under SRO 505 (I) 2013.
The FBR has also issued other notifications according to which rate of withholding tax on goods transport vehicles under Section 234 of the Income Tax Ordinance, 2001, has been reduced from Rs 5/kg of the laden weight to Rs 3/kg. Similarly, the condition of provision of computerised national identity card number (CNIC), national tax number (NTN) and addresses of retailers under Section 236-H to be provided in the withholding statement under Section 165 of the Income Tax Ordinance, 2001, has been waived.
Later, the FBR issued an explanatory note, stating no new tax on household gas and electrical appliances had been imposed. “These goods were chargeable to sales tax on retail price basis. Sales tax on retail price basis means that sales tax of the complete chain from manufacturer to retailer is paid upfront by the manufacturer. This business community approached FBR on the ground that this system has posed many practical problems for them and requested the authorities to do away with charging sales tax on retail price basis and in its lieu agreed to pay 2% additional sales tax (worked out on the basis of actual value addition from manufacturer till retailer) on all these items. This is, therefore, not a new tax or enhancement of existing rate, but only collection of tax which even otherwise was payable by the supply chain.”
“The news item regarding imposition of 2pc additional sales tax on household gas and electrical appliances, ceramic tiles, tyres, foam & mattresses, auto parts, confectionery items is based on misinterpretation of SRO896(I)/2013 issued on 4th October 2013,” The FBR clarification added.