Govt hikes GST on more luxury items to woo IMF

Prime Minister Shehbaz Sharif-led federal cabinet on Tuesday approved the imposition of 25 per cent sales tax on luxury items, fulfilling another condition set by the International Monetary Fund (IMF) for the revival $7 billion Extended Fund Facility (EFF) stalled for months.

The cabinet approved 25pc general sales tax (GST) on luxury items through a circulation summary. The formal notification will be issued by the Federal Board of Revenue in the coming days,

The summary approval was taken from the circulation for the notification of 25 pc ST from the federal cabinet. Now the Federal Board of Revenue (FBR) will issue a notification and the new rate will be applicable from March 1.

The items on which 25pc GST was imposed included aerated water and juices, imported cars, mobile phones, cat and dog food, sanitary and bathroom wares, carpets (excluding Afghanistan), chandeliers and lighting devices or equipment, chocolates, cigarettes, confectionary items, corn flakes etc, cosmetics, shaving items, tissue papers, crockery, decoration/ornamental devices, doors and window frames, fish, footwear, fruits and dry fruits, furniture, homes appliances (CBU), luxury leather jackets and apparels, mattress and sleeping bags, frozen or processed meat, mobile phone (CBU), musical instruments, arms and ammunition, shampoos, sun glasses, tomato ketchup and sauces, travelling bags and suitcases.

The federal government also slapped 25 percent GST rate on locally manufactured luxury vehicles of 1,400cc and above.

The FBR has estimated that it will collect Rs15 billion in additional taxes through the enhanced GST rate of 25 percent in the four-month period.

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