The Federal Board of Revenue has imposed the standard rate of 16 percent sales tax on the import of tea and polypropylene and polyethylene, according to two different notifications issued here on Thursday. Sources told Business Recorder here on Thursday that the FBR has withdrawn the concessionary rate of 5 percent sales tax on tea and imposed standard rate of 16 percent sales tax on the commodity.
Tea manufacturers failed to pass on the benefit of major reduction in sales tax to consumers during the last six months. The second commitment made by tea industry was that the smuggling would be controlled due to reduced rate of sales tax. However, smuggling of tea continues despite applicability of lower rate of sales tax. The legal import of the commodity has also not increased during the last six months.
The FBR has withdrawn sales tax exemption on the import of Polypropylene and Polyethylene and imposed a standard rate of sales tax on these products. The sales tax exemption would not be available on the import of Polypropylene and Polyethylene for manufacture of monofilament yarn for supply of net cloth to green house farming. The third SRO on imposition of 2 percent sales tax on every stage of textile sector is ready and would be issued any time, sources said.
