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FBR allows sales tax adjustment to Tier-1 retailers

FBR allows sales tax adjustment to Tier-1 retailers

ISLAMABAD: Federal Board of Revenue (FBR) allowed input adjustment of sales tax to Tier-1 retailers.

The FBR issued SRO 344(I)/2020 to amend SRO 1190(I)/2019 dated October 02, 2019.

The FBR allowed 95 percent input adjustment against output tax.

The FBR through SRO 1190(I)/2019 issued fresh list of sectors to allow input adjustment by amending the Section 8B of Sales Tax Act, 1990.

The following sectors were allowed input adjustment and refunds:

Persons registered in electrical energy sector, oil marketing companies and petroleum refineries, fertilizers manufacturers.

Persons making zero-rated supplies, including exports, provided that value of such supplies exceeds 50 percent of value of all taxable supplies in a tax period.

Distributors, gas distribution companies, tele-communication services, Pakistan Steel, Bin Qasim, Karachi.

Registered persons other than manufacturers, making supplies of items covered under the Third Schedule to the Sales tax Act, 1990, on which sales tax has been paid by the manufacturer or importer on retail price, provided that value of such supplies exceeds 80 percent of value of all taxable supplies in a tax period.

Commercial importers where value of import subject to 3 percent value addition as prescribed in Twelfth Schedule to the Act exceeds 50 percent of value of all taxable purchases, including imports, in a tax period.