ISLAMABAD: The Federal Board of Revenue (FBR) has declared that gas generators imported under SRO 549(1)/2008 are liable to sales tax at the time of their subsequent supply. The board has issued instructions to the Chief Commissioners of the Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) in this regard.
According to the FBR’s instructions, as per statement of companies, the gas generators have been imported by availing zero-rating under SRO 549(1)/2008 dated June 11, 2008. Now serial No 4 of the said notification stands omitted vide SRO 230(1)/2011 dated March 3, 2011. As such, imports and supplies of plant, machinery and equipment are no longer zero-rated under the said notification. Similarly as far as exemption under SRO 727(1)/2011 dated August 1, 2011 is concerned, it is not a linked to SRO 549(1)/2008 dated June 11, 2008, but is a separate and independent notification granting conditional exemption on import of plant and machinery. Condition (iv) of this notification only relates to liability of tax on the subsequent supply of plant and machinery imported thereunder. It cannot be construed as granting exemption to plant, machinery and equipment imported under any other notification.