ISLAMABAD: The Federal Board of Revenue (FBR), against the decision of the Economic Coordination Committee (ECC), has increased the sales tax on imported cotton from 5 to 10pc, sources revealed on Saturday.
The ECC, in its meeting held on December 30, 2019, approved the withdrawal of 3pc regulatory duty, 2pc additional customs duty and 5pc sales tax on imported cotton from 15th January 2020.
The committee had made this decision on the information provided during the first Cotton Crop Assessment Committee meeting (October 4, 2019), in which it was briefed that against the target production of 15 million bales of cotton for the fiscal year 2019-20, cotton production at the year-end would be 10.20 million bales.
The ECC was also briefed that the bulk of the cotton would be lifted from the local farmers by 1st of January 2020 and the given exemption would not adversely affect the interests of the local farmers. Moreover, the ministries of commerce and national food security & research had also assured the ECC that the import shall facilitate the textile sector exports which are showing a rising trend.
On the other hand, the tax machinery, despite the ECC’s orders, has increased sales tax on imported cotton.
According to sources, the ECC does not has the power to reduce or withdraw the tax; this can only be done through a finance bill or ordinance.
Besides this, sources informed, the government has also increased sales tax up to 17pc on packed branded fish, cow, poultry and goat meat through the recently promulgated ordinance. However, if the meat was sold without packaging and branding, the said tax would be exempted.