Following are the proposed budgetary measures pertaining to Sales Tax and Federal Excise Duty (FED) for FY 2024-25:
– Withdrawal of various exemptions/zero rating and reduced/fixed rates.
– Mobile phones to be taxed at standard rate (other than mobile phones valuing exceeding US$ 500 which will remain chargeable to existing rate of 25%).
– Enhancement in reduced rate of sales tax from 15% to 18% on supplies made by the POS retailers dealing in leather and textile products.
– withholding regime for lead, coal, scrap of paper and plastic, silica etc.
– Iron and steel scrap to be exempted from levy of sales tax.
– A phased withdrawal of exemption granted to ex-FATA/PATA.
– Board empowered to fix minimum price of the goods falling under Third Schedule.
– Streamlining and strengthening the provisions related to tax fraud.
– Changes in the legal provisions related to assessment and audit.
– Zero-rating of petroleum products is being converted into exemption.
– Rate of default surcharge is to be aligned with the SBP?s policy rate of KIBOR plus 3%.
Federal Excise Duty
The proposed budgetary measures pertaining to Federal Excise Duty (FED) for FY 2024-25 are:
– Imposition of FED on acetate tow @ Rs. 44,000 is proposed.
– Imposition of FED on nicotine pouches @ Rs. 1200 per kg.
– Enhancement of FED on e-liquids is also proposed.
– FED @ Rs. 15 per kg on supply of sugar to manufacturers.
– The rate of FED on cement is being enhanced from Rs. 2 per kg to Rs. 3 per kg.
– FED on commercial properties and first sale of residential properties @ 5%.
– Rate of FED on filter rod to be enhanced from Rs.1500 per kg to Rs.80,000 per kg.
– power to seal business premises of retailers selling illicit cigarettes.
– Exemption from FED to diplomats and diplomatic mission.
– Price threshold for local manufactured cigarettes increased from Rs. 9,000 to Rs.12,500.
