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The Sales Tax Committee, one of the three committees constituted by the government last week to facilitate talks and resolve issues facing the business community, has dispelled the fears of retailers and business community which has the misperception that the imposition of 0.3% bank withholding tax would show their actual turnover which may exceed Rs 5 million and they would be forced to be registered for the sales tax regime.
“For retailers, there is nothing to worry about on this count as the government has already introduced a new sales tax regime vide SRO 608/2014 which instead of applying the Rs 5 million turnover as yardstick for mandatory registration of sales tax, introduces different categories under which the sales tax regime is applicable,” said senior FBR officials while responding to apprehensions of the retailers and business community during the 2nd meeting of the Sales Tax Committee held at the FBR House Islamabad on Thursday.
The meeting attended by office-bearers and representatives of various chambers and trade bodies was told that under the SRO 608(I)/2014 dated July 2, 2014, the federal government had revamped the entire system of sales tax for retailers. Under the new regime, different categories have been introduced for the registration of retailers, which included a retailer operating as a unit of a national or international chain of stores; a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks; and a retailer whose cumulative electricity bill during the immediately preceding 12 consecutive months exceeds Rs. 600,000. Any retailer who does not fall in any of these categories would only pay sales tax on his electricity bill and would not be bound to register for the sales tax regime.
Earlier, the meeting held with Rana Muhammad Afzal Khan, MNA & Parliamentary Secretary Finance, in the chair as Convener of the Committee, had detailed interactive sector-to-sector sessions with representatives of Sugar, Oil & Ghee, Cement and Embroidery sectors. Various proposals and recommendations were discussed and the representatives of these sectors were asked to fine-tune their proposals and present comprehensive sector-based recommendations to the Committee in its forthcoming meetings.
The Committee would again meet tomorrow (Friday) at 10:30am at the FBR House to meet with representatives of Iron & Steel, Chip Board & Plywood, Yarn & Fiber, Ready-Made Garments & Clothing and Oil & Lubricants sectors.