Exemptions from Duties and Taxes Extended for another 3 Months

The government has agreed to extend COVID-related products taxes and duty exemptions for a further three months, i.e. from October to December 2020, official sources told Pak Revenue.

Sources suggested that in a summary submitted by the Ministry of National Health Services, Regulations & Coordination, through the Revenue Division, the Federal Cabinet approved the exemption from duties and taxes on imports for a period of three years of 61 goods/items intended for the prevention and treatment of Covid-19.

Accordingly, three SROs have been released by the Ministry of Finance & Revenue and the FBR, thus promulgating exemptions for a duration of three months from the date of issuance of the aforementioned notifications, i.e. from 20 March to 19 June 2020, with the stipulation that, on the advice of the Ministry of NHSR&C, the said period may be extended for a further period of three months if the adverse circumstances affect the Board.

As a result of the ongoing surge of Covid-19 and at the request of the Ministry of NHSR&C of the FBR on 19 June 2020, the exemption period was extended for a further period of three months, that is to say, from 20 June to 30 September 2020, following the requisite approval of the Federal Cabinet sought by the FBR.

Following the prevalence of the pandemic, the FBR was again approached by the Ministry of National Health Services, Regulations & Coordination for extension for a further three months during the exemption period, i.e. from October to December 2020.

However the FBR replied that prior to the issuance/extension of any SRO/notification relating to the exemption of duties and taxes on imports of products, approval of the Cabinet is mandatory, and therefore instructed the MNHS&C to obtain the approval of the Federal Cabinet.

In compliance with Rule 16(1) (d) of the Rules of Business 1973, the Ministry sought approval by the Federal Cabinet for the extension of SROs 555(1) & SRO 556(1) pursuant to the Customs Act 1969 and the Sales Tax Act 1990 from 01 October 2020 to 30 June 2021 and for the extension of the exemption from withholding income tax from 01 October 2020 to 30 August 2021 by amendment to Clause (12B) of Section IV of the Second Schedule.

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