Sales tax zero-rating facility has been withdrawn from woven fabrics obtained from strip and the like; made up fishing nets; monofilament, sun shading, nylon fishing net, other fishing net, rope of polyethylene and rope of nylon, tyre cord fabric. The government would allow sales tax exemption on Cinematographic film exposed and developed from June 14, 2009.
Sales tax exemption would be available on tractors, bulldozers and combined harvesters; and components (which include sub-components, components, sub-assemblies and assemblies, but exclude consumables) imported in any kit form and direct materials for assembly or manufacture thereof. Sales tax exemption would also be applicable on the local supply of ware potato and onions. However, sales tax exemption has been withdrawn on the import of ware potato and onions.
Sales tax exemption has been granted on the import and local supply of Lysine Sulphate to provide cheaper raw material to poultry industry. Sales tax exemption has also been provided on the import and supply of wheel chairs. The government has levied 20 paisa per SMS in addition to the rate specified for telecom sector. On three different brackets for imposing tax on cigarettes, the FBR has proposed Rs 4.75 per ten cigarettes as FED on retail price of packet up to Rs 10.
On retail price from Rs 10 to 19, the FED at the rate of Rs 4.75 per ten cigarettes will be charged plus 70 percent over every incremental rupee. On retail price of over Rs 19 per packet, 64 percent FED will be levied. The indenting commission is proposed to be taxed at the rate of 5 percent from earlier rate of 1 percent. The scope of advance tax collection on purchase of new locally manufactured motorcar/jeep is proposed to be extended to all types of motor vehicles in the Finance Bill 2009-10. Additional tax has been enhanced from 12 percent to 15 percent on late payments.
At present, depreciation on passenger transport vehicles is allowed on total cost, which has encouraged the purchase of luxury vehicles mainly used for personal purposes at the cost of revenue. It is, therefore, proposed to restrict the value of such vehicle to Rs 1.5 million for the purpose of depreciation.
Presently the large trading houses are exempted from payment of withholding tax on imports as well as sales of goods. The facility of exemption of tax at import stage is being withdrawn. However, the tax so collected will be adjustable against final tax liability.
Tax exemption available to educational institutions is being grossly misused by private universities and medical colleges etc. It is therefore proposed that such facility would only be available to those institutions which have been approved by the concerned Director General of LTU/RTO for this purpose.