Through Finance Bill 2017, in order to enable industrial consumers to avail input tax adjustment on lubricating oils purchased from the traders, the entry relating to lubricating is being omitted from Chapter XIII of the Sales Tax Special Procedures Rules, 2007, thus withdrawing the levy of 2% sales tax on lubricating oils. The government has also announced reduction in sales tax at the rate of 50% is available on import of Hybrid Electric Vehicles up to 1800cc and at the rate of 25% on Hybrid Electric Vehicles exceeding 1800cc. It is proposed to maintain reduction in sales up to 1800cc and restrict reduction at the rate of 25% on engine capacity from 1801cc to 2500cc only. Similar reduction is proposed to be provided on local supply of the said two categories of Hybrid Electric Vehicles.
Due to complications in payment of subsidy to fertilisers manufacturers and importers, the subsidy is proposed to be substituted with reduction in sales tax rates on various fertilisers. Instead of ad valorem rates, specific rates have been proposed. However, the rate on urea fertiliser shall remain unchanged at 5% ad valorem.
Existing exemption available to items for renewable sources of energy is proposed to be aligned with exemption available to these items under the Customs Act, 1969. Exemption from sales tax is proposed to be provided to items for conservation of energy on the pattern of exemption available under the Customs Act, 1969.
Exemption from sales tax on imported seeds for sowing. Presently, imported oil seeds are subject to sales tax @ 5% under Eighth Schedule. Exemption from payment of sales tax is being provided on import of sunflower and canola hybrid seeds meant for sowing. Sales tax on import of seven types of poultry machinery is proposed to be reduced to 7%. Exemption from sales tax on agriculture diesel engine. Sales tax on agricultural diesel engines (from 3 to 36 HP) is proposed to be exempted.
Under the revised customs tariff regime, the government has reduced duty from 11% to 3% and removed 5% RD on, grandparent and parent stock of chicken, reduction of duty on import of hatching eggs from 11% to 3%, Reduction of RD on aluminium waste or scrap from 10% to 5% ,Exemption of 3% CD on raw skins & hides, Exemption of 16% CD on stamping foils, Reduction of CD on sheets for veneering rom 16% to 11% Reduction of CD on pre-fabricated modular clean rooms panels from 20% to 3% ,Exemption of 3% CD on import of ostriches, Reduction of CD on fabric (non-woven) for pharmaceutical industry from 16% to 5%.
In order to protect local industry, the government imposed 5 percent RD on import of synthetic filament yarn (of polyesters), increased CD on aluminium beverage cans from 11% to 20%, CD reduced on uncoated polyester film and aluminium wire from 20% to 11% for manufacturers of metalised yarn and CD reduced from 20% to 16% and from 16% to 11%, on raw materials for manufacturers of Baby Diapers.
The CD rate on Bituminous coal and other coal equalised @ 5%. However, for the Power Projects in IPPs Mode, CD on import of both types of coal reduced to 3 percent. Separate PCT code for compressors of vehicle @ 35% CD created and separate PCT code for classification of electric cigarettes created at 20% CD. The government levied RD @ 10% on animal protein meals.
The government has granted exemption from sales tax on premixes to fight growth stunting. It is proposed to provide for exemption from sales tax on premixes to fight growth stunting. Under the relief measures, the rate of withholding income tax for mobile phone subscribers has reduced from 14% to 12.5%. For return filers, the withholding tax on registration and transfer of motor vehicles having engine capacity up to 850cc, 851cc to 1000cc and 1001cc to 1300 cc is being reduced from existing Rs 10,000, Rs 20,000 and Rs 30,000 to Rs 7,500, Rs 15,000 and Rs 25,000 respectively. Continuing with the policy of reducing corporate tax rates, the rate has been reduced further from 31% to 30% for the Tax Year 2018.
Copyright Business Recorder, 2017