Under the Finance Supplementary (Amendment) Bill, 2018, the government expanded list of exempted items relating to cardiac surgery and other cardiac procedures as presently, there are 48 entries / item categories exempt under Table I of Sixth Schedule and further 52 item categories added on recommendations of Armed Forces Institute of Cardiology (AFIC). The added items include equipment for various procedures, stents, catheters, balloons, wires etc.
In the Sixth Schedule of the Sales Tax Act 1990, sales tax exemption has been granted to Optical Coherence Technology (OCT) System, OCT Catheters, intravascular Ultrasound (IVUS), Fractional Flow Reserve (FFR/IFR) System, IVUS/ FFR / IFR Catheters and wires, Support Micro Catheters (Straight and Angled), Drug Coated Angioplasty Balloon, Coronary and Peripheral Micro Coils, Thrombectomy Device, Thrombus Aspiration Catheters, Covered Stents (Coronary/Peripheral), Vessel Closure Devices, Embolic Protection Devices, Renal Stents, Vena-cava Filters, Coronary and Peripheral Snares, Athrectomy Devices, IABP Consoles & Catheters, Intracardiac Echocardiography Machine & Catheters, Wrist Bands for Radial Vessel Closure, Excimer Laser System with Accessories, Laser Sheath, Occlusion Balloons, Dilator Sheaths (Rotation & Manual), Intra Cardiac Echocardiography (ICE) System and Accessories, Lead Locking Devices and Accessory Kit, Remote EP Monitoring Device and Accessories, Ablation catheters, 3-D Cardiac Mapping System, Cryoballoon System and accessories, High-Flow, Low-Profile Percutaneous Heart Pump PHP Console and Catheters, Tandem Heart / Tandem Lung and Accessories, Ventricular Assist Device System. Heart Mate-II, Heart Mate-III, Centri Meg LEOV, Beating Heart Surgery stabilizers & Coronary Shunts, Minimally invasive surgery equipment & Instruments, RF Ablation equipment for AF (Surgical) & Heart Lung Machines, Left Ventricular Assist Device / System (LVAD) and Catheters, MitraClipTranscatheter Mitral Valve System, MitraClip Guide Catheter, Clip and Delivery System, Patent Foramen Ovale (PFO) Closure Device, Left Atrial Appendage (LAA) Occluder, Transcatheter Aortic / Heart Valve System (TAVI/TAVR), Cerebral Retrievable Stents, Aortic Stent Grafts, Embolization Coils, Delivery System, Filling Coil, Abdominal Aortic Aneurysm (EVAR) System and Accessories/ thoracic EVAR/ extension, Insertable Cardiac Monitor (ICM), Carotid Stents, Vascular Clips, MRI Compatible Cardiac Monitor, Infusion Pump, Anesthesia Machine with Accessories?; and Drug Eluting Peripheral Stents.
Through Finance Act, 2018, the sales tax on supplies of RLNG was reduced to 12% by adding an entry to Eighth Schedule. The objective was to avoid refund creation in case of gas distribution companies. The reason for refund creation was that on input side, sales tax on natural gas, including LNG, was 17%, whereas on output (supply) side, it was 17%, 5% and 0% (weighted average 12%).
The objective was to reduce input tax rate for gas distribution companies but the actual entry provided reduced rate for all supplies of RLNG, meaning thereby that output tax of gas distribution was also reduced, which was not the objective. Moreover, reduced rate also became available on purchase of RLNG by industries, which again was not the intention. The reduced rate now being made available only on supplies of RLNG / LNG to gas transmission and distribution companies.
Through the Finance Act, 2018, the import and supplies of potassium chlorate were subjected to composite rate of sales tax i.e. 17% + Rs. 40 / kg. Additional Rs. 40 /kg was in lieu of sales tax to be paid on supplies of match boxes which are manufactured from potassium chlorate. Simultaneously, the supplies of match boxes were exempted from payment of sales tax. Rs. 40 was calculated on the basis of price of potassium chlorate as prevailing at that time and now this price has increased. Accordingly, the rate has now been revised upwards to 17% + Rs. 65 / kg. This has been done on the recommendation of Pakistan Match Manufacturers Association.
The FBR has also done rationalization of exemption on LED / SMD lights. The energy saver lamps are already exempt under Sixth Schedule without any condition. The LED / SMD lights are more energy efficient than energy savers and SMD lights is a sub-category of LED lights.
The LED / SMD Lights exempt under both Table 1 (Both imports and local supplies) and Table 3 (Imports only) Sixth Schedule but conditionally. The Table 1 exemption available only if usable for renewable energy sources only such as wind / solar etc. Table 3 exemption available for both i.e. for use with renewable energy sources and for conservation of energy. The exemption has now been provided to local supplies of LED/SMD lights meant for conservation of energy.