Rs45bn GST exemptions under scrutiny

SOHAIL SARFRAZ

ISLAMABAD: The government is reviewing Rs45 billion tax exemptions granted to erstwhile tribal areas in the coming budget (2025-26).

It is learnt that the Federal Board of Revenue (FBR) is likely not to extend sales tax exemption to erstwhile tribal areas beyond June 30, 2024.

Through Finance Act, 2024 exemption available to ex-FATA/PATA (import/ supply of goods and supply of electricity) was retained till June 30, 2025.

However, the exemption on import shall be available subject to presentation of pay order instead of post-dated cheque which would be released on furnishing (within six months) of the consumption/installation certificates issued by the concerned Commissioner.

During last meeting of the Senate Standing Committee on Finance and Revenue, the committee had endorsed a proposal of the business community for not extending sales tax exemption in erstwhile tribal areas beyond June 30, 2025.

The sales tax exemption to erstwhile tribal areas would expire on June 30, 2025.

The chairman of the committee, Saleem Mandviwalla was of the view that the formal sectors such as steel, ghee/cooking oil and others have disadvantageous position due to this exemption.

“We are well aware of the issue and taken the decision and we will make recommendation,” he added.