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The Southern India Mills’ Association

Committed to Foster the Growth of the Textile Industry

Sales tax reduced for Pak textile, leather sectors

Pakistan’s Federal Board of Revenue (FBR) recently issued procedure for the textile and leather industries to avail reduced sales tax rate of 6 per cent by integrating their supplies with its online system. The facility would be available subject to certain terms and conditions and in case of failure, the FBR would impose a sales tax rate of 9 per cent.

FBR would notify integrated units and their outlets from where the units intended to sell the goods and avail reduced rate of sales tax. This integrated system provides full information on sales from each point of sales (POS) of a unit by generating online sales invoices and buyers details to verify in case of refunds and input or output adjustments, according to Pakistani media reports. To avoid misuse, FBR has incorporated a strong audit mechanism to check sales invoices. An integrated supplier, who is found to have tampered with the system or made sales otherwise than the prescribed devices or who contravenes any of the provisions, will no more be eligible for the reduced rate.