Proposed budgetary measures of sale tax, FED

ISLAMABAD, Jun 12 (APP): Following are the proposed budgetary measures pertaining to the Sale Tax and Federal Excise Duty (FED) for FY 2026-27 Sales Tax measures:

RELIEF MEASURES:

..Grant of exemption from sales tax to magazines

..Extension in exemption on import of CKD for electric vehicles till 30.06.2027 ..Enhancement in scope of exemption on parts of aircrafts for import and lease by M/s PIACL

..Withdrawal of exemption of sales tax on family planning devices

..Abolition of tampon tax

..Exemption of sales tax to boost strategic investment in shipping

..Exemption to strategic imports for SCO summit and counter terrorism

..Exemption of sales tax on import of capital goods for upgradation and overhaul of existing refineries.

..Addition of new S. No. in the Sixth Schedule

..Extension in date of sunset for electric vehicles till 30.06.2027 2.

REVENUE MEASURES:

..Expansion of Third Schedule to ensure payment of sales tax at consumer price by the manufacturers at manufacturing stage

..Withholding of sales tax by the toll manufacturers from unregistered buyers ..Enhancement in scope of withholding sales tax by AOPs and individuals from unregistered persons

..Imposition/recovery of 3% VAT from the manufacturers if the imported raw material is sold in same state

..Rationalization of amount of penalty on certain offences and inclusion of three more offences in section 33 for imposition of penalty

3. STREAMLINING MEASURES:

..Insertion definition of advance receipt invoice, algorithmic settlement mechanism, electronic invoicing system, national faceless centre and production monitoring system

..Streamlining of definition tier-1 retailers. Inclusion of retailer having two hundred million or more annual turnover, in the category of tier-1 retailer

..Insertion of explanation to clarify the time of delivery of goods to the recipient

..Grant of power to Board to outsource the function of valuation of goods

..Addition of new proviso in section 6 to impose tax on steel sector on the basis of monthly electricity units consumed

..Addition of new proviso in section 8B to enhance or decrease limit of input tax adjustment

..Insertion of proviso in section 9 for adjustment through issuance of debit and credit notes electronically.

..Insertion of new section 11H for faceless audit and assessment.

..Substitution of sub-section (2) of section 21 to discourage fake/flying invoices and fraudulent activities.

..Substitution of sub-section (1) of section 23 for issuance of invoice against exempt supplies also.

..Insertion of new sub-section (8A) in section 25 for audit by the Chartered Accountant or Cost and Management Accountant Insertion of section 30AA – faceless jurisdiction ..Insertion of section 30DDDB for establishment of Directorate General (Field Compliance) by Inland Revenue

..Insertion of new section 32C for creation of  National Faceless centre

..Substitution of section (2) and (3) of 40C for production monitoring system and video analytic

..Addition of new sub-section (6) in section 40C for seizure and confiscation of goods without affixing tax stamps, stickers etc.

..Insertion of new section 40F for auction of confiscation goods

..Insertion of section 45C – faceless appeal procedure

..Insertion of section 47AA – Algorithmic Settlement Mechanism

..Insertion of section 47AAA – Independent case scrutiny committee

..Addition of new sub-section (3) of section 56B for maintaining centralized directory ..Addition of proviso under Twelfth Schedule to restrict sale of imported same state goods.

FEDERAL EXCISE DUTY:

RELIEF MEASURES

..Reduction in Federal Excise Duty on foreign travel

..Reduction in FED on import of acetate tow Rs. 44000 to Rs. 10000

..Removing Federal Excise Duty on WHO standard compliant sports/ electrolytes replenishing beverages

..Exemption to strategic imports of vehicle for SCO summit and counterterrorism ..Extension of Exemption on Import of CKD kits for electric vehicles for one year extended to 30.06.2027

REVENUE MEASURES:

..Imposition of FED at Rs. 16500 from Rs. 10000 per kg e-liquid for electronic cigarettes. This measure also remove the highest possible tariff of 65% of the retail price imposed under the previous regime.

..Imposition of FED on Naphtha, solvent oil and turpentine etc.

..Imposition of FED on luxury EVs and other Luxury Vehicles

..Imposition of FED on base oil, base lubricating oil in addition to lubricating oil

..Insertion of New Table 1A of the First Schedule to the Federal Excise Act, 2005 for imposition of FED on luxury imported vehicles

STREAMLINING MEASURES:

..Insertion definition of advance receipt invoice, algorithmic settlement mechanism, electronic invoicing system, national faceless centre and production monitoring system ..Addition of New Section 7A, for adoption of Faceless Audit and Assessment ..Substitution of Sub-Section (1) of Section 18 for issuance of invoice for dutiable and zero-rated supply of goods

..Substitution of Sub-Section (4) of Section 19 – penalty for destruction of goods without approval of the Commissioner.

..Substitution of Sub-Section (1) of Section 26 – seizure of counterfeited cigarette and beverages and other goods without tax stamp, barcodes etc.

..Substitution of Sub-Section (1) of Section 27 – seizure and destruction of counterfeited cigarettes and beverages

..Insertion of Section 34AA – establishment of Independent Case Scrutiny Committee ..Substitution of Section 45A of The Federal Excise Act, 2005 – monitoring or tracking by electronic or other means of excisable goods

..Insertion of New Sub-Section (3A) In Section 46, hiring of auditors or accountant for conducting for specialized where the Commissioner deem necessary on account of complexity of financial transaction

..Addition of new entry in Second Schedule to make FED levied on above mentioned petroleum products in VAT mode.