The Federal Board of Revenue (FBR) will charge an additional 3 percent sales tax (further tax) on supplies made to unregistered retailers and distributors of the pharmaceutical sector.
According to a clarification issued by the FBR to the pharmaceutical sector on Thursday, the industry raised a question of what rate of tax should be charged to unregistered persons as most of the retailers/distributors are unregistered. (1%+ 3% further tax).
The FBR said that as per Sr. No 81 of Table-I of the Eighth Schedule to Sales Tax Act, 1990 manufacture or import of substances registered as drugs under the Drugs Act, 1976 shall charge sales tax at the rate of 1 percent. This is subject to the conditions that: (i) Tax charged and deposited by the manufacturer or importer, as the case may be, shall be the final discharge of tax in the supply chain (ii) No input tax shall be adjusted by the manufacturer or importer. Moreover, as per section 3(1A) of the said Act further tax at the rate of 3 percent shall be charged, levied, and paid where taxable supplies are made to a person who has not obtained a registration number or he is not an active taxpayer.
The second question was that the tax has been imposed on drugs manufactured and registered under The Drugs Act, 1976 so what will be the rate of sales tax on drugs registered under the DRAP ACT, 2012?
The FBR said that as per Sr. No 81 of table-I of the Eighth Schedule to Sales Tax Act, 1990 reduced rate of sales tax at the rate of 1 percent is available subject to conditions that: (i) Tax charged and deposited by the manufacturer or importer, as the case may be, shall be the final discharge of tax in the supply chain (ii) No input tax shall be adjusted by the manufacturer or importer. It is clarified that only drugs registered under the Drugs Act, of 1976 are entitled to a reduced rate of 1 percent whereas no exemption/ reduced rate is available for any other drugs.
The third question was for FBR to clarify whether medicines are not covered under the Drugs Act 1976. The FBR was of the view that the medicines not registered under the Drugs Act 1976 are chargeable to a standard rate of sale tax at the rate of 17 percent and all applicable provisions of the Sales Tax Act, 1990 apply accordingly.
government Universities apply 20% sales tax on import goods government Universities funded by HEC can any one raise this meter government Universities have limited funds so please.