The government started the implementation of the mini-budget late Tuesday night by raising the sales tax rate from 17 to 18 percent and 150 percent raise in the rates of the Federal Excise Duty on cigarettes from Feb 14, 2023.
In this connection, the Federal Board of Revenue (FBR) issued an SRO.178(I)/2023 on Tuesday night.
The imports from midnight Tuesday would be subjected to an 18 percent sales tax.
FBR has notified an increase in the standard rate of sales tax from 17 to 18 percent from February 15. In this regard, the regulator issued a notification on Wednesday.
According to the S.R.O. 179 (1)/2023 issued on Wednesday, in the exercise of the powers conferred by clause (b) of sub-section (2) of section 3 of the Sales Tax Act, 1990, the Federal Government has enhanced the rate of sales tax in respect of taxable goods falling within the purview of sub-section (1) of section 3 from seventeen percent under sub-section (1) of section 3 of the Sales Tax Act, 1990 to 18 percent, it added.
According to the notification, under the first slab of cigarettes, locally produced cigarettes if their on-pack printed retail price exceeds Rs. 9,000 per 1,000 cigarettes, the rate of the federal excise duty would be Rs. 16,500 per thousand cigarettes.
Under the second slab, the locally produced cigarettes if their on-pack printed retail price does not exceed Rs. 9000 per thousand cigarettes, the rate of the FED would be Rs. 5050 per thousand cigarettes, the notification added.
FBR has the legal authority to issue notifications to change the duty structure at the import stage after approval from the cabinet.
It is a bit confusing as to from which date this SRO will apply. SRO has date of 14th Feb but it was issued late at night. So will it be applicable from 15th Feb or 14th Feb.