FBR Exempts Customs Duty on Import of Sugar

The Federal Board of Revenue (FBR) has exempted customs duty on the import of 500,000 metric tons of sugar whereas reduced sales tax rate from 18 percent to 0.25 percent and 0.25 percent withholding tax on the import of commodity by the Trading Corporation of Pakistan (TCP) or private sector.

The FBR has also exempted 3 percent minimum value added tax (VAI) on the import of sugar having quantity of 500,000 metric tons.

The FBR has issued three notifications i.e. SRO.1215(I)/2025, S.R.O. 1216(I)2025 and SRO.1215(I)/2025 on Wednesday.

According to S.R.O. 1216, the FBR has amended Second Schedule of the Income Tax Ordinance.

Pursuant to the Cabinet Decision, the withholding tax under section 148 shall be collected at the rate of 0.25 percent of the value of commercial import of while crystalline sugar up to Rs 500,000 metric ton in aggregate subject to the following conditions:

• The import of sugar shall be carried out by Commerce Division through Trading Corporation of Pakistan (TCP) or private sector subject to conditions, limitations and quota allotments for immediate and subsequent requirements during the specified period.
• The Commerce Division shall ensure quality assurance of the imported sugar through an international inspection firm; and
• The cut-off date for import of sugar to avail exemption under this notification shall be September 30, 2025.

The S.R.O. 1217(I)/2025 has reduced the rate of sales tax from 18 percent to 0.25 percent and exempt the minimum value added tax (VAI) at the rate of three percent, as specified under the Twelfth Schedule to the Sales Tax Act. 1990 on import and subsequent supply of white crystalline sugar up to 500,000 metric tons by Trading Corporation of Pakistan (TCP) or private sector subject to the above-mentioned conditions.

Under SRO.1215(I)/2025, the FFBR has exempted customs duty on the sugar, falling under the respective PCT Code.