ST schedules

Question 1

Taxation for the import of plant, machinery equipment and raw material? is there any conditional taxation attached to it?

Answer 1

The below items are included in 6th schedule so import is exempt.

1. import of plant, machinery, equipment
   for installation in tribal areas and of industrial inputs by industries located in tribal areas till 30 June 2025.

Conditions
(a) Import shall be allowed clearance on
presentation of pay order which will be released after presentation within
6 months of consumption or installation certificate.

(b) Goods imported by
hospital run by nonprofit making institutions subject to zero percent
custom duty

2. import of plant, machinery, equipment and raw materials for:
   (i). exclusive use within limits of EPZ/ Gawadar Free Zone
   (ii). for consumption of these items within
   special technology zone
   (iii). by registered person
   authorized under export facilitation
   scheme,2021 notified by Board.
3. import of machinery, equipment and other project related items for:
   (i). setting up of hotels, power generation
   plants, water treatment plants
   located in area of 30km around the zero
   point in Gwadar

(ii). Initial installation, BMR or expansion of
projects for power generation through
hydel, oil, gas, coal, nuclear and
renewable energy.

(iii). Manufacture/assembly of electric vehicles or one time.
conditions
The above exemptions will be granted subject to following conditions:
(i). Items are not locally manufactured
(ii). CEO undertaking that above items are
bonafide project requirement.
(iii). Goods not to be sold without prior approval of FBR

4. Construction machinery, equipment and specialized vehicles excluding passenger
   vehicle imported on temporary bases as
   required for construction of project.

Supply of Construction material to Gwadar Export Processing Zone

Question 2

taxation for import and supply of bovine semen

Answer 2

6th schedule item therefore import and supplies are exempt
no further conditions

Question 3

taxation for iodized salt?

Answer 3

(i) Import & Supply of iodized salt bearing brand names and trademarks whether
or not sold in retail packing. is exempt under 6th schedule.

Question 4

taxation for liquified natural gas?

Answer 4

Import of LNG by by fertilizer manufacturers as feed
stock. is exempt under 6th schedule.

Question 5

Taxation for gold

Answer 5

import of gold under SRO 760(I)/2013-Import and export of precious
metals order, 2013 is exempt under 6th schedule.

No VAT is added to import of Gold and silver in unworked condition

Supply of locally manufactured article
of jewelry, or parts thereof of precious
metal or of metal clad with precious metal:
3% at reduced rate at 8th schedule.

No input adjustment will be
allowed to jewelers.

Import of jewelry articles and
their onward sale will be subject to 25%
sales tax.

Question 6

Taxation for Electric vehicles?

Answer 6

1. Import of CKD kits by
   Local manufacturers is exempt under 6th schedule of following vehicles.

(i). Small cars/SUV with 50 Kwh battery or below

(ii). Light commercial vehicles with 150 Kwh battery or below

(iii). Three wheeler electric
rickshaw/loader

(iv). Electric
motorcycle/buses/trucks

2. Import of electric vehicles in CBU with condition of 50KW battery or below shall be charged under Eighth schedule at the rate of 12.5%
3. locally manufactured or assemble
   electric vehicles (4 wheelers) if supplied
   locally: @1% under eighth schedule.
4. No VAT at import stage is payable on Electric vehicles (4 wheelers)
   CKD kits/CBU, and small
   cars/SUVs, with restricted battery under 12th schedule.
5. EV transport buses of 25 seats or
   more in CBU conditions: 1% at reduced rate under 8th schedule.

Question 7

Taxation for laptops?

Answer 7

Parts for assembling and manufacturing personal computers and laptops if imported by manufacturer registered with Engineering Development Board are exempt under 6th schedule.

Supply of locally manufactured laptop is exempt under 6th schedule.

supply of imported laptops are charged at 10% reduced rate.

Question 8

Taxation of Various equipment
required for cardiology/cardiac
surgery, neurovascular,
endoscopy, oncology, gynaecology?

Answer 8

6th schedule item so import is exempt

Question 9

Gift taxation?

Answer 9

import of goods received in the event of a
natural disaster as gift is exempt under 6th schedule.

Question 10

Taxation of Seeds for sowing, Fertilizers (excluding DAP), pulses, POL Products (Petrol, Diesel, Kerosene)

Answer 10

Import and supply of these items are exempt under 6th schedule.

Note: import and supply of DAP is
subject to 5% tax on retail price under
3rd/8th schedule with no refund of excess
input.

Question 11

what is area to which supplies are exempt ?

Answer 11

Supplies to tribal areas till June 2025 are exempt under 6th schedule

Question 12

taxation for red chilies, Ginger and turmeric?

Answer 12

the import and supply of Red chilies, Ginger and turmeric excluding
those sold under brand names and trade mark are exempt under 6th schedule

Question 13

Rice, wheat, wheat and maslin flour taxation?

Answer 13

supply and import are exempt

Question 14

businesses to be
established in Gwadar Free Zone taxation?

Answer 14

Supply made by businesses to be
established in Gwadar Free Zone for 23
Years.
Note: Supplies made outside Gwadar
free zone will be fully taxable is exempt under 6th schedule.

Question 15

Hospital related taxation?

Answer 15

Exempt under 6th schedule
Goods imported by
hospital run by nonprofit making institutions subject to zero percent
custom duty

supply of Goods excluding electricity and
natural gas supplied to hospitals run by the
charitable hospital of 50 beds or more

Goods donated to hospital run by
non- profit making institutions subject to
zero percent custom duty.

output tax
sales through retail outlets and to employees, educational institutes, hospitals will not attract 4% further tax as they are end users.

Question 16

supply of electricity taxation?

Answer 16

Supply of electricity to all consumers
in Tribal areas. Exemption not available to
industries established after 31 May 2018.
Exemption also not available to steel,
ghee or cooking industries.

Question 17

fixed assets

Answer 17

Supply of fixed assets against which
input tax is not allowed is exempt as per table 2 6th schedule.

Question 18

Solar panels

Answer 18

import and supply of solar panels
(Photovoltaic cells) are exempt

Question 19

milk

Answer 19

Milk excluding that sold under a brand
name or supplied by corporate dairy
farms supply is exempt under 6th schedule

Question 20

Iron and steel scrap taxation

Answer 20

iron and steel scrap excluding
supplied by manufacturer-cum-exporter
of recycled copper authorized under
Export Facilitation Scheme, 2021. supply is exempt under 6th schedule

Question 21

newspaper and books, fruit juices
excluding bottled or canned, wheat bran,
sugar beet, locally produced silos

Answer 21

there supply is exempt under 6th schedule

Question 22

live animals, live poultry, raw hides
and skins

Answer 22

supply is exempt under 6th schedule

Question 23

Flavored milk, milk and cream, yogurt taxation?

Answer 23

Flavored milk, milk and cream, yogurt
excluding those sold in retail packing
under brand supply is exempt under 6th schedule.
Note: Same will be fully taxable if sold in retail packing under brand name.
However same will be exempt if sold in
bulk under brand name.

Question 24

Agriculture produce not subject to
further process.

Answer 24

supply is exempt

Question 25

laptops taxation

Answer 25

locally manufactured laptops,
computers
Note: Sale of imported laptops is subject to sales tax @ 10% under 8th schedule.

Question 26

Border sustenance market

Answer 26

All the goods mentioned in table-IV of
6th schedule when supplied/imported within the limits of the Border Sustenance Markets (BSM) established in cooperation with Iran and Afghanistan. Such goods shall be supplied only within the limits of Border
Sustenance Markets established in
cooperation with Iran and Afghanistan.

Note: if goods are brought outside the
limits of such markets, sales tax shall be
charged on the value assessed on the
goods declaration import or the fair market
value, whichever is higher;

Question 27

breads nans chapattis sheer mal?

Answer 27

Bread, nan, chapatti, sheer mal
prepared in tandoors excluding those
prepared in bakeries, restaurants, food
chains and sweet shops are exempt under 6th schedule (supply)

local supply of sheer mal, bun, rusk
excluding that sold in bakeries and sweet
shops by tier-1 retailer are charged under reduced rate of 10% under 8th scheduled.

Question 28

(f) Cereals other than rice, wheat, wheat
and meslin flour
(g) Foodstuff cooked or prepared in
house for serving in messes for workers.
(h) edible vegetables excluding those
bottled or canned
(i) edible fruits, sugar cane, eggs, compost
(j) locally manufactured laptops,
computers

Answer 28

supply is exempt under 6th schedule

Question 29

Colors in sets, erasers, writing,
drawing inks, pencils, sharpeners, pens,
ball pens, markers, color pencils,
geometry box taxation

Answer 29

import and supply is taxed under reduced rate of 10% under 8th schedule

Question 30

Rock phosphate

Answer 30

Rock phosphate if imported by
fertilizer manufacturer for use in the
manufacturing of fertilizers are charged under reduced rate of 10% under 8th schedule.
Note: Sale of rock phosphate will be
subject to tax @ 18%. Reduced rate of
10% is applicable on imports for
manufacturer of fertilizers only.

Question 31

personal computers and
laptop computers, notebooks

Answer 31

these are charged with reduced rate of 10% under 8th schedule however the locally manufactured are exempt

Question 32

Tractors, oil cake taxation?

Answer 32

These are charged @10% under 8th schedule.

Question 33

poultry feed, cattle feed,
sunflower seed meal, rape seed meal taxation?

Answer 33

local supply is charged under reduced rate of 10% under 8th schedule

Question 34

cinematographic equipment taxation?

Answer 34

import of cinematographic equipment
subject to 3% custom duty are charged @5% reduced rate under 8th schedule

Question 35

Pharma sector taxation?

Answer 35

(1) Substances registered as drugs under
the Drugs Act, 1976.
Rate will be 1% subject to condition that:

(i). tax charged and deposited by the
manufacturer or importer, as the case
may be, shall be final discharge of tax
in the supply chain

(ii). No input tax shall be adjusted in the
supply chain.

Note: Medicaments (e.g., scrub, plaster,
surgical types etc.) are fully taxable @
18%.

(2) Raw materials for the basic
manufacture of pharmaceutical active
ingredients (API’s) and for manufacture of
pharmaceutical products, provided that in
case of import, only such raw materials
shall be entitled to reduced rate which are
liable to customs duty not exceeding
eleven per cent ad valorem under the
Customs Act, 1969.

Rate will be 1% subject to condition that:

(i). DRAP shall certify item-wise
requirement of manufacturers of
drugs and APIs and in case of import
shall furnish all relevant information
to Pakistan Customs Computerized
System

(ii). No input tax shall be adjusted in the
supply chain.

Note: from 01 July 2023 benefit of 1% will be available on all local plus imported
pharma raw material including excipients
(e.g. sugar, artificial flavours etc.).
However, all imported pharma raw
material having CD rate above 11% would
now be taxed at standard rate of 18%

Question 36

Second hand and worn clothing taxation?

Answer 36

Secondhand and worn clothing or
footwear shall be subject to 5% reduced rate under 8th schedule. Also second hand and worn clothing or footwear shall be be subject to VAT at import stage under 12th schedule.

Question 37

Natural gas/Phosphoric acid

Answer 37

Natural gas/Phosphoric acid if supplied to supplied to fertilizer plants for urea
manufacturing.

Question 38

locally produced coal taxation?

Answer 38

locally produced coal shall be charged with 700 per metric ton or 18% whichever is higher

Question 39

potassium chlorate taxation?

Answer 39

18% plus Rs.60 per kg. Rs. 60/kg not applicable on import/supply to organization under control of Ministry of Defense under 8th schedule.

Question 40

Goods supplied from FATA/PATA to taxable areas?

Answer 40

Goods supplied from tax-exempt areas
of FATA/PATA to the taxable areas- 16% reduced rate under 8th schedule.

Question 41

Taxation for other than EV and hybrid vehicles vehicles?

Answer 41

locally manufactured motor cars with cylinder capacity of 850cc shall be charged at 12.5%

850 to 1400cc @18% normal taxation

Supply of Locally manufactured or assembled vehicles having engine capacity of 1400cc and above shall be charged @25% under special rates of taxation.

**SyLocally manufactured or assembled vehicles if invoice value (excluding sales tax) exceeds Rs. 4 million @ 25% under special rates of taxation.

Supply of Locally manufactured or assembled double cabin (4x4) pick up vehicles @25% under special rates of taxation.

Import of vehicle in CBU condition with exception of EV with battery capacity of below 50kwh shall be charged @25% under special rates of taxation. 3% VAT is not payable.

Question 42

taxation for hybrid electric vehicles?

Answer 42

supply of locally manufactured hybrid
electric vehicles up to 30 June 2026:
(i). Up to 1800cc - 8.5%
(ii). From 1801-2500cc- 12.75%
(iii). Above 2500cc 18%
under 8th schedule

imported hybrid electric cars
irrespective of cylinder capacity will be
subject to normal sales tax of 18%.

Question 43

General provision of taxation under 8th schedule?

Answer 43

Note-1: Input tax is allowed on all 8th
Schedule items, except agriculture and
related equipment which are subject to
7% tax. Further 3% value addition tax also
to be paid if these items are imported
except second hand/worn clothing,
footwear.

Note-2: Further tax @ 4% is also
chargeable as bottom-line figure in case
of sale of Eight Schedule items to
unregistered persons. However, it is not
applicable in case of secondhand/worn
clothing or footwear, fertilizers and sale to
end consumers.

Question 44

what kind of supplies are zero-rated as per section 4? What are the exceptions?

Answer 44

(a) Goods exported

(b) supply of stores and provisions for consumption aboard a conveyance proceeding to a destination outside Pakistan and

(c) goods mentioned in the 5th Schedule

(d) Such goods as federal govt.
may specify under special circumstances of national security/disaster
etc., are zero rated

Note: Supply of stores to plane/ship proceeding to a destination within
Pakistan is not zero-rated and will be subject to normal tax @ 18%.

The following exports are not zero-rated:

(a) Goods exported for importation

(b) Goods exported to countries restricted by FG e.g. supply of goods manufactured in an export processing zone (EPZ) exported other than LC or advance payment or certain goods (cigars, dyes, chemicals,
ball bearings, yarn, all petroleum products etc.) to Afghanistan or through Afghanistan to central Asian Republics by land or air route.

(c) Goods entered for export under the Customs Act but never exported.

Question 45

list down Goods under 5th schedule.

Answer 45

(a) Supply to diplomats, diplomatic missions, and privileged persons.

(b) Supply of RM and goods for further manufacturing in EPZ. (Goods supplied not for further manufacturing to any person e.g. retailer in EPZ will be taxable @ 18%).
Note: Supply of capital goods (e.g. plant and machinery) in EPZ will be taxable @ 18%.

(c) Supply of locally manufactured plant and machinery to manufacturers in Gwadar Free Zone subject to conditions and restrictions specified in Sno. 14 of the 5th Schedule.

(d) RM, Components and sub-components imported or purchased locally for use in the manufacture of P&M are chargeable to tax @ 0%.

(e) Supplies to exporter under duty tax and remission rules (DTRE
Scheme).

(g) imports or supplies made to Gawadar Special Economic Zone

(h) Exercise books and any RM, packing material, components etc. whether imported or purchased locally for the manufacture of said good subject to restrictions for claiming zero-rating prescribed by the Board

(i) Supplies made by tier-1 retailers to diplomats and diplomatic missions subject to the provision of an exemption certificate by the Ministry of Foreign Affairs.

(j) Supplies of raw materials, components, and goods are needed for further manufacturing of goods in the Gwadar Free Zone and export thereof. However, in case of supply to the tariff area of Pakistan tax shall be charged on the value assessed on the Goods declaration for
import.

(k) Imports or supplies made by, for or to a qualified investment as specified at Serial No.1 of the First Schedule to the Foreign
Investment (Promotion and Protection) Act, 2022 for the period as specified in the Second Schedule to the said Act

Question 46

Petroleum Crude Oil

Answer 46

Charged under Zero-rated supplies