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Pakistan: FBR to Present ST Amendment Bills to Parliament - Reformed GST from October 1 |
| Source: |
brecorder.com |
| Source Date: |
Saturday, June 12, 2010 |
| Focus: |
Knowledge Management in Government
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| Country: |
Pakistan |
| Created: |
Jun 21, 2010 |
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The Federal Board of Revenue has to present the Sales Tax Amendment Bills (2010) to the Parliament for implementation of the reformed general sales tax (GST) from October 1, 2010. However, the collection of sales tax on services would remain a major issue even under the reformed GST. Sources told Business Recorder on Saturday the reformed GST cannot be implemented through Statutory Regulatory Orders (SROs).
The Sales Tax Amendment Bills (2010) have to be timely tabled in the Parliament for introducing reformed GST. The issue of sales tax on services has to be resolved before implementing reformed GST, otherwise, similar situation would arise as happened in case of Federal and Provincial VAT Bills 2010. The issue of input tax credit and tax adjustment would also be raised in the reformed GST unless the issue of sales tax on services is not resolved by the provinces.
Under the Sales Tax Amendment Bills (2010), the FBR would be required to abolish exemptions in the Sixth Schedule of the Sales Tax Act, 1990 and zero-rating granted to different sectors. However, reformed GST requires major changes in the Sales Tax Act, 1990. If all exemptions of the sales tax would be withdrawn under the reformed GST, there would be no difference between the VAT and the reformed GST.
In this way, the FBR will be able to generate more revenue through reformed GST instead of the VAT. In such a situation, the VAT implementation would not have any significance in reforming the GST regime. Presently, the FBR is legally empowered to increase or decrease tax rates through SROs under the powers of the Sales Tax Act. The FBR has to surrender this power to the Parliament under the reformed GST as proposed in the Federal VAT Act.
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Pakistan: FBR to Present ST Amendment Bills to Parliament - Reformed GST from October 1 The Federal Board of Revenue has to present the Sales Tax Amendment Bills 2010 to the Parliament for implementation of the reformed general sales tax GST from October 1 2010 However the collection of sales tax on services would remain a major issue even under the reformed GST Sources told Business Recorder on Saturday the reformed GST cannot be implemented through Statutory Regulatory Orders SROs
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