Govt increases sales tax by 25% on imported luxury goods

March 08, 2023 (MLN): In a bid to comply with the condition set by the IMF, the federal government has issued a directive to charge, levy and collect sales tax on the import and subsequent supply of goods at a rate of 25%.

This decision was taken under clause (b) of sub-section (2) of section 3 of the Sales Tax Act, 1990, and is in accordance with the first proviso to clause (a) of the said sub-section (2).

"The sales tax shall be charged, levied, and paid at the rate of twenty-five percent of the value of the goods imported and their subsequent supply or the retail price, as the case may be, as mentioned in column (2) of Table-I and the sales tax shall be charged, levied and paid at the rate of twenty-five percent of the value of the supply of goods as mentioned in column (2) of Table-II," the notification issued by Ministry of Finance and Revenue read.

These items include CBU vehicles, electronic items, cosmetics, pet food, shoes, doors and windows, luxury utensils, imported bags, shampoo, soap, lotion, headphones, iPod, and speakers, etc. 

This decision is expected to have a significant impact on the import and supply of goods in the country, particularly on those items mentioned in Table-I. It is also expected to have an effect on the prices of goods and may result in increased prices for consumers.

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