The Federal Board of Revenue (FBR) has implemented a new directive for manufacturers of lead batteries, requiring them to deduct 80 percent of the applicable sales tax from lead suppliers, up from the previous rate of 75 percent. This change aims to enhance compliance and revenue collection.
To combat the issue of fake and flying invoices, significant amendments have been made to the Eleventh Schedule of the Sales Tax Act (STA) through the Finance Act, 2024. According to the FBR’s latest sales tax circular, registered persons receiving supplies in various categories are now mandated to withhold higher percentages of sales tax.
Read more: Sales tax is now applicable on imported LPG, textiles, and laptops
Cement manufacturers are required to withhold 80 percent of the applicable sales tax from suppliers of gypsum and limestone flux, as specified under Chapter 25 of the Pakistan Customs Tariff (PCT). Similarly, those receiving coal supplies, categorized under Chapter 27 of the PCT, must also withhold 80 percent of the applicable sales tax.
Additionally, registered individuals receiving supplies of waste paper and paperboard, plastic waste, crushed stone, and silica are now obligated to deduct sales tax. This expanded requirement aims to tighten controls and reduce tax evasion across these sectors.
