ISLAMABAD – President Mamnoon Hussain on Friday granted his assent to the Finance Act, 2016 that provided certain provisions thereof shall come into force from today (Saturday).
The following provisions of the sales Tax Act, 1990 and the Federal Excise Act, 2005 will, therefore, become applicable from 25-06-2016.
Sugar was exempted from sales tax whereas it was chargeable to FED @ 8%.
Through the Finance Act, 2016, exemption of sales tax from sugar has been withdrawn.
Moreover, FED on sugar has also been abolished.
Now sugar is chargeable to sales tax at the reduced rate of 8%.
Pesticides and their active ingredients – pesticides and their active ingredients were chargeable to sales tax @ 7%.
Through the Finance Act, 2016 pesticides and their active ingredients have been granted exemption from sales tax.
Agriculture tractors were chargeable to sales tax @ 10%.
Through the Finance Act, 2016, the rate of sales tax on agriculture tractors has been reduced to 5%.
Urea fertilizer was chargeable to sales tax at the standard rate of 17%.
Through Finance Act, 2016 urea fertilizer will now be chargeable to sales tax @ 5%.
The rate of sales tax on Category “B” and Category “C” mobile phones has been increased from Rs.
500 and Rs.1000 to Rs.1000 and Rs1500 respectively.
Aerated waters & beverages were charged to FED @ 10.5%.
Through Finance Act, 2016, the rate of FED on aerated waters & beverages has been increased to 11.5%.
Cement was chargeable to FED @ 5%.
Through Finance Act, 2016, cement is now chargeable to FED @ Rs.
1 per kg.
All the concerned taxpayers have been requested to charge and pay sales tax at the new rates given above with effect from 25th June 2016.