ISLAMABAD (August 31 2003) : The government has slashed withholding tax, from 6 percent to 3 percent, on the import of condemned ships, and condition of value-addition on the local supply of ship scrap has been rationalised from 21 percent to 14 percent.
Sources said here on Saturday that withholding tax on import of condemned ships has been reduced from 6 percent to 3 percent, which would constitute a minimum tax liability.
The overall impact of the decision would be around Rs 1000 per metric ton and it would substantially reduce the prices of iron and steel products due to decrease in the price of raw material.
The steel industry should pass on the benefit of Rs 1,000 to the consumers, sources added.
In another ECC decision, SRO 507(I)/2003 had disallowed input tax adjustment to a registered person, if the goods manufactured by consuming raw material, parts, sub-components and components imported under various concessionary notifications issued under section 19 of the Customs Act, 1969 or section 13 of the Sales Tax Act, 1990, were supplied to any person who was not registered or enrolled under the Sales Tax Act, 1990.
However, the aforesaid inadmissibility of input tax adjustment on supplies to non-registered or non-enrolled persons shall now be applicable to air-conditioning/chilling plants and humidification plants, cranes and propane storage tank/heat exchanger and gas separator.
Sales tax has been waived on the local supply of fresh, liquid and dried milk with or without addition of sugar or any sweetening matter.
Sales tax has been waived from the import of machinery meant for livestock/poultry including plant/machinery meant for processing, packaging and preservation.
ECC also decided that local supplies of haemodialysis machines, A V fistula needles, haemodialysis fluids and powder, blood tubing lines for dialysis etc made before July 1, 2003, will also be exempt from sales tax, provided no tax was charged on such supplies.
Imports made prior to July 1, 2003, were already exempt.
The aforesaid concessions are meant to increase exports, which is a zero-rated activity.
These measures will also reduce the cost of investment and will have a direct bearing on poverty alleviation, on the one hand, and contribute to the expansion of exportable supplies, on the other.
The ECC of the Cabinet has approved the reduction of duty on the import of sodium dichromite from 25 percent to 20 percent; Stearic acid 25 percent to 20 percent; non-CFC gases from 10 percent to 5 percent and duty on bronze powder was reduced from 10 percent to 5 percent.
