ISLAMABAD (July 31 2010): The Federal Board of Revenue (FBR) has conveyed to the Punjab Board of Investment and Trade that the Sixth Schedule of the Sales Tax Act, 1990 and concessionary notifications provides a number of exemptions to the businessmen for making investment in agriculture sector and agro-based industry.

It is learnt here on Friday that the FBR has issued a letter to the Punjab Board of Investment and Trade in this regard. The FBR has informed the said provincial department that different kinds of exemptions and concessions are available to the investors under tax laws particularly Sixth Schedule of the Sales Tax Act.

According to the FBR letter ie "Guidance to investors on tax issues", local supply of agricultural produce of Pakistan, not subjected to any further process of manufacture is exempt vide serial number 10 of Table-2 of Sixth Schedule of the Sales Tax Act, 1990. Second, the word, "manufacture" is defined in sub-section (16) of section 2 of the Sales Tax Act, 1990 which provides that the process and operation of bottling, packing and re-packing is covered under the process of manufacturing.

Third, sub-section 17 of section 2 of the Sales Tax Act, 1990 provides that a person who by any process or operation assembles, mixes, cuts, dilutes, bottles, packages, re-packages or prepare goods by any other manner is called as manufacturer or producer. Fourth, Rule-4 of the Sales Tax Rules 2006 provides that a manufacturer not being a cottage industry is required to be registered under the Sales Tax Act, 1990.

Fifth, edible vegetables including roots and tubers except ware potato and onions whether fresh, frozen or otherwise prepared eg in cold storage but excluding those bottled or canned are exempt vide serial number 13 of Table-1 of Sixth Schedule of the Sales Tax Act, 1990. Sixth, edible fruits excluding imported fruits from Afghanistan whether fresh, frozen or otherwise prepared eg in cold storage but excluding those bottled or canned are exempt vide serial number 15 of Table-1 of Sixth Schedule of the Sales Tax Act, 1990.

On the customs side, presently, specified machinery for agriculture sector and for agro-based industries like milk processing, fruit, vegetable or flowers grading, picking or processing etc, is exempt from whole of the customs duty and sales tax in term of serial number 1 of the Table of SRO.575(I)/2006. Moreover, machinery and equipment imported for grain handling and storage facilities and cool chain is also exempt from customs duty and sales tax vide serial number 2 and 3 of the Table of SRO.575(I)/2006, the FBR added.

Copyright Business Recorder, 2010