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FBR issues notices to owners of oil mills & composite unit of cotton ginning

FBR issues notices to owners of oil mills & composite unit of cotton ginning

ISLAMABAD: Federal Board of Revenue (FBR) has issued notices to pay the sales tax on cotton seed oil to owners of oil mills and composite units of cotton ginning across the country.

Sources told Customs Today that Supreme Court of Pakistan has ordered to cancel the SRO No. 188 dated January 2015 on which Federal Board of Revenue (FBR) has issued notices to owners of oil mills and composite units of cotton ginning and directed to pay sales tax on the sale of cotton seed oil, cotton seed oil cake since 2015.

Sources told that earlier FBR had imposed 6% of fixed sales tax on sale of 40kg of cotton seed and removed 2% of sales tax on cotton seed oil and 5% of sales tax on cotton seed oil cake which was appreciated by the cotton ginning industry; however, some owners of oil mills challenged the FBR decision and moved the Sindh High Court to remove the fixed sales tax on sale of 40 kilogram of cotton seed.

The Sindh High Court ordered in favor of oil mills owners and ordered to remove the fixed sales tax of 6% but then FBR challenged the high court decision and submitted a petition in Supreme Court of Pakistan where the apex court cancelled the SRO. 188 as it was not approved by the then federal cabinet.

Sources added that after the cancellation of SRO, the FBR has sent notices to pay the sales tax on cotton seed oil, cotton seed oil cake from 2015 to owners of oil mills and composite units of cotton ginning across the country.