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FBR withdraws zero-rating of textile unit

FBR withdraws zero-rating of textile unit

KARACHI: The Federal Board of Revenue (FBR) has withdrawn zero-rated sales tax on the consumption of gas on the misuse of facility by a textile unit.

The FBR had withdrawn the facility that was allowed to Lakhany Textile International located at SITE Industrial Area Karachi.

The FBR directed the chief commissioner of Corporate Regional Tax Office, Karachi to coordinate with the Sui Southern Gas Company to stop the facility and start charging normal rate of sales tax on supply of natural gas, the sources said.

The FBR also directed the chief commissioner to initiate legal proceedings against the textile unit and report the board regarding recovery action against the misuse of the facility.

The sources said the unit had been registered at the income tax since February 6, 2001 and the entity was registered with the sales tax since April 13, 2000. The unit has been registered as manufacturer, spinning, weaving and finishing of textile.

The FBR allowed sales tax facility on gas and electricity consumption to the textile entities in order to reduce the cost of manufacturing and make the exports competitive in the international market.