Friday, June 12, 2009

Telecom sector to be disallowed input tax adjustment

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ISLAMABAD (June 11 2009): The government has decided to disallow input tax adjustment facility to the telecommunication sector in the coming budget for 2009-10. Sources told Business Recorder on Wednesday that rate of federal excise duty on telecom sector would be reduced from 21 to 16 percent. However, this reduction would be linked with abolition of input tax adjustment facility.

The analysis of telecom sector shows that the telecom service providers have claimed extraordinary input tax adjustment, but there has been no proportionate increase in sales tax during 2008-09. The government is likely to impose 2 percent additional federal excise duty (FED) on cosmetics and perfumes.

It is expected that the government may exempt sales tax on import and local supply of lysine sulphate, consumed by poultry industry. The government may also sales tax zero-rate ''Provatex CP'', a chemical which is used in the manufacturing of fire retardant fabrics/garments.


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