How do I apply for exemption from advance income tax on imported machinery?

Question

I am importing machinery for my manufacturing business and was told that I can apply for exemption from advance tax. What is the process with FBR?

Answer 1

Yes, you can apply for exemption from advance income tax on machinery imports if it qualifies under the relevant provisions of the Income Tax Ordinance, 2001 (usually under section 148).
You need to submit an application for exemption certificate through FBR’s IRIS portal, providing details of the machinery, HS codes, and supporting documents like the proforma invoice and NTN.
FBR will review your case and, if eligible, issue an electronic exemption certificate.
This certificate must be shared with Customs at the time of clearance so that no advance tax is deducted.
Make sure your tax profile is updated and you are on the Active Taxpayers List (ATL) to avoid delays.

Answer 2

If you are importing machinery for your manufacturing business and want exemption or a reduced rate from advance tax collected at import stage under Section 148 of the Income Tax Ordinance, 2001, you must apply for an exemption certificate under Section 159 through the FBR IRIS portal. Log in to your IRIS account, go to e-Applications, select “Application for Exemption Certificate,” choose Section 148, and provide details of the import along with justification that your final tax liability will be lower than the advance tax being collected. You must attach supporting documents such as recent income tax returns, financial statements, proforma invoice or import contract, and proof of active taxpayer status. The application is reviewed by the Commissioner Inland Revenue, who may approve full exemption or a reduced rate after examination or hearing, and once approved, the exemption certificate can be presented to Customs at the time of import.