The FBR has recently issued a negative list of items on which input tax adjustment shall not be allowed for five leading export-oriented industries in Pakistan. This list comprises 714 items and includes various goods and services that are not related to the business activities of these industries. The FBR has taken this decision to ensure that these industries do not claim input tax adjustments on goods and services that are not directly related to their export-oriented activities.
This decision has significant implications for the export-oriented industries in Pakistan. The textile, leather, carpets, surgical, and sports industries are major contributors to Pakistan’s economy, accounting for a significant portion of the country’s exports. The denial of input tax adjustment on certain goods and services may result in increased production costs for these industries, affecting their competitiveness in the international market.
The negative list of items includes several goods and services that are commonly used by these industries. For example, newsprint is used by the printing and publishing industry, which is a major consumer of textile and leather products. The denial of input tax adjustment on newsprint will increase the production costs for these industries, affecting their profitability. Similarly, pharmaceutical goods and cosmetic preparations are used by the surgical and beauty industries, respectively. The denial of input tax adjustment on these items may increase their production costs, affecting their competitiveness in the international market.
The negative list also includes several other items and services that are commonly used in different industries, such as fertilizers, essential oils, lamps, and furniture. The denial of input tax adjustment on these items may result in increased production costs, affecting the profitability of these industries.
In conclusion, the FBR’s decision to issue a negative list of items on which input tax adjustment shall not be allowed for five leading export-oriented industries in Pakistan will have significant implications for these industries. The denial of input tax adjustment on certain goods and services may increase their production costs, affecting their competitiveness in the international market. It is essential for these industries to assess the impact of this decision on their businesses and take necessary measures to maintain their competitiveness.
Overall, the FBR’s decision is aimed at ensuring that these industries claim input tax adjustments only on goods and services that are directly related to their business activities. This decision is expected to promote transparency and accountability in the taxation system and prevent the misuse of input tax adjustments by these industries.
