Sales tax is a tax that is levied on the sale of goods and services. In Pakistan, sales tax is levied at a rate of 17%. However, there are some goods and services that are exempt from sales tax, such as basic necessities and exports.
Further tax is a type of sales tax that is levied on the sale of goods and services that are not already subject to sales tax. Further tax is levied at a rate of 3%.
The Sales Tax Act, 1990, provides for the imposition of further tax on certain goods and services. The Second Schedule to the Sales Tax Act, 1990, lists the goods and services that are subject to further tax.
The Federal Board of Revenue (FBR) has issued a number of Statutory Regulatory Orders (SROs) that have amended the list of goods and services that are subject to further tax.
S.R.O 648 (I)/2013 excluded certain goods and services from the levy of further tax. These goods and services include:
- Electrical energy supplied to domestic and agricultural consumers.
- Natural gas supplied to domestic consumers.
- Motor spirit, diesel oil, jet fuel, kerosene oil and fuel oil.
- Goods sold by retailers to the end consumers.
- Supply of goods directly to the end consumers including food and beverages, fertilizers and vehicles.
- Items falling in the Third Schedule to the Sales Tax Act, 1990.