The scheme of zero-rating of five major export oriented sectors has been revamped

GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS AND REVENUE (REVENUE DIVISION) ********* Islamabad, the 4th November, 2011. NOTIFICATION (SALES TAX AND FEDERALEXCISE) S.R.O. 1012(I)/2011.- In exercise of the powers conferred by clause (c) of section 4 read with clause (b) of sub-section (2) and sub-section (6) of section 3, clause (b) of sub- section (1) of section 8, clause (a) of sub-section (2) of section 13 and section 71 of the Sales Tax Act, 1990, and sub-section (2) of section 16 of the Federal Excise Act, 2005 and in supersession of its Notification No.S.R.O.283(I)/2011, dated the 1st April, 2011, the Federal Government is pleased to notify the goods specified in column (2) of the Table below, falling under the PCT heading numbers mentioned in column (3) of the said Table, including the goods or class of goods mentioned in the conditions stated in this notification, to be the goods on which sales tax shall, subject to the said conditions, be exempt on the supply and import thereof, or charged at zero-rate or, as the case may be, at the rate of five per cent to the extent and in the manner as specified in the aforesaid conditions, namely:- TABLE Sr. Description of goods PCT Heading No. No. (1) (2) (3) 1. Leather and articles thereof including artificial leather footwear 41.01 to 41.15, 64.03, 64.04, 6405.1000, 6405.2000 and other respective headings 2. Textile and articles thereof excluding monofilament, sun Chapter 50 to Chapter 63 sheding, nylon fishing net, other fishing net, rope of poly and other respective ethylene and rope of nylon, tyre cord fabric headings excluding 5407.2000, 5608.1100, 5608.1900, 5608.9000 3. Carpets 57.01 to 57.05

4. Sports goods 9504.2000, 95.06 and other respective headings 5. Surgical goods Respective headings 6. Mucilages and thickeners, whether or not modified, derived 1302.3210, 1302.3290, from locust beans, locust bean seeds or guar seeds 1302.3900 7. Cotton linter 1404.2000 8. Emery powder and grains 2513.2010 9. Magnesium oxide 2519.9010 10. Coning oil 2710.1991 11. Spin Finish Oil 2710.1998 12. Antimony oxide 2825.8000 13. Sodium bromate 2829.9000 14. Sodium sulphide and sodium hydrogen sulphide 2830.1010, 2830.1090 15. Sodium dithionite 2831.1010 16. Sodium sulphite and sodium hydrosulphide 2832.1010, 2832.1090 17. Phosphinates (hypophosphite) and phosphonates( 2835.1000 phosphates) 18. Sodium dichromate 2841.3000 19. Hydrogen per oxide 2847.0000 20. p-Xylene 2902.4300 21. Trichloroethylene 2903.2200 22. Ethylene Glycol (MEG) 2905.3100 23. Di-ethylene glycol 2909.4100 24. Ethyl glycol 2909.4490 25. Tri-ethylene Glycol 2909.4990 26. Glutar aldehyde 2912.1900 27. Formic acid 2915.1100 28. Sodium formate 2915.1210 29. Acetic acid 2915.2100 30. Sodium acetate 2915.2930 31. Acrylic acid and its salts 2916.1100 32. Esters of Methacrylic acid 2916.1400 33. Oxalic acid 2917.1110

34. Pure terephthalic acid (PTA) 2917.3610 35. Glycolic acid and their esters 2918.1800 36. Other phosphoric esters and their salts 2919.9090 37. Dyes intermediates 2921.0000 2922.0000 2923.0000 2924.0000 2927.0000 2933.0000 2934.0000 38. DMF (Dimethyl Formamide) 2924.1990 39. Acrylonitrile 2926.1000 40. Other organic derivatives of hydrazine or of hydroxylamine 2928.0090 41. Tanning extracts of vegetable origin; tannins and their salts, 3201.1000 ethers, esters & other derivatives 3201.2000 3201.9020 3201.9090 42. Synthetic organic tanning substances, inorganic tanning 3202.1000 substances, tanning perpetrations, whether or not containing 3202.9010 natural tanning substances; enzymatic preparations for pre- 3202.9090 tanning 43. Disperse dyes and preparations based thereon 3204.1100 44. Acid dyes and preparation based thereon 3204.1200 45. Basic dyes and preparations based thereon 3204.1300 46. Direct dyes and perpetrations based thereon 3204.1400 47. Indigo Blue 3204.1510 48. Vat dyes and preparations bases thereon 3204.1590 49. Reactive dyes and perpetrations based thereon 3204.1600 50. Pigments and perpetrations based thereon 3204.1700 51. Dyes, sulphur 3204.1910 52. Dyes, synthetic 3204.1990 53. Synthetic organic products of a kind used as fluorescent 3204.2000 brightening agents 54. other synthetic organic colouring matter 3204.9000

55. Pigments and preparations based on titanium dioxide 3206.1900 56. Other colouring matter and other preparations 3206.4910 57. Granules, flakes, powder of glass (others) 3207.4090 58. Prepared water pigments of a kind used for finishing leather 3210.0020 59. Cationic surface active agents 3402.1210, 3402.1220, 3402.1290 60. Non-ionic surface active agents 3402.1300 61. Surface active preparations and cleaning preparations 3402.9000 excluding detergents 62. Preparations for the treatment of textile material, leather, fur 3403.1110, 3403.1120 skins or other material 3403.1990 3403.9110 3403.9190 63. Spin finish Oil 3403.9131 64. Artificial waxes and prepared waxes 3404.9010 65. Other artificial waxes 3404.9090 66. Other glues (printing gum) 3505.2090 67. Shoe adhesives if imported directly or purchased from the 3506.9110 local registered manufacturers of shoe adhesives by the manufacturers of leather or sports goods for their own use. 68. Hot melt adhesive if imported directly or purchased from the 3506.9110 local registered manufacturers of hot melt adhesives by the 3506.9190 manufacturers of leather or sports goods for their own use. 69. Enzymes 3507.9000 70. Photographic film, with silver halide emulsion (for textile use) 3702.4300 3702.4400 71. Sensitizing emulsions (for textile use) 3707.1000 72. Fungicides for leather industry 3808.9220 73. Preparation of a kind used in textile or like industry 3809.9110 3809.9190 74. Preparation of a kind used in leather or like industries 3809.9300 75. Compound plasticizers for rubber or plastics 3812.2000 76. Antimony triacetate 3815.1910 77. Palladium catalyst 3815.9000

78. Electrolyte salt 3824.9060 79. Electro polishing chemicals 3824.9060 80. Polymers of vinyl acetate (in aqueous dispersion) 3905.1200 81. Vinyl acetate copolymers: in aqueous dispersion 3905.2100 82. Polymers of vinyl alcohol 3905.3000 83. Other vinyl polymers 3905.9990 84. Acrylic polymers in primary forms 3906.9090 85. Polyethylene terephthalate-Yarn grade, and its waste 3907.6010 86. Nylon Chips (PA6) 3908.1000 87. Polyurethanes 3909.5000 88. Silicones in primary form 3910.0000 89. Cellulose nitrates nonplasticised 3912.2010 90. Other cellulose nitrates 3912.2090 91. Carboxymethyl cellulose and its salts 3912.3100 92. Alginic acids, its salts and esters 3913.1000 93. Nylon tubes 3917.3910 94. Artificial leather 3921.1300 95. Synthetic leather grip 3926.9099 96. Sequins 3926.9099 97. Natural rubber latex 4001.1000 98. Technical specialized natural rubber 4001.2200 99. Rubber latex 4002.1100 100. Synthetic rubber SBR 1502 latex 4002.1900 101. Butadiene rubber 4002.2000 102. Thermo-plastic rubber (T.P.R.) 4002.9900 103. Vulcanized rubber thread and cord 4007.0010 4007.0090 104. Leather shearing-finish leather with wool 4302.1910 105. Articles of apparel and clothing accessories of fur skin 4303.9000 106. Artificial fur and articles thereof 4304.0000 107. English willow cleft (wood) 4404.1000 108. Cork Granules 4501.9000 109. Cork sheet 4504.1010

110. Wood-pulp (dissolving grade) 4702.0000 (if imported by manufacturers of viscose staple fibre for use in the manufacturing of viscose staple fibre) 111. Satin Finishing Wheels 6804.2100 112. Carbon Fiber 6815.1000 113. Glass fiber sleeves 7019.9010 114. Forging of surgical and dental instruments 7326.1920 115. Nickel rotary printing screens 7508.9010 116. Hooks for footwear 8308.1010 117. Eyes and eyelets for footwear 8308.1020 118. Tubular or bifurcated rivets 8308.2000 119. Strings 8308.9090 120. Bladders and covers of inflatable balls 9506.9919 121. Press-fasteners, snap fasteners and press studs 9606.1000 122. Buttons of plastics not covered with textile material 9606.2100 123. Buttons of base metal not covered with textile material 9606.2200 124. Studs 9606.2910 125. Buttons 9606.2920 126. Slide fasteners 9607.1100, 9607.1900 CONDITIONS (i) the goods (useable as industrial inputs) covered under this notification if imported by the registered manufacturers of textile, carpets, leather, sports and surgical goods sectors, shall be exempt from sales tax; (ii) the goods imported by all other registered importers shall be charged to sales tax at the rate of 5% ad val.; (iii) on local purchase or supply, this notification shall, in case of textile sector apply from ginning stage onwards (for synthetic sector from production of PTA and MEG) and in case of other sectors, from the first organized manufacturing stage onwards; (iv) supplies of these goods to registered persons of five zero-rated sectors upto wholesale stage shall be zero-rated;

(v) supplies of these goods to unregistered persons and retailers (both registered and unregistered) shall be charged to sales tax at the rate of 5% ad val.; (vi) where a registered person has acquired goods on payment of sales tax at the rate of 5% ad.val., he shall be entitled to input tax adjustment or as the case may be, refund against the subsequent supplies made by him to registered persons either at the rate of 5% ad val. or as the case may be, at zero rate; (vii) a registered person who has consumed any other inputs acquired on payment of sales tax, but not covered in this notification, shall be entitled to input tax adjustment or, as the case may be, refund in respect of the supplies made by him either at the rate of 5% ad val. or at zero rate; (viii) the registered persons who are solely or otherwise engaged in the retail business of these goods or products shall pay sales tax at the rate of 5% ad val. on their retail sales and shall be entitled to input tax adjustment or, as the case may be, refund against such sales and they shall not be required to pay any other sales tax leviable on their such retail transactions; (ix) where in the case of a registered person falling under the provisions of this notification, amount of claimable refund exceeds the amount of tax payable by him, he may minus the tax liability from his refundable amount and claim refund of the balance amount, if any; (x) the registered manufacturers who process goods owned by unregistered persons shall charge sales tax at the rate of 5% ad val. on the processing charges received by them, provided that no tax shall be charged from the registered principals; (xi) the registered manufacturers shall be entitled to the adjustment of input tax paid on machinery parts or spares and lubricants acquired by them for their own use; (xii) benefit of this notification shall be available if the goods covered in this notification are used for the purpose of manufacturing or trading in the sectors specified in condition (i); (xiii) all finished products of the sectors specified in the condition (i) shall, if sold to the end consumer, be charged to sales tax at the rate of 5% ad val; (xiv) the restrictions specified in the Table of this notification shall also be deemed to be the conditions of this notification; and

(xv) supply of electricity and gas to the registered manufacturers of the above mentioned sectors shall be zero rated in such manner and to such extent as may be specified by the Federal Board of Revenue. [C.No.1(140)C(RGST)/Textile/2011] (Shahid Hussain Asad) Additional Secretary