ISLAMABAD – The government of Pakistan has decided to declare fivezero-rated sectors, which are eligible for incentives, as export-orientedsectors, according to a report by a local newspaper.link
The report stated that this proposal will be tabled before the EconomicCoordination Committee (ECC) of the Cabinet on Wednesday (today).
Sharing the background, the report quoting sources said, StatutoryRegulatory Order (SRO) 1125(1) 2011 of December 31, 2011 issued by theRevenue Division was the only legal instrument used for the identificationof the sectors eligible for the zero-rated incentives package of theFederal Government.
With the rescission of the SRO 1125(1)2011 through the Finance Act, 2019,the available legal instrument has ceased to exist, thus, making itdifficult for the concerned government departments to identify thezero-rated sectors, stated the report.
In order to resolve the issues related to this issue, the ECC, in itsdecision of August 8, 2019, constituted a committee under the chairmanshipof Minister for Economic Affairs, comprising Special Assistant to the PrimeMinister on Petroleum, Secretary Finance, Secretary Commerce and ChairmanFBR, to review the proposal of the Petroleum Division and submit itsrecommendations to the ECC.
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In pursuance of the decision of the ECC of the Cabinet, the committee helda series of meetings. During the second meeting of the committee, thecommittee tasked the Commerce Division to issue a clarification or SRO, inplace of the rescinded SRO 1125(1) 2011 to define the new nomenclature ofthe previously zero-rated industry.
Subsequently, the committee, in its meeting held on October 23, 2019,agreed that the nomenclature of the sectors mentioned in the ECC decisionof August 8, 2019, will be “export-oriented sectors, which includestextile, carpets, leather, sports and surgical goods”, and the CommerceDivision will issue the necessary SRO for clarification of the newnomenclature.
Citing the recommendations of the committee, Commerce Division has proposedthat the erstwhile zero-rated sectors may be declared as “export-orientedsectors”.
