Mohsin Siddiqui (Chief Reporter)

Federal Board of Revenue (FBR) has made amendments to the Sales Tax General Order (STGO) Number 9 of 2023, excluding several items from the negative list. This development allows input tax adjustment for manufacturers in five key export sectors, namely textile, leather, carpets, surgical, and sports.

The rationalization of the negative list took place on Monday, with the FBR excluding items previously restricted by STGO 9 of 2023.

The STGO 9 of 2023 initially contained a negative list of 714 items, restricting input tax adjustment for the aforementioned export-oriented industries.

As per the FBR’s latest decision, specified Pakistan Customs Tariff (PCT) headings are now excluded from the purview of STGO 9 of 2023.

Input tax adjustment on the purchase of essential raw materials, such as tubes, pipes, glass fibers, etc., is now allowed for exporters in sectors like leather, sports, tents, and canvas, integral to their manufacturing processes.

Under STGO 9 of 2023, manufacturers in the five leading export sectors were not allowed input tax adjustment for goods unrelated to their business activities.

The negative list of such unrelated goods was annexed with STGO 9 of 2023.

The FBR emphasizes its authority to add, delete, or modify annexures, conditions, or benchmarks as needed. This decision comes after recommendations from field formations with jurisdiction over export-oriented sectors.

Stay informed about these regulatory changes as the FBR’s decision impacts input tax adjustments for manufacturers in vital export sectors, potentially influencing the overall dynamics of these industries