ISLAMABAD, Jan 27: The Central Board of Revenue has notified deemed price value for calculation of sales tax on import of ships for scrap to enable Pakistani ship breakers to bid for higher purchase prices in the world market.
The decisions were notified through two sales tax notifications SRO77 and SRO76 issued here on Thursday. The CBR fixed the deemed price (notional value) for calculation of sales tax at import stage at $300 per LDT instead of the invoice value or dutiable value.
Through another notification, the mandatory value addition was reduced from 14 per cent to five per cent for the payment of sales tax on local supply. A sales tax official told Dawn that the measures would reduce the landed cost of ship scrap by around Rs1,300 per metric ton and thereby enable the ship breakers to bid for higher purchases prices in the world market.
This relief, the official said, would be available on those imports where the declared value of 'ships for scrap' was more than $300 per LDT and would continue for a period of three months only whereupon it would be reviewed in consultation with the Pakistan Ship-Breakers' Association.
The notification SRO77 reads: "CBR will fix the value of taxable supply of ship for scrapping or breaking (PCT heading 8908.0000) as $300 per LDT (in equivalent Pak rupees) for the purposes of assessment of sales tax chargeable at import stage."
The notification SRO76 reads: "The following further amendment shall be made in the Sales Tax Special Procedures Rules, 2004, namely- in the aforesaid rules, in rule 100, in sub-rule (2), in the first proviso for the word 'fourteen' the word 'five' shall be substituted."
