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More fiscal supports for local industries

♦ LPG cylinder continues to enjoy 5pc VAT ♦ Govt also withdraws VAT from refrigerators

  • Special Correspondent
  • 10 June, 2022 12:00 AM
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More fiscal supports for local industries

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More fiscal support ahead for attracting more domestic and foreign investment, create employment and keep the growth of domestic industrial development uninterrupted, said finance minister AHM Mustafa Kamal at budget speech on Thursday.

He proposed the extension of existing facility of paying 5 percent VAT to local manufacturer of LPG Cylinder for one year.

The finance minister also suggested withdrawing full exemption and imposition of 5 percent VAT at the local manufacturing stage on refrigerators and freezers and to continue existing exemption facilities on imported and local purchase of raw material and equipment till June 30, 2023.

Kamal also recommended extension of existing VAT exemption facility for production of compressors of refrigerators and freezers till June 30, 2025.

Exemption of Advance Tax on imported raw materials of polypropylene staple fiber and keeping the existing exemption facility at the manufacturing stage, he suggested.

In case of manufacture of Active Pharmaceuticals Ingredients (API), VAT exemption at local manufacturing stage and VAT (including Advance Tax) and Supplementary Duty exemption on import and local purchase of raw materials are proposed till December 31, 2025.  In order to develop heavy industry in the country, VAT exemption at local manufacturing stage and VAT (including Advance Tax) and Supplementary Duty exemption on import and local purchase of raw materials and parts to manufacture motor car and motor vehicle up to 2500 CC are proposed till 30 June, 2030.

However, if conditions of complete manufacturer are not met, 5 percent VAT at the local manufacturing stage will be applicable from 2026, according to him.

 five percent VAT will be applicable at the manufacturing stage of three-wheeler and VAT (including Advance Tax) and Supplementary Duty shall be exempted on import of raw materials and parts thereof till June 30, 2025.