Summary of Tax Expenditure 2021
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SUMMARY OF TAX EXPENDITURE 2021
Tax Expenditure Report 2021 for federal taxes, based on data pertaining to FY 2019-20, amounted to an
estimated Rs. 1,314.27 billion. Tax expenditure in sales tax amounted highest at Rs. 578.46 billion (44% of
the total), while in income tax amounted to Rs. 448.05 billion (34%), and in Customs, to Rs. 287.77 billion
(22%). In last fiscal year 2019-20, FBR’s tax collection was Rs. 3,997.4 billion. Hence, tax expenditure to
total collection ratio comes to about 33%, and tax expenditure to GDP ratio stands at around 3.2%.
The tax expenditure estimates are unadjusted amounts, meaning that elimination or repeal of a specific
exemption would not necessarily produce the rupee amounts cited in this report. Actual receipts would
depend on enforcement, taxpayer compliance, effective dates of legislation repealing the exemption, exact
wording of any legislation, taxpayer’s behavior, and some other economic factors.
This report briefly outlines federal tax exemptions and concessions. These descriptions do not grant rights or
impose obligations; rather, the tax laws and rules made thereunder determine actual tax liability. Each
estimate is based on the best information available from public and private sources, including FBR’s
database. It would be exceptionally burdensome on taxpayers to require detailed reporting of transactions
corresponding to each of the exemption sections and clauses. No such detailed reporting is imposed by statute
or rules. Consequently, tax returns do not contain data sufficient to estimate the value of all exemptions and
exclusions.
Estimation requires identification of pertinent, useful data available from various external sources. Where
exemptions identified in tables have not been estimated, it is because requisite data does not exist or have not
been identified and acquired from an external source.
Income Tax Estimates
Summary of Tax Expenditure Estimates of Income Tax - FY 2021
Contents (Rs. Million)
1 Allowances 37,318
2 Tax Credits 105,342
3 Exemptions from Total Income 267,115
4 Reduction in Tax Rates 124
5 Reduction in Tax Liability 2,839
6 Exemption from Specific Provisions 2,687
7 Others / Miscellaneous 32,621
Total 448,046
Allowances
Legal Description Intended Estimate
Sr.
Reference (Exemption or Concession) Beneficiary (Rs in Mln)
1 23 New business entities 30,110.00
Industrial undertaking set up in specified rural and under developed
2 23A 340.00
areas or engaged in the manufacturing of cellular mobile phones
3 60 Persons paying Zakat 1,116.38
Persons paying Workers’ Welfare
4 60A 2,522.40 Fund
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Persons paying Workers’ Participation Fund
5 60B 2,523.51
Individuals paying profit or share in rent and share in appreciation
6 60C for value of house on loan by banks etc 646.67
Individuals having income of less than Rs. 1.5 million, paying tuition
7 60D 59.13 fee
Total 37,318.09
Tax Credits
Legal Description Intended Estimate
Sr.
Reference (Exemption or Concession) Beneficiary (Rs in Mln)
Persons giving charitable
1 61 Tax credit for charitable donations 2,869.91
donations
Persons (excluding companies) Tax credit for investment in shares and life
2 62 investing in shares, sukuks, or 2,222.31 insurance
life insurance
Persons (excluding companies) 3 62A Tax credit for investment in health insurance 21.72
investing in health insurance
Eligible persons as defined Tax credit for contribution to an
4 63 in sub-section (19A) of 915.68 Approved Pension Fund.
section 2 of Ordinance
Tax credit for employment generation 5 64B Corporate manufacturing sector 57.40
by manufacturers
Tax credit for Non-Equity Investment in 6 65B Corporate manufacturing sector 51,408.24
Plant & Machinery
Tax credit for Equity Investment in Plant & 7 65B Corporate manufacturing sector 10,857.36
Machinery
Tax credit for enlistment in registered Stock Companies opting for enlistment 8 65C 181.17
Exchange in a registered stock exchange
Corporate industrial units
Tax credit for newly established industrial 9 65D (including corporate dairy 5,193.57
undertakings
farming)
Corporate industrial units
Tax credit for industrial undertakings 10 65E (including corporate dairy 13,131.81
established before the first day of July, 2011
farming)
Tax credit for Non-profit organizations,
Non-profit organizations, trusts, 11 100C trusts 18,482.94
welfare institutions
or welfare institutions
Total 105,342.11
Exemptions from Total Income
Legal Description Intended Estimate
Sr.
Reference (Exemption or Concession) Beneficiary (Rs in Mln)
Foreign experts working with Agha
1 3 Salary of foreign personnel engaged by institutions Khan Development Network, 119.23
of the Agha Khan Development Network (Pakistan)
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2 4 Salary received by Pakistani seafarers Employees (Pakistani seafarers) 67.68
3 5 Foreign allowances (Government of Pakistan) Employees (diplomats) 1,001.86
Pension received by a citizen of Pakistan from a4 8 Employees (pensioners) 2,732.76
former employer
Employees (retired government5 9 Pensions (Government) 13,710.00
servants & military personnel)
6 12 Commutation of Pension Employees (pensioners) 9,642.77
7 13 Gratuities Employees (recipients of gratuity 695.47
payments)
Income derived by the families and dependents of Families and dependents of the
8 17 the "Shaheeds" belonging to the Civil Armed "Shaheeds" belonging to the Civil 2.10
Forces of Pakistan Armed Forces
Encashment of leave preparatory to Employees (retiring personnel of
9 19 retirement Armed Forces or Government 1,139.86
servant)
10 22 Payments from a provident fund to which the Employees (recipient of payments 6,686.92
Provident Funds Act, 1925 applies. from provident funds
The accumulated balance due and becoming Employees participating in a
11 23 payable to an employee participating in a recognized provident fund. 246.41
recognized provident fund.
The accumulated balance up to [50]% received
from a pension fund at the time of eligible person’s- Voluntary participants in pension
12 23A (a) retirement; or funds 79.63
(b) disability rendering him unable to work; or
(c) death by his nominated survivors.
13 23B Monthly installments from an income payment Pensioners 25.17
plan invested with a pension fund manager
14 23C Withdrawal of accumulated balance from Pensioners 147.75
approved pension fund
Benevolent grants paid from the Benevolent Employees (recipient of benevolent
15 24 Fund (under Central Employee Benevolent Fund grants) 482.90
and Group Insurance Act, 1969)
16 25 Payments from an approved superannuation Families of deceased enrolled in 43.97
fund made on the death of a beneficiary approved superannuation funds
17 26 Sums received by workers from Workers Low-income workers; recipients of -
Participation Fund (WPF) payments from WPF
Employees receiving payments to
18 39 Special allowance or benefit for employees to meet meet expenses in the performance of 947.76 expenses incurred in the performance of the duties duties
19 40 Income of a newspaper employee representing Newspaper employees - Local Travelling Allowance
Employment related perquisites (food,
53A education, medical treatment and any other Employees receiving employment-20 perquisites, if provided by employer for free or related perquisites. 134.16
at subsidized rates)
21 55 House rent allowance (to judges of the Supreme 35.00 Court of Pakistan or of High Courts) Judiciary of Superior Courts
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Perquisites, benefits and allowances received by a
22 56 Judge of Supreme Court of Pakistan and Judge of Judiciary of Superior Courts 290.00
High Court
Any income from voluntary contributions, house
property and investments in securities of the
* National Investment (Unit) Trust Federal Government derived by the following,
of Pakistan,
23 57(1) namely:- 40.20 * Mutual Funds set up by National Investment (Unit) Trust of Pakistan
Investment Corporation of Pakistan (ii) Mutual Fund set up by the Investment
* Sheikh Sultan Trust Karachi. Corporation of Pakistan,
Sheikh Sultan Trust, Karachi
Income other than capital gain on stock and shares
of public company, PTC vouchers, Modaraba
certificates, or any instrument of redeemable capital
and derivative products held for less than 12 Mutual funds, investment companies,
months derived by any Mutual Fund, investment collective investment schemes, REIT
57(2) company, or a collective investment scheme or a schemes, Private Equity & Venture24 -
REIT Scheme or Private Equity and Venture Capital Funds, and National
Capital Fund or the National Investment (Unit) Investment (Unit) Trust of Pakistan
Trust of Pakistan,
if not less than ninety per cent of its income of that
year is distributed amongst the
Unit- holders.
Any income of the following funds and institution
25 57(3) (i) a provident fund to which the Provident Provident Funds 1,783.60
Funds Act, 1925 applies;
Trustees of recognized provident (ii) trustees on behalf of a recognized provident
26 57(3) fund or an approved superannuation fund or an funds, approved superannuation 13,120.00 funds, and approved gratuity approved gratuity fund; funds
(iii) a benevolent fund or group insurance scheme Benevolent funds and group
27 57(3) approved by the Board for the purposes of this insurance schemes 138.60
clause;
28 57(3) (iv) Service Fund; Service Funds; -
(v) Employees Old Age Benefits Institution Employees Old Age Benefits
29 57(3) established under the Employees Old Age Benefit Institution 5,465.78
Act, 1976 (XIV of 1976);
30 57(3) (vii) any Unit, Station or Regimental Institute; and Units, Stations or Regimental - Institutes
(vi) any recognized Regimental Thrift and Savings
31 57(3) Fund, the assets of which consist solely of deposits made Regimental Thrift and Savings Funds -
by members and profits earned by investment thereof;
32 57(3) (viii) a Pension Fund approved by the SECP Approved Pension Funds 740.18
(ix) any profit or gain or benefit derived by a pension
fund manager from a pension Fund approved under
33 57(3) the Voluntary Pension System Rules, 2005, on Pension funds under the Voluntary 15.00
redemption of the seed capital invested in pension Pension System Rules 2005
fund as specified in the Voluntary Pension System
Rules, 2005;
34 57(3) (xi) International Irrigation Management International Irrigation Management 0
Institute. Institute
(xii) Punjab Pension Fund established under the
35 57(3) Punjab Pension Fund Act, 2007 (I of 2007) and the Punjab Pension Fund 2,271.37
trust established thereunder.
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(xiii) Sindh Province Pension Fund established
under the Sindh Province Pension Fund Sindh Province Pension Fund 1,162.2636 57(3)
Ordinance, 2002.
(xiv) Punjab General Provident Investment
Punjab General Provident Investment 57(3) Fund established under the Punjab General37 Fund 161.10 Provident Investment Fund Act, 2009 (V of
2009) and the trust established thereunder.”
(xv) Khyber Pakhtunkhwa Retirement Benefits Khyber Pakhtunkhwa Retirement
38 57(3) and Death Compensation Fund. Benefits and Death Compensation 219.18
Fund
39 57(3) (xvi) Khyber Pakhtunkhwa General Provident Khyber Pakhtunkhwa General 1,118.03
Investment Fund. Provident Investment Fund
40 57(3) (xvii) Khyber Pakhtunkhwa Pension Fund ; Khyber Pakhtunkhwa Pension Fund 1,465.68
Any amount paid as donation to the following institution, foundations, societies, boards, trusts
and funds
(i) any Sports Board or institution recognized by
the Federal Government for the purposes of
41 61 ibid n.a.
promoting, controlling or regulating any sport or
game
42 61 (ia) The Citizens Foundation ibid 431.52
43 61 (iii) Fund for Promotion of Science and ibid
Technology in Pakistan -
44 61 (iv) Fund for Retarded and Handicapped ibid -
Children
45 61 (v) National Trust Fund for the Disabled ibid n.a.
46 61 (vii) Fund for Development of Mazaar of Hazrat ibid n.a.
Burri Imam
47 61 (viii) Rabita-e-Islami’s Project for printing ibid n.a.
copies of the Holy Quran
48 61 (ix) Fatimid Foundation, Karachi ibid 15.83
49 61 (x) Al-Shifa Trust ibid -
(xii) Society for the Promotion of Engineering ibid
50 61 Sciences and Technology in Pakistan -
(xxiii) Citizens-Police Liaison Committee,
51 61 Central Reporting Cell, Sindh Governor House, ibid -
Karachi
52 61 (xxiv) ICIC Foundation ibid -
53 61 (xxvi) National Management Foundation ibid -
54 61 (xxvii) Endowment Fund of the institutions of
the Agha Khan Development Network ibid -
(xxviii) Shaheed Zulfiqar Ali Bhutto Memorial55 61
Awards Society ibid n.a.
56 61 (xxix) Iqbal Memorial Fund ibid -
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57 61 (xxx) Cancer Research Foundation of
Pakistan, Lahore ibid -
58 61 (xxxi) Shaukat Khanum Memorial ibid 1,026.20
Trust, Lahore
59 61 (xxxii) Christian Memorial Hospital, Sialkot ibid 0.01
(xxxiii) National Museums, National
Libraries and Monuments or Institutions
60 61 ibid n.a.
declared to be National Heritage by the
Federal Government
61 61 (xxxiv) Mumtaz Bakhtawar Memorial Trust
Hospital, Lahore ibid 8.31
62 61 (xxxv) Kashmir Fund for Rehabilitation of
Kashmir Refugees and Freedom Fighters ibid n.a.
63 61 (xxxvi) Institutions of the Agha Khan
Development Network (Pakistan) ibid 227.00
(xxxvii) Azad Kashmir President’s Mujahid
Fund, 1972; National Institute of Cardiovascular
Diseases, (Pakistan) Karachi; Businessmen
Hospital Trust, Lahore; Premier Trust Hospital,
64 61 Mardan; Faisal Shaheed Memorial Hospital ibid
Trust, Gujranwala; Khair-un-Nisa Hospital
-
Foundation, Lahore; Sind and Balochistan
Advocates Benevolent Fund; Rashid Minhas
Memorial Hospital Fund.
65 61 (xxxviii) Any relief or welfare fund established by ibid -
the Federal Government;
66 61 (xxxix) Mohatta Palace Gallery Trust ibid -
67 61 (xl) Bagh-e-Quaid-e-Azam project, Karachi ibid -
68 61 (xli) Any amount donated for Tameer-e-Karachi
Fund ibid -
69 61 (xlii) Pakistan Red Crescent Society ibid -
(xliii) Bank of Commerce and Credit International
70 61 Foundation for Advancement of Science and ibid n.a.
Technology
71 61 (xliv) Any amount donated to Federal Board of
Revenue Foundation. ibid -
72 61 (xlv) The Indus Hospital, Karachi ibid 460.70
73 61 (xlvi) Pakistan Sweet Homes Angels and Fairies
Place ibid -
74 61 (xlvii) Al-Shifa Trust Eye Hospital ibid 33.53
75 61 (xlviii) Aziz Tabba Foundation ibid 163.52
(xlix) Sindh Institute of Urology and
76 61 Transplantation, SIUT Trust and Society for the ibid 142.42
Welfare of SIUT
77 61 (i) Sharif Trust ibid 157.41
78 61 (ii) The Kidney Centre Post Graduate Institute ibid -
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79 61 (Iii) Pakistan Disabled Foundation ibid -
80 61 (Iiii) Sardar Trust Eye Hospital, Lahore ibid -
81 61 (Iiv) Supreme Court of Pakistan - Diamer Bhasha & Mohmand Dams ibid -
82 61 (lv) Layton Rahmatullah Benevolent Trust (LRBT) ibid 270.36
83 61 (lvi) Akhuwat ibid 209.32
The Prime Minister Covid-19 Pandemic Relief 84 61 ibid -
Fund 2020
Ghulam Ishaque Khan Institute of Engineering85 61 ibid -
Science & Technology
Lahore University of Management Sciences (ivx)86 61 ibid 72.42
Dawat-e-Hadiya Karachi
87 61 Baitussalam Welfare Trust ibid 144.65
88 61 Patient’s Aid Foundation ibid 60.92
89 61 Alkhidmat Foundation ibid 3.04
90 62 Alamgir Welfare Trust International ibid 263.34
91 64A Any amount donated to the Prime Minister’s Persons making donations into the -
Special Fund for victims of terrorism said Fund.
Any amount donated to the Chief Minister’s Persons making donations into the
92 64B (Punjab) Relief Fund for Internally Displaced said Fund. -
Persons (IDPs) of NWFP.]
Prime Minister’s Flood Relief Fund 2010 and Persons making donations into the
93 64C Provincial Chief Ministers’ Relief Funds, for said Fund. -
victims of flood 2010.
Income for any tax year commencing from the tax
year 2003, derived from the Welfare Fund created
94 65A under rule-26 of the Emigration Rules, 1979 (made Emigrants and their families in
under section 16 of the Emigration Ordinance, 1979 Pakistan -
(XVIII of 1979), except the in- come generated by
the aforesaid Fund through commercial activities.
Any income derived by following entities: Specific Entities by name
Abdul Sattar Edhi Foundation,
95 66 i. Abdul Sattar Edhi Foundation, Karachi 870.84
Karachi
96 66 ii. Al-Shifa Trust, Rawalpindi Al-Shifa Trust, Rawalpindi -
97 66 iii. Bilquis Edhi Foundation, Karachi Bilquis Edhi Foundation, Karachi 429.47
98 66 iv. Fatimid Foundation, Karachi Fatimid Foundation, Karachi -
99 66 vi. International Islamic Trade Finance International Islamic Trade Finance -
Corporation Corporation
100 66 vii. Islamic Corporation for Development of Private Islamic Corporation for Development -
Sector of Private Sector
101 66 viii. National Memorial Bab-e-Pakistan Trust National Memorial Bab-e- -
Pakistan Trust
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102 66 ix. Pakistan Agricultural Research Council, Pakistan Agricultural Research 0.40
Islamabad Council, Islamabad
103 66 x. Pakistan Engineering Council Pakistan Engineering Council 480.10
xi. The corporatized entities of Pakistan Water The corporatized entities of
104 66 and Power Development Authority Pakistan Water and Power 5,209.13
Development Authority
105 66 xii. The Institution of Engineers, Pakistan, Lahore The Institution of Engineers, 11.00 Pakistan, Lahore
106 66 (xiia) The Prime Minister’s Special Fund for The Prime Minister’s Special Fund -
victims of terrorism for victims of terrorism
(xiib) Chief Minister’s (Punjab) Relief Fund for Chief Minister’s (Punjab) Relief
107 66 Internally Displaced Persons (IDPs) of NWFP Fund for Internally Displaced -
Persons (IDPs) of NWFP
108 66 xiii. The Institutions of the Agha Khan The Institutions of the Agha Khan 1,445.65
Development Network (Pakistan) Development Network (Pakistan)
109 66 xiv. The Liaquat National Hospital Association, The Liaquat National Hospital 196.01
Karachi Association, Karachi
The Pakistan Council of Scientific
110 66 xv. The Pakistan Council of Scientific and and 125.11 Industrial Research Industrial Research
111 66 xvi. The Pakistan Water and Power Development The Pakistan Water and Power 19,496.60
Authority Development Authority
112 66 xvii. WAPDA First Sukuk Company Limited WAPDA First Sukuk Company -
Limited
(xix) Pension of a former President of Pakistan Former Presidents of Pakistan and
113 66 and his widow under the President Pension Act, their widows -
1974
(xx) State Bank of Pakistan and State Bank of State Bank of Pakistan and State
114 66 Pakistan Banking Services Corporation Bank of Pakistan Banking Services 48,514.55
Corporation
115 66 (xxi) International Finance Corporation International Finance Corporation -
116 66 Pakistan Domestic Sukuk Company -
(xxii) Pakistan Domestic Sukuk Company Ltd Ltd
117 66 (xxiii) The Asian Development Bank The Asian Development Bank -
118 66 (xxiv) The ECO Trade and Development Bank The ECO Trade and 552.51
Development Bank
(xxv) The Islamic Chamber of Commerce and The Islamic Chamber of Commerce
119 66 Industry under the Organization of Islamic and Industry under the Organization -
Conference (OIC) of Islamic Conference (OIC)
120 66 (xxvi) COMSATS COMSATS -
(xxvii) WAPDA on issuance of twenty billion
121 66 rupees TFC’s/SUKUK certificates for WAPDA -
consideration of Diamer Bhasha Dam Projects
Federal Board of Revenue122 66 (xxviii) Federal Board of Revenue Foundation -
Foundation
123 66 (xxix) WAPDA Second Sukuk Company WAPDA Second Sukuk Company -
Limited Limited
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124 66 (xxx) The Citizens Foundation The Citizens Foundation 66.07
(xxxi) Sindh Institute of Urology and Sindh Institute of Urology and
125 66 Transplantation, SIUT Trust and Society for the Trans- plantation, SIUT Trust and 918.73
Welfare of SIUT Society for the Welfare of SIUT
126 66 (xxxii) Greenstar Social Marketing Pakistan Greenstar Social Marketing 82.94
(Guarantee) Limited Pakistan (Guarantee) Limited
(xxxiii) Pakistan International Sukuk Company Pakistan International Sukuk
127 66 Limited Company n.a.
Limited
128 66 (xxxiii) The Indus Hospital, Karachi The Indus Hospital, Karachi 120.52
129 66 (xxxiv) Second Pakistan International Sukuk Second Pakistan International Sukuk -
Company Limited Company Limited
130 66 (xxxv) Third Pakistan International Sukuk Third Pakistan International -
Company Limited Sukuk Company Limited
(xxxvi) Asian Infrastructure Investment Bank and
persons as provided in Article 51 of Chapter IX of
131 66 the Articles of Agreement signed and ratified by Asian Infrastructure Investment Bank -
Pakistan and entered into force on the 25th
December, 2015.
132 66 (xxxvii) Gulab Devi Chest Hospital. Gulab Devi Chest Hospital. -
133 66 (xxxviii) Pakistan Poverty Alleviation Fund. Pakistan Poverty Alleviation Fund. 617.33
134 66 (xxxix) National Academy of Performing Arts. National Academy of Performing 5.20
Arts.
135 66 (xl) Pakistan Sweet Homes Angels and Fairies Pakistan Sweet Homes Angels and 19.37
Place. Fairies Place.
136 66 (xli) National Rural Support Programme. National Rural Support Programme. 420.10
137 66 (xlii) SAARC Energy Centre. SAARC Energy Centre. -
138 66 (xliii) Pakistan Bar Council. Pakistan Bar Council. 0.74
139 66 (xliv) Pakistan Centre for Philanthropy. Pakistan Centre for Philanthropy. 5.11
140 66 (xlv) Pakistan Mortgage Refinance Company Pakistan Mortgage Refinance 264.18
Limited. Company Limited.
141 66 (xlvi) Aziz Tabba Foundation. Aziz Tabba Foundation. 46.12
142 66 (l) Al-Shifa Trust Eye Hospital. Al-Shifa Trust Eye Hospital. n.a.
143 66 (li) Saylani Welfare International Trust. Saylani Welfare International Trust. 34.00
144 66 (lii) Shaukat Khanum Memorial Trust. Shaukat Khanum Memorial Trust. 2200.66
145 66 (liii) Layton Rahmatullah Benevolent Trust Layton Rahmatullah Benevolent Trust
(LRBT). (LRBT). -
146 66 (liv) The Kidney Centre Post Graduate Training The Kidney Centre Post Graduate
Institute. Training Institute. 14.00
147 66 (lv) Pakistan Disabled Foundation. Pakistan Disabled Foundation. -
148 66 (lvi) Forman Christian College; Forman Christian College; 94.47
149 66 (lvii) Habib University Foundation. Habib University Foundation. 3.21
Page | 9 - Tax Expenditure Estimates 2021Page 10
150 66 (lviii) Begum Akhtar Rukhsana Memorial Trust Begum Akhtar Rukhsana Memorial
Hospital. Trust Hospital. -
151 66 (lix) Al-Khidmat Foundation. Al-Khidmat Foundation. -
152 66 (lx) Dawat-e-Islami Trust Dawat-e-Islami Trust 263.38
153 66 (Ixi) Sardar Trust Eye Hospital, Lahore. Sardar Trust Eye Hospital, Lahore. -
154 66 (lxii) Supreme Court of Pakistan - Diamer Supreme Court of Pakistan - Diamer
Bhasha & Mohmand Dams - Fund Bhasha & Mohmand Dams - Fund 0.30
155 66 (lxiii) National Disaster Risk Management National Disaster Risk
Fund. Management Fund. 57.20
Deposit Protection Corporation
156 66 (lxiv) Deposit Protection Corporation (Already accounted for under sub- 4,377.60
clause (xx) under consolidated figure
for SBP)
157 66 (lxv) Sarmaya-e-Pakistan Limited Sarmaya-e-Pakistan Limited -
158 66 (lxvi) Akhuwat (lxvi) Akhuwat 192.86
159 66 (lxvii) Audit Oversight Board. Audit Oversight Board. 5.68
160 66 (lxviii) Patient’s Aid Foundation. Patient’s Aid Foundation. 13.00
Any income derived by Sukuk holder in relation to
Sukuk issued by “The Second Pakistan
161 72A International Sukuk Company Limited” and the Sukuk holders 3,436.50
Third Pakistan International Sukuk Company
Limited, including any gain on disposal of such
Sukuk.
162 74 Profit on debt derived by Hub Power Company Hub Power Company Limited 9.37
Limited on or after the first day of July,1991
Any income of an agency of a foreign
Government, a foreign national (company, firm
or association of persons), or any other Agencies of foreign Governments,
163 75 Nonresident person approved by the Federal foreign nationals or any other 7,362.80
Government for the purposes of this clause, from non-resident person approved by the
profit on moneys borrowed under a loan Federal Government
agreement or in respect of foreign currency
instrument approved by the Federal Government.
164 78 Profit on debt on foreign currency accounts Foreign currency account holders n.a.
165 79 Profit on debt derived by non-resident Citizens of Pakistan residing abroad
Pakistanis on rupee accounts and remitting foreign exchange n.a.
Income derived from a private foreign currency
account held with an authorized bank in Pakistan,
or certificate of investment issued by investment Foreign currency account holder
166 80 banks, by a resident individual who is a citizen of resident individual citizens of -
Pakistan: (This exemption Pakistan
is not available in respect of any incremental
deposits made in the said accounts on or after the
16th day of December, 1999)
Profit on debt payable by Pakistani industrial Financial institutions in foreign
167 90 undertakings to financial institutions in foreign countries lending with approval of n.a.
countries Federal Government of Pakistan
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Profit on debt derived by any person on bonds Investors / buyers of bonds issued by
issued by Pakistan Mortgage Refinance Company Pakistan Mortgage Refinance168 90A 4.20
to refinance the residential housing mortgage Company
market, for a period of five years
169 91 Text-book boards of Provinces Text-book boards of provinces 583.40
Regulators, organizations and
170 98 Sports Boards (except Pakistan Cricket Board). boards established by government 61.84
to en- courage major games and
sports
Collective Investment Schemes and
Collective Investment Schemes or a REIT REIT Schemes that are distributing171 99
Schemes more than 90% of their incomes to 16,176.50
certificate holders / shareholders.
Profits and gains on sale of immovable property to Taxpayers selling immovable
172 99A a REIT Scheme property to a Developmental REIT -
Scheme or a rental REIT Scheme
173 100 Modarabas Modarabas 261.25
Venture capital companies & venture capital
funds registered under Venture Capital Venture capital companies
174 101 Companies and Funds Management Rules, venture capital funds, and Private 3.63
2000 and a Private Equity and Venture Capital Equity & Venture Capital Funds.
Funds
175 102A Income representing a subsidy granted by the Recipients of subsidies granted by 4,508.87
Federal Government Federal Government
Distributions received by a taxpayer from
collective investment schemes or mutual funds Investors investing in debt or
176 103 (which are debt or money market funds and do not money market mutual funds and 1.00
invest in shares) out of capital gains collective investment schemes
Income derived by the Libyan Arab Foreign
177 104 Investment Company being dividend of the Libyan Arab Foreign Investment -
Pak-Libya Holding Company. Company
Income derived by the Government of Kingdom of
Saudi Arabia being dividend of the Saudi-Pak Government of Kingdom of
178 105 Industrial and Agricultural Investment Company Saudi Arabia 26.00
Limited.
Income derived by Kuwait Foreign Trading Kuwait Foreign Trading
179 105A Contracting and Investment Company or Kuwait Contracting & Investment 67.50
Investment Authority being dividend of the Pak Company, and Kuwait Investment
Kuwait Investment Company in Pakistan Authority
Income received by a taxpayer from a corporate Taxpayers receiving dividend
180 105B agricultural enterprise, distributed as dividend income from corporate agricultural 44.00
out of its income from agriculture. enterprises
Any gain on transfer of a capital asset, being a
membership right held by a member of an existing
stock exchange, for acquisition of shares and
181 110B trading or clearing rights acquired by such Members of Stock Exchange -
member in new corporatized stock exchange in
the course of corporatization of an existing stock
exchange.
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Any gain by a person on transfer of a capital asset,
being a bond issued by Pakistan Mortgage Refinance Persons deriving gain from
182 110C Company to refinance the residential housing bonds issued by Pakistan -
mortgage market, during the period from the 1st day Mortgage Refinance Company
of July, 2018 till the 30th day of June, 2023.
Income under the head “capital gains” derived by Industrial undertakings set up in
industrial undertakings set up in a “Zone” within “Zones” within the meaning of
183 114 n.a. the meaning of the Export Processing Zones Export Processing Zones Authority
Authority Ordinance, 1980 Ordinance
184 126 Public sector universities Public sector universities 10,715.95
Income derived by China Overseas Ports Holding
Company Limited, China Overseas Ports Holding
Company Pakistan (Private) Limited, Gawadar
185 126A International Terminal Limited, Gawadar Marine Listed companies 65.12
Services Limited and Gawadar Free Zone
Company Limited from Gawadar Port operations
for a period of twenty three years, with effect from
the sixth day of February, 2007.
Profit and gains derived by a taxpayer from All businesses set up in Gawadar
186 126AA businesses set up in the Gawadar Free Zone Free Zone -
Area
Profit on debt derived by-
(a)any foreign lender; or
Foreign lenders or public sector (b) any local bank having more than 75 per cent
banks/ State bank having financing187 126AB shareholding of the Government or the State - agreement with China Overseas Ports Bank of Pakistan, under a Financing
Holding Company Limited Agreement with the China Overseas Ports
Holding Company Limited
Income derived by contractors and sub-con-
tractors of China Overseas Ports Holding Company
Limited, China Overseas Ports Holding Company Contractors and sub-contractors of
188 126AC Pakistan (Private) Limited, Gawadar International listed companies from Gawadar Port 105.52
Terminal Limited, Gawadar Marine Services operations
Limited and Gawadar Free Zone Company Limited
from Gawadar Port operations
Income derived by China Overseas Ports Holding
Company Limited being dividend received from
189 China Overseas Ports Holding Company Pakistan China Overseas Ports Holding 126AD (Private) Limited, Gwadar International Terminal Company Limited -
Limited Gwadar Marine Services Limited and
Gwadar Free Zone Company Limited
190 126B Profit and gains derived by Khalifa Coastal Khalifa Coastal Refinery -
Refinery
191 126BA Refineries Oil refineries 1,724.66
192 126C Industrial undertakings set up in Larkano Industrial Industrial undertakings set up in -
Estate Larkano Industrial Estate
Industrial undertakings set up in the Gawadar
193 declared by the Federal Government to be a Zone Industrial undertaking set up in the 126D within the meaning of Export Processing Zone Gawadar -
Authority Ordinance, 1980
Income derived by a zone enterprise as de- fined Zone enterprise as defined in the
194 126E in the Special Economic Zones Act, 2012 and Special Economic Zones Act, 2012, 200.00
developer of zone for a period of ten years and developers of zones.
Page | 12 - Tax Expenditure Estimates 2021Page 13
Income of Astro Plastics (Pvt) Limited derived
from their project Biaxially Oriented Polyethylene Astro Plastics (Pvt)
195 126G Terephthalate (BOPET) Project; and 2. Income of Limited, M/s. Novatex -
Novatex Limited derived from their project Limited
Biaxially Oriented Polyethylene Terephthalate
(BOPET) Project.
Income from fruit processing or preservation units Fruit processing or preservation
196 set up in Balochistan Province, Malakand Division, units set up in Balochistan 126H -
Gilgit Baltistan and FATA Province, Malakand Division,
Gilgit Baltistan and ex-FATA
Industrial undertakings engaged in the Manufacturers of plant, machinery
197 manufacture of plant, machinery, equipment and & equipment for use in generation 126I 12.00
items with dedicated use for generation of of renewable energy sources.
renewable energy
Profits and gains derived by a taxpayer, from an Industrial undertakings engaged in
198 industrial undertaking engaged in operating operating warehousing or cold chain 126J n.a. warehousing or cold chain facilities for storage of facilities for storage of agriculture
agriculture produce produce
Profits and gains derived by industrial
199 126K undertakings set up for establishing and operating Halal meat production units -
a halal meat production unit
Industrial undertakings set up in the
Industrial undertakings set up in the Provinces of Provinces of Khyber Pukhtunkhwa
200 126L Khyber Pukhtunkhwa and Baluchistan and Baluchistan between 1st day of 96.55
July, 2015and 30th day of June,
2018
201 126M Profits and gains derived by a taxpayer from a Companies deriving income from 4.10
transmission line project set up in Pakistan transmission line projects in Pakistan
Profits and gains derived by a taxpayer from an
202 126N industrial undertaking, duly certified by the Local cellular mobile phone 0.40
Pakistan Telecommunication Authority, en- gaged manufacturers
in the manufacturing of cellular mobile phones
Profits and gains of a company from a green field
203 126O industrial undertaking incorporated on or after the Green field industrial undertakings -
first day of July, 2019
Royalty, commission or fees earned from a
foreign enterprise in consideration for the use
204 131 outside Pakistan of any patent, invention, model, Innovators and technical experts 1.50
design, secret process or formula or similar
property right
Profits and gains derived by a taxpayer from an
205 132 electric power generation project set up in Electric power generation projects 47,528.40
Pakistan on or after the 1st day of July, 1988.
206 132A Profit and gains derived by Bosicor Oil Pakistan Bosicor Oil Pakistan Limited -
Limited (refinery)
207 132B Coal mining projects in Sindh, supplying coal Coal mining projects in Sindh -
exclusively to power generation projects.
208 133 Income from exports of computer software or IT Exporters of computer software, 1,944.60
services or IT enabled services IT services or IT enabled services
Income derived by non-residents from investment Non-residents deriving income
209 in OGDCL exchangeable bonds issued by the from investment in OGDCL 135A -
Federal Government. exchangeable bonds issued by the
Federal Government.
Page | 13 - Tax Expenditure Estimates 2021Page 14
Income of a special purpose vehicle as defined Special purpose vehicles as
210 136 in the Asset Backed Securitization Rules, 1999 defined in the Asset Backed -
Securitization Rules, 1999
211 139 Medical treatment or hospitalization for Employees receiving free medical 1,825.76
employees care from employers.
212 141 Profit and gains derived by LNG Terminal LNG Terminal Operators and 1,714.29
Operators and Terminal Owners Terminal Owners
213 142 Income from social security contributions derived by Provincial social security institutions 5,636.22
the four provincial Social Security institutions
Startups as defined in clause (62A)
214 143 Start-ups of 552.75
section 2 of the ITO-2001
Individuals domiciled or Income of individuals domiciled or companies and 145A, companies and associations of215 associations of persons resident in the erstwhile 4,460.00 146 persons resident in the ex-Tribal Tribal Areas Areas
16,
216 39A, Others Others 1,203.40
51, 52
Total 267,115.10
Reduction in Tax Rates
Legal Description Intended Estimate
Sr.
Reference (Exemption or Concession) Beneficiary (Rs in Mln)
The tax in respect of income from services
rendered outside Pakistan and construction
1 3 contracts executed outside Pakistan shall be Service providers and contractors -
50% of the rates as specified in Division III
of Part III of the First Schedule
The income of Pakistan Cricket Board
derived from sources outside Pakistan shall
2 3B Pakistan Cricket Board - be taxed at a rate of four per cent of the gross
receipts from such sources
In the case of a Modaraba the rate of income
tax shall be 25% of total income excluding
3 18 such part of total income to which Division Modarabas -
III of Part I of the First Schedule or
section153 or section 154 applies.
The rate of tax shall be reduced to 20% for a
company setting up an industrial
undertaking between the first day of July,
2014 to the thirtieth day of June, 2017, for a Companies setting up industrial
4 18A period of five years beginning from the undertakings between 2014 and 2017 -
month in which the industrial undertaking is
set up or commercial production is
commenced whichever is later
Page | 14 - Tax Expenditure Estimates 2021Page 15
The rate of tax shall be reduced by 2% in case
of a company whose shares are traded on
stock exchange if it fulfills prescribed Shariah
compliant criteria approved by State Bank of Shariah compliant companies whose -5 18B Pakistan, Securities and Exchange shares are traded on stock exchange
Commission of Pakistan and the Board, and
derives income from manufacturing activities
only
The tax on payments under the Compulsory
Monetization of Transport Facility for Civil
6 27 Servants in BS-20 to BS-22 (as reduced by Employees (civil servants of BS-20 100.00
deduction of driver’s salary) shall be charged and above)
at the rate of 5% as a separate block of
income.
The rate of tax under section 148 on import of
hybrid cars shall be reduced as below:-
7 28A Up to 1200 cc - 100% Consumers of Hybrid Cars 24.00
1201 to 1800 cc - 50%
1801 to 2500 cc - 25%
The rates of tax as specified in Division II of
Part-IV of the First Schedule shall be five
8 28C per- cent in the case of a person running E-commerce sector -
online marketplace as defined in clause (38B)
of section 2.
Total 124.00
Reduction in Tax Liability
Legal Description Intended Estimate
Sr.
Reference (Exemption or Concession) Beneficiary (Rs in Mln)
Any amount received as flying allowance by
flight engineers, navigators of Pakistan
Armed Forces, Pakistani Airlines or Civil
Aviation Authority, Junior Commissioned Employees (persons receiving flying1 1(1) 91.07 Officers or other ranks of Pakistan Armed allowance)
Forces; and submarine allowance by the
officers of the Pakistan Navy, shall be taxed
@ 2.5% as a separate block of income
Total allowances received by pilots of any
Pakistani airlines shall be taxed at a rate of
Employees (pilots of Pakistani2 1(1AA) 7.5%, provided that the reduction under this 321.18
clause shall be available to so much of the Airlines)
allowances as exceeds an amount equal to the
basic pay
Tax concession for full time teacher or Employees (full time teacher or a
3 1(2) 2,425.00
a researcher researcher)
In respect of old and used automotive
vehicles, tax under section 148 shall not
4 4 exceed the amount specified in Notification Importers of old and used cars 1.30
No. S.R.O.
577(I)/2005, dated the 6th June, 2005.
The amount of tax payable by foreign
5 7 Film makers from making films in Pakistan Foreign film-makers -
shall be reduced by fifty percent on income
from film-making in Pakistan.
The amount of tax payable by resident
Film making companies based in6 8 companies deriving income from film- - Pakistan making shall be reduced by seventy percent
on income from film-making.
Page | 15 - Tax Expenditure Estimates 2021Page 16
The tax payable on profits and gains derived Taxpayers deriving income from
7 9 by a person from low cost housing projects low cost housing projects n.a.
shall be reduced by fifty percent.
Total 2,838.55
Exemption from Specific Provisions
Legal Description Intended Estimate
Sr.
Reference (Exemption or Concession) Beneficiary (Rs in Mln)
The provisions of section 111 regarding
un-explained income or assets shall not
apply in respect of foreign exchange
1 5 deposited in a private Foreign Currency Foreign currency account holders -
account, excluding such accounts where
incremental deposits were made on or after
the 16th day of December, 1999
2 11A (iii) Pakistan Red Crescent Society Pakistan Red Crescent Society 4.52
3 11A (xiv) Corporate and Industrial Corporate and Industrial -
Restructuring Corporation (CIRC) Restructuring Corporation (CIRC)
(xxxi) National Disaster Risk National Disaster Risk
4 11A Management Fund. Management Fund. 57.20
Note: Other entities under clause 11A which count as tax expenditure have
Already been covered in Part 1 of Second Schedule (above).
The provisions of section 148 shall not apply
for import of plant, machinery and M/s China State Construction
equipment in the case of:- Engineering Corporation Ltd. (M/s
5 60A (a) M/s China State Construction CSCEC); and M/s China 840.00 Engineering Corporation Ltd. (M/s Communication Construction
CSCEC); and Company (M/s CCCC).
(b) M/s China Communication
Construction Company (M/s CCCC).
The provisions of section 148 shall not apply
on import of firefighting equipment by
6 60D industrial undertakings set up in the special Industrial undertakings set up in the 25.00
special economic zones economic zones established by the Federal
Government.
M/s Dawat-e-Hadiya, Karachi and Lahore
University of Management Sciences,
Lahore] shall be deemed to have been
M/s Dawat-e-Hadiya, Karachi
7 63 approved by the Commissioner for the - and Lahore University of purpose of sub-section
Management Sciences, Lahore (36) of section 2 notwithstanding the
provisions of clause (c) of sub-section (36) of
section 2..
The provisions of this Ordinance shall not be
8 71 applicable to the M/s TAISEI Corporation M/s TAISEI Corporation - un- der the agreement between National
Highway Authority, GOP
Provisions of sections 148 and 153 shall not Importers and suppliers of items with
9 77 be applicable on import and subsequent dedicated use of renewable sources of 1,230.00
supply of items with dedicated use of energy
renewable sources of energy
Page | 16 - Tax Expenditure Estimates 2021Page 17
Coal Mining and Coal based Power
Generation Projects in Sindh:-
(i) the dividend income of the shareholders
of such a project shall be exempt from
provisions of section 150. Shareholders of coal mining and coal
10 78 (ii) the payments made on account of sale based power generation projects in 0.68
or supply of goods or providing or Sindh
rendering of services during project
construction and operations, shall be
exempt from the provisions of section
152(2A) and section 153.”
The provisions of section 148 shall not
apply to-
(i) Tillage and seed bed preparation
(ii) equipment as specified below
(iii) Seeding or planting equipment
11 91 (iv) Irrigation, drainage and agro-chemical Farming sector 530.00
application equipment
(v) Harvesting, threshing and storage
equipment
(vi) Post-harvest handling and processing &
miscellaneous machinery
The provisions of section 231B (1A) shall Beneficiaries of PM’s Youth
12 102 not apply to light commercial vehicles Business - leased un- der the Prime Minister’s Youth Loan Scheme
Business Loan Scheme.
Total 2,687.40
Others / Miscellaneous
Legal Description Intended Estimate
Sr.
Reference (Exemption or Concession) Beneficiary (Rs in Mln)
1 41 Agricultural income Agriculture sector -
2 49 Federal Government, Provincial Government organizations 32,620.45
Government, and Local Government income.
Total 32,620.45
Grand Total 448,045.70
SALES TAX ESTIMATES
Sr Summary of Tax Expenditure Estimates of Sales Tax - FY 2020 Rs. Million
1 Zero Rating under 5th Schedule to Sales Tax Act 1990 12,887
2 Exemption under 6th Schedule on (Imports) 173,808
3 Exemption under 6th Schedule on Local supplies (after 30% adjustment) 156,134
4 Reduced Rates Under 8th Schedule (1%) 330
5 Reduced Rates Under 8th Schedule (2%) 90,288
6 Reduced Rates Under 8th Schedule (5%) 27,108
7 Reduced Rates Under 8th Schedule (7%) 496
8 Reduced Rates Under 8th Schedule (8%) 1,396
Page | 17 - Tax Expenditure Estimates 2021Page 18
10 Reduced Rates Under 8th Schedule (10%) 69,592
11 Reduced Rates Under 8th Schedule (12%) 19,321
12 Sales Tax on cellular Mobile Phones under 9th Schedule 27,096
Total 578,456
Tax Exemption under 5th Schedule (Zero rated Items )
S.No SCHEDULE ITEM Beneficiary Tax Expenditure
Preparations suitable for infants, Manufacturing (Industrial
Section 4
1 (Zero Rated) put up for retail sale] (PCT Inputs) General Masses (Food 8,202
Heading 1901.1000) products)
Supplies of raw materials
Section 4 components and goods for further
2 (Zero Rated) manufacture of goods in the Exporters, General Masses 1,934
Export Processing Zones.
Section 4 Supply, repair or maintenance of Manufacturing (Industrial
3 (Zero Rated) any ship which is neither; Inputs) 1,755
Raw materials, components, sub-
components and parts, if imported
or purchased locally for use in the
manufacturing of such plants and
machinery as is chargeable to sales
tax at the
rate of zero percent, subject to the
condition that the importer
Section 4 or purchaser of such goods holds a Manufacturing (Industrial
4 (Zero Rated) valid sales tax registration Inputs) 995
showing his registration category
as “manufacturer”; and in
case of import , all the conditions,
restrictions, limitations and
procedures as are imposed by
notification under section 19 of
the Customs Act,1969(IV of
1969), shall apply
Supply to diplomats, diplomatic
missions, privileged persons and
privileged organizations which are
Section 4 covered under various Acts,
5 (Zero Rated) Orders, Rules, Regulations and Diplomatic Supplies 842
Agreements passed by the
Parliament or issued or agreed by
the Government of Pakistan.]
Section 4 Pens, ball pens, markers and
6 (Zero Rated) porous tipped pens Educational Items 608
Raw materials, packing materials, Manufacturing (Industrial
sub-components, components, sub- Inputs) General Masses
assemblies and assemblies
imported or purchased locally for
Section 4
7 (Zero Rated) the manufacture of the goods 439
specified at S.no. 12 of 5th
Schedule to Sales Tax Act, 1990,
subject to the conditions,
limitations
Import Of Color sets, writing, Manufacturing (Industrial
Section 4 drawing and marking inks and Inputs) General Masses
8 (Zero Rated) Erasers (4016.9210 and), Exercise (educational Items) 439
Books (4820.2000), Pencil
Page | 18 - Tax Expenditure Estimates 2021Page 19
Sharpener (8214.1000), Geometry
boxes (9017.2000), Pen, Ball pens,
markers and porous tipp
12. Goods and the raw materials, Manufacturing (Industrial
packing materials, sub- Inputs) General Masses
components, components, sub-
Section 4 assemblies and assemblies
9 (Zero Rated) imported or purchased locally for 439
the manufacture of the said goods,
limitations and restrictions as
specified in chapter xiv of sale
Manufacturing (Industrial
Section 4 12(xxiv) Pencil sharpeners (PCT
10 (Zero Rated) heading 8214.1000) Inputs) General Masses 303
(Educational Items)
Section 4 Manufacturing (Industrial
11 (Zero Rated) Others Inputs) General Masses 266
Manufacturing (Industrial
Section 4 Exercise books (PCT heading
12 (Zero Rated) 4820.2000) Inputs) General Masses 238
(Educational Items)
Section 4 Manufacturing (Industrial
13 (Zero Rated) Bicycles (PCT heading 87.12). Inputs) General Masses 140
Manufacturing (Industrial
Section 4 12(xxii) Erasers (PCT heading
14 (Zero Rated) 4016.9210 and 4016.9290) Inputs) General Masses 138
(Educational Items)
Section 4 1(ii) Supply, repair or maintenance Manufacturing (Industrial
15 (Zero Rated) of any aircraft which is neither; Inputs) 127
Manufacturing (Industrial
Section 4 Pencils including color pencils
16 (Zero Rated) (PCT heading 96.09) Inputs) General Masses 124
(Educational Items)
Supplies made to exporters under
the Duty and Tax Remission
Section 4 Rules, 2001 subject to the Manufacturing (Industrial
11517 (Zero Rated) observance of procedures, Inputs) Exporters,
restrictions and conditions
prescribed therein
Imports or supplies made to
Gawadar Special Economic Zone,
excluding vehicles falling under
Special Economic Zone,
Section 4 heading 87.02 of the Pakistan
18 (Zero Rated) Customs Tariff, subject to such Manufacturing (Industrial 96
Inputs)
conditions, limitations and
restrictions as the 3 [Board] may
impose. ]
6 Supplies of such locally
manufactured plant and machinery
6 to petroleum and gas sector
Exploration and Production
companies, their contractors and
Section 4 Manufacturing (Industrial
19 (Zero Rated) sub-contractors] as may be Inputs) 80
specified by the Federal
Government, by notification in the
official Gazette, subject to such
conditions and restrictions as may
be specified in such notification.]
Supplies of locally manufactured
plant and machinery of the
following specifications, to
Section 4 Manufacturing (Industrial
20 (Zero Rated) manufacturers in the Export Inputs) 51
Processing Zone, subject to the
conditions, restrictions and
procedure given below, namely:-
Page | 19 - Tax Expenditure Estimates 2021Page 20
Section 4 ship of gross tonnage of less than Manufacturing (Industrial
21 (Zero Rated) 15 LDT; nor Inputs) 49
Section 4 9 Goods exempted under section Manufacturing (Industrial
22 (Zero Rated) 13, if exported by a manufacturer Inputs) 42
Manufacturing (Industrial
Section 4 12(xxi) Writing, drawing and
23 (Zero Rated) marking inks (PCT heading. Inputs) General Masses 39
(Educational Items)
1(iii) Supply of spare parts and
Section 4 Manufacturing (Industrial
24 (Zero Rated) equipment for ships and aircraft Inputs) 35
falling under (i) and (ii) above.
1(v) Supply of equipment and
Section 4 Manufacturing (Industrial
25 (Zero Rated) machinery for air navigation Inputs) 22
services.
Manufacturing (Industrial
Section 4 12(xxv) Geometry boxes (PCT
26 (Zero Rated) heading 9017.2000) Inputs) General Masses 10
(educational Items)
Manufacturing (Industrial
Section 4 12(xx) Colors in sets (PCT
27 (Zero Rated) heading 3213.1000). Inputs) General Masses 6
(Educational Items)
1(ii)(b) an aircraft designed or
Section 4 Manufacturing (Industrial
28 (Zero Rated) adapted for use for recreation or Inputs) 6
pleasure.
6(A) supply of Locally
Section 4 Manufacturing (Industrial
29 (Zero Rated) manufactured plant and machinery Inputs) Exporters 6
(EPZ)
1(vi) Supply of equipment and
machinery for other services
Section 4 Manufacturing (Industrial
30 (Zero Rated) provided for the handling of ships Inputs) 4
or aircraft in a port or Customs
Airport
1(iv) Supply of equipment and
Section 4 Manufacturing (Industrial
31 (Zero Rated) machinery for pilot age, salvage or Inputs) 3
towage services.
Supplies to duty free shops,
provided that in case of clearance
from duty free shops against
Manufacturing (Industrial
Section 4 various baggage rules issued under
32 (Zero Rated) the Customs Act, 1969, (IV of Inputs) Diplomatic Supplies 3
and General Masses
1969), the supplies from duty free
shops shall be treated as import for
the purpose of levy of sales tax.
6(A) supply of Locally Manufacturing (Industrial
Section 4
33 (Zero Rated) manufactured plant and machinery Inputs) Export Processing 3
(EPZ) Zones
Section 4 1(i)(b) a ship designed or adapted Manufacturing (Industrial
34 (Zero Rated) for use for recreation or pleasure. Inputs) 2
6(A)(iv)Parts of machinery as
Section 4 specified in clauses (i), (ii) and Manufacturing (Industrial
35 (Zero Rated) (iii), identifiable for use in or with Inputs) 1
such machinery.
Section 4 1(ii)(a) an aircraft of weight-less Manufacturing (Industrial
36 (Zero Rated) than 8000 kilograms; nor Inputs) 1
6(A)(iii) Mechanical and electrical
control and transmission gear,
Section 4 Manufacturing (Industrial
37 (Zero Rated) meant or adapted for use in Inputs) 1
conjunction with machinery
specified in clause (i); and
6(A)(ii) Apparatus, appliances and
Section 4 Manufacturing (Industrial
38 (Zero Rated) equipment specifically meant or Inputs) 0
adapted for use in conjunction with
Page | 20 - Tax Expenditure Estimates 2021Page 21
the machinery specified in clause
(i);
6(A)(i) Plant and machinery,
operated by power of any
Section 4 Manufacturing (Industrial
39 (Zero Rated) description, as is used for the Inputs) 0
manufacture or production of
goods by that manufacturer;
Sub Total 17,562
Less Adjustments 4,675
Total 12,887
Adjustments
* Note-I (adjustment in estimation): In case of zero-rated items, the adjustment includes leaving out tax expenditure
estimation on some items, which if were not zero-rated, the full input tax would have been claimed, such as crude oil,
machinery for E&P sector, and material related to exports. The tax expenditure to the extent of these items is thus deducted
from the total estimation of Part 1 (zero rated items). Item-wise cost is below:
Tax Exemption under 5th Schedule (Zero rated Items )
Tax
S.No Legal Ref ITEM Beneficiary
Expenditure
Manufacturing
Supplies of raw materials components and goods for
Section 4 (Industrial Inputs)
1 (Zero Rated) further] manufacture of goods in the Export Exporters, General 1,934
Processing Zones.
Masses
Raw materials, components, sub-components and
parts, if imported or purchased locally for use in the
manufacturing of such plants and machinery as is
chargeable to sales tax at the rate of zero percent,
subject to the condition that the importer or purchaser
Section 4 Manufacturing
2 (Zero Rated) of such goods holds a valid sales tax registration (Industrial Inputs) 995
showing his registration category as “manufacturer”;
and in case of import , all the conditions, restrictions,
limitations and procedures as are imposed by
notification under section 19 of the Customs
Act,1969(IV of 1969), shall apply
Supply to diplomats, diplomatic missions, privileged
persons and privileged organizations which are
Section 4 covered under various Acts, Orders, Rules,
3 (Zero Rated) Regulations and Agreements passed by the Diplomatic Supplies 842
Parliament or issued or agreed by the Government of
Pakistan.
Section 4 Pens, ball pens, markers and porous tipped pens (PCT Educational Items/
4 (Zero Rated) heading 96.08) General Masses 608
7 Supplies made to exporters under the Duty and Tax
Manufacturing
Section 4 Remission Rules, 2001 subject to the observance of
5 (Zero Rated) procedures, restrictions and conditions prescribed (Industrial Inputs), 115
Exporters
therein.]
6 Supplies of such locally manufactured plant and
machinery to petroleum and gas sector Exploration
and Production companies, their contractors and sub-
Section 4 Manufacturing
6 (Zero Rated) contractors] as may be specified by the Federal (Industrial Inputs) 80
Government, by notification in the official Gazette,
subject to such conditions and restrictions as may be
specified in such notification.]
6(A) Supplies of locally manufactured plant and
Section 4 Manufacturing
7 (Zero Rated) machinery of the following specifications, to (Industrial Inputs) 51
manufacturers in the Export Processing Zone, subject
Page | 21 - Tax Expenditure Estimates 2021Page 22
to the conditions, restrictions and procedure given
below, namely:-
Manufacturing
Section 4 9 Goods exempted under section 13, if exported by a (Industrial Inputs),
8 (Zero Rated) manufacturer Exporters, General 42
Masses
Manufacturing
Section 4 6(A) supply of Locally manufactured plant and
9 (Zero Rated) machinery (EPZ) (Industrial Inputs), 6
Exporters,
Manufacturing
Section 4 6(A) supply of Locally manufactured plant and
10 (Zero Rated) machinery (EPZ) (Industrial Inputs) 3
Exporters
Total 4,675
EXEMPTION ON IMPORTS UNDER 6TH SCHEDULE
Legal Intended Estimates
Sr ITEM
Reference Beneficiary In Million
12. machinery, equipment and other project related Manufacturing
6th items including capital goods, for setting up of hotels, (Industrial Inputs)
11 Schedule- power generation plants, water treatment plants and General Masses 58,507
Table-3 other infrastructure related projects located in an area
of 30 km around the zero point
24 Edible oils and vegetable ghee, including cooking Manufacturing
6th oil, on which Federal Excise Duty is charged, levied (Industrial Inputs)
12 Schedule- and collected by a registered manufacturer or General Masses 57,204
Table-1 importer as if it were a tax payable under section 3 of (Food Products)
the Act.
8.1 exemption of Sales Tax @ 0% on Machinery and Manufacturing
6th equipment meant for power transmission and grid (Industrial Inputs)
13 Schedule- stations including under construction projects. subject General Masses 27,900
Table-3 to condition given at S.No. 8 of Annexure of Table-
III of 6th Schedule to the Sales Tax Act, 1990.
105 Raw materials for the basic manufacture of Manufacturing
pharmaceutical active ingredients and for (Industrial Inputs), 6th
manufacture of pharmaceutical products, provided Health Sector 21,048 14 Schedule- that in case of import, only such raw materials shall General Masses Table-1
be entitled to exemption which are liable to customs
duty not exceed
Health Sector
104 Substances registered as drugs under the Drugs
Manufacturing 6th Act, 1976 (XXXI of 1976) and medicaments as are
(Pharmaceutical
15 Schedule- classifiable under Chapter 30 of the First Schedule to 19,675 Industrial Inputs) Table-1 the Customs Act, 1969 (IV of 1969) except the
following, even if medicated or medicinal in nature General Masses
6.1 exemption of Sales Tax @ 0% on Machinery, Manufacturing
6th equipment and spares meant for initial installation, (Industrial Inputs)
16 Schedule- balancing, modernization, replacement or expansion 18,279
Table-3 of projects for power generation through gas, coal,
hydel, and oil including under construction projects.
6th General Masses,
17 Schedule- Pulses. Food products 15,605
Table-1
24. Edible oils and vegetable ghee including cooking Manufacturing
6th oil on which federal excise duty is charged, levied (Industrial Inputs)
18 Schedule- and collected by a registered manufacturer or General Masses 12,478
Table-1 importer as if it were a tax payable under section 3 of food products
the act.
Page | 22 - Tax Expenditure Estimates 2021Page 23
133 Pesticides and their active ingredients registered Agriculture Sector
6th by the department of plant protection under the General Masses
19 Schedule- Agricultural Pesticides Ordinance, 1971 (II of 1971), 11,990
Table-1 stabilizers, emulsifiers and solvents namely:- Details
given at the S.No. 133 of Table 1 of 6th Schedule
Manufacturing 6th
(Industrial Inputs)
20 Schedule- 14A.7.(a) PV Modules. 8,281 General Masses Table-3
Exemption of Sales Tax @ 0% on Coal mining Mining sector
6th machinery, equipment, spares including vehicles for (Industrial Inputs)
21 Schedule- site use i.e single or double cabin pick-ups and dump 3,927
Table-3 trucks imported for Thar Coal Field - subject to
condition given at S.No. 4 of Annexure of Table-III
Edible fruits excluding imported fruits (except fruits General Masses
6th
imported from Afghanistan) whether fresh, frozen or
22 Schedule- otherwise preserved but excluding those bottled or Food Items 3,313
Table-1
canned.
6th Poultry General
Live animals and live poultry respective headings of
23 Schedule- chapter 1. Masses 3,208
Table-1
Edible vegetables including roots and tubers, except Manufacturing
6th
ware potato and onions, whether fresh, frozen or (Industrial Inputs)
24 Schedule- otherwise preserved (e.g. in cold storage) but General Masses 3,160 Table-1
excluding those bottled or canned.
6th General Masses
25 Schedule- 132 Personal computers 2,920
Table-1
Manufacturing 6th
(Industrial Inputs)
26 Schedule- 61 Respective Headings 2,814 General Masses Table 1
Manufacturing 6th
84 Preparations suitable for infants, put up for retail (Industrial Inputs)
27 Schedule- sale General Masses 2,738 Table-1
153 Steel billets, ingots, ship plates, bars and other Steel Sector
6th
long re-rolled profiles, on such imports and supplies (Industrial Inputs)
28 Schedule- by the manufacturer on which federal excise duty is General Masses 2,424 Table-1
payable in sales tax mode
Manufacturing
6th 73A Milk and Cream , concentrated or containing (Industrial Inputs)
29 Schedule- added sugar or other sweetening matter, excluding General Masses / 2,402
Table-1 that sold in retail packing under a brand name Food Items
Agriculture Sector 6th
(Industrial Inputs) Schedule- 20 Seeds, fruit and spores of a kind used for sowing. 2,33530 General Masses Table-1
120 Diagnostic kits or equipment, namely:- HIV Kits Health Sector
6th , 4C Es Trionyx , 5C Cell control normal , Bovine (Industrial Inputs)
31 Schedule- precision multi sera , Pregnancy test , DNA SSP General Masses 2,320
Table-1 DRB Generic IC , Reticulocyte count (control) Retic
C Control , Kit for vitamin B12 estimation , Ferritin
5.1 exemption of Sales Tax @ 0% on Machinery, Manufacturing
equipment and spares meant for initial installation, (Industrial Inputs) 6th
balancing, modernization, replacement or expansion General Masses
32 Schedule- of projects for power generation through oil, gas, 2,010
Table-3
coal, wind and wave energy including under
construction p
Page | 23 - Tax Expenditure Estimates 2021Page 24
6th General Masses
131 Laptop computers, notebooks whether or not
33 Schedule- incorporating multimedia kit 1,965
Table-1
Manufacturing 6th
(Industrial Inputs)
34 Schedule- 141 Preparation for making animal feed 1,904 General Masses Table-1
General Masses 6th
32 Newsprint, newspapers, journals, periodicals,
35 Schedule- books but excluding directories. Educational Items 1,785
Table-1
Manufacturing
19 Cereals and products of milling industry excluding
6th (Industrial Inputs) the products of milling industry, other than wheat and
36 Schedule- meslin flour, as sold in retail packing bearing brands General Masses, 1,556
Table-1 food products name or a trade mark.
7.1 exemption of Sales Tax @ 0% on Machinery, Manufacturing
equipment and spares meant for initial installation, (Industrial Inputs) 6th
balancing, modernization, replacement or expansion General Masses
37 Schedule- of projects for power generation through nuclear and 1,266
Table-3
renewable energy sources like solar, wind, micro-
hydel
151 Imports of plant, machinery, equipment for FATA/PATA
6th installation in tribal areas and of industrial inputs by
38 Schedule- the industries located in the tribal areas, as defined in 1,264
Table-1 the Constitution of Islamic Republic of Pakistan
subject to furnishing of security
117. 3006.9100, 118. 3926.9050, 119. 8539.3930, Manufacturing
120. 3822.0000, 121. respective heading, 122. (Industrial Inputs) 6th
respective headings, 123. 8802.4000, 124. respective General Masses
39 Schedule- headings, 125. respective headings, 126. respective 1,142
Table-3
headings, 127. respective headings, 128. respective
head
13. edible vegetables including roots and tubers, General Masses
6th
whether fresh, frozen or otherwise preserved (e.g. in (Food Products)
40 Schedule- cold storage) but excluding potato onion those bottled 955
Table-1
or canned under respective PCT headings
6th Manufacturing
124 Maintenance kit for use in trainer aircrafts of
41 Schedule- PCT headings 8802.2000 and 8802.3000 (Industrial Inputs) 937
Table-1
102. Machinery. equipment and materials imported Manufacturing
6th either for exclusive use within the limits of EPZ or (Industrial Inputs)
42 Schedule- for making exports there from, and goods imported Exporters 741
Table-1 for warehousing purpose in EPZ, subject to the
conditions that such machinery, equipment, materials
6th General Masses
17 Ginger excluding those sold in retail packing
43 Schedule- bearing brand names and trademarks. (Food Products) 738
Table-1
6th General Masses
85 Fat filled milk, excluding that sold in retail
44 Schedule- packing under a brand name or a trademark (Food Products) 738
Table-1
45 Dextrose and saline infusion giving sets along Health Sector
6th with empty non-toxic bags for infusion solution, (Industrial Inputs)
45 Schedule- Dextrose and saline infusion giving sets, Artificial General Masses 719
Table-1 parts of the body, Intra-Ocular lenses and Glucose
testing equipment.
6th General Masses
76 Whey, excluding that sold in retail packing under
46 Schedule- a brand name (Food Products) 685
Table-1
6th 6.2 exemption of Sales Tax @ 0% on Construction Manufacturing
47 Schedule- machinery, equipment and specialized vehicles, (Industrial Inputs) 569
Table-3 excluding passenger vehicles, imported on temporary
Page | 24 - Tax Expenditure Estimates 2021Page 25
basis as required for the construction of project.- Construction
subject to condition given at S.No. 6 of Annexure of Industry / General
Table-I Masses
6th General Masses
12. live plants including bulbs roots and the like
48 Schedule- under respective PCT headings 562
Table-1
100 Construction materials to Gawadar Export Export Processing
6th
Processing Zone’s investors and to Export Processing Zone
49 Schedule- Zone Gawadar for development of Zone’s 547
Table-1
infrastructure
6th General Masses
50 Schedule- 14. pulses under respective PCT headings 536
Table-1
Manufacturing 6th 15A-I Parts and Components for manufacturing LED
(Industrial Inputs)
51 Schedule- lights:- (i). Aluminum Housing/ Shell for LED (LED 531 General Masses Table-3 Light Fixture)
02. following machinery, equip., apparatus, & Health Sector
medical, surgical, dental & vet. furniture, materials, (Industrial Inputs) 6th
fixtures and fittings imported by hospitals and General Masses
52 Schedule- medical or diagnostic institutes:- medical equipment 522
Table-3
sr. (1) to (13) b. cardiology/cardiac surgery
equipment
15(ix). PV module, with or without, the related Manufacturing
components including invertors (off-grid/on grid/ (Industrial Inputs) 6th
hybrid) with provision for direct connection/input General Masses
53 Schedule- from renewable energy source and with Maximum 493
Table-3
Power Point Tracking (MPPT), charge controllers
and solar batteries
6th Poultry Sector
54 Schedule- 1 Live Animals and live poultry General Masses 477
Table-1
19 Plant and machinery, except the items listed under Special Economic
6th Chapter 87 of the Pakistan Customs Tariff, imported Zones General
55 Schedule- for setting up of a Special Economic Zone (SEZ) by Masses 383
Table-3 zone developers and for installation in that zone by
zone enterprises, on one time basis as prescribe
Manufacturing
156 exemption of Sales Tax @ 0% on 6. PV module, (Industrial Inputs)
6th with or without, the related components including General Masses
56 Schedule- invertors, charge controllers and batteries-Items for 383
Table-3 promotion of renewable energy technologies subject
to certification by Alternative Energy Development
Manufacturing 14.1.v. Inverters (off-grid/ on-grid/ hybrid with
6th provision for direct connection/ input renewable (Industrial Inputs)
57 Schedule- energy source and with Maximum Power Point General Masses 372
Table-3
Tracking (MPPT).
103. import and supply thereof, up to the year 2020, Manufacturing
6th of ships of gross tonnage of less than 15 LDT and all (Industrial Inputs)
58 Schedule- floating crafts including tugs, dredgers, survey 353
Table-1 vessels and other specialized crafts purchased or
bare-boat chartered by a Pakistan entity
Manufacturing 6th
15A(iii). Constant Current Power Supply for of LED (Industrial Inputs)
59 Schedule- Lights(1-300W) General Masses 342 Table-3
6th 46 Exemption of Sales Tax under Serial No 46 to 59 Manufacturing
60 Schedule- of 6th Schedule of Sales Tax, Act where exemption (Industrial Inputs) 321
Table-1 of Customs Duty is claimed under chapter 99.
Page | 25 - Tax Expenditure Estimates 2021Page 26
Manufacturing 6th
15A(ii). Metal Clad Printed Circuit Boards (MCPCB) (Industrial Inputs)
61 Schedule- for LED General Masses 321 Table-3
Manufacturing 6th
(Industrial Inputs)
62 Schedule- 98 Pencils including colour pencils 291 General Masses Table-1
112 cardiology/cardiac surgery, neurovascular, Health Sector
6th electrophysiology, endo-surgery, endoscopy, (Industrial Inputs)
63 Schedule- oncology, urology, gynecology, disposables and General Masses 260
Table-1 other equipment as stated in serial 112 of Table I of
6th schedule.
Manufacturing 6th
14. Following items for use with solar energy, Solar (Industrial Inputs)
64 Schedule- Power Systems General Masses 260 Table-3
15(xv). Invertors (off-grid/on grid/hybrid) with Manufacturing
6th
provision for direct connection/input from renewable (Industrial Inputs)
65 Schedule- energy source and with Maximum Power Point General Masses 259 Table-3
Tracking (MPPT).
8.2 exemption of Sales Tax @ 5% on Construction Manufacturing
machinery, equipment and specialized vehicles, (Industrial Inputs) 6th
excluding passenger vehicles, imported on temporary General Masses
66 Schedule- basis as required for the construction of project.- 229
Table-3
subject to condition given at S. No. 8 of Annexure of
Table-3
Health Sector 6th
(Industrial Inputs)
67 Schedule- 60 Contraceptives and accessories thereof. 225 General Masses Table-1
150 Plant and machinery excluding consumer durable Manufacturing
goods and office equipment as imported by (Industrial Inputs) 6th
greenfield industries, intending to manufacture
68 Schedule- taxable goods, during their construction and 206
Table-1
installation period subject to conditions noted below
and issuance of exe
6th 15B-CKD kits for single cylinder agriculture diesel Agriculture Sector
69 Schedule- engines (compression-ignition internal combustion (Industrial Inputs) 206
Table-3 piston engines) of 3 to 36 HP.
130 Sodium Iron (Na Fe EDTA), and other premixes Manufacturing
6th
of vitamins, minerals and micro-nutrients (food (Industrial Inputs)
70 Schedule- grade) and subject to conditions imposed for General Masses 203 Table-1
importation under the Customs Act, 1969
Steel Sector,
153 steel billets, ingots, ship plates, bar and other
6th Manufacturing long re-rolled profiles, on such imports and supplies
71 Schedule- by the manufacturer on which federal excise duty is (Industrial Inputs) 202
Table-1 payable in sales tax mode. General Masses
6th Manufacturing
125 Spare parts for use in aircrafts, trainer aircrafts or
72 Schedule- simulators (Industrial Inputs) 198
Table-1
Health Sector 6th
121 Blood bag CPDA-1 with blood transfusion set (Industrial Inputs)
73 Schedule- pack in ammonium foil with set General Masses 194 Table-1
113 High Efficiency Irrigation Equipment. (If used Agriculture Sector
6th for agriculture sector) 1) Submersible pumps (up to General Masses
74 Schedule- 75 lbs. and head 150 meters) 2) Sprinklers including 193
Table-1 high and low pressure (center pivotal) system,
conventional sprinkler equipment, water reel travel
Page | 26 - Tax Expenditure Estimates 2021Page 27
6th Agriculture Sector
135 Sunflower and canola hybrid seeds meant for
75 Schedule- sowing General Masses 185
Table-1
Manufacturing
6th 26 Fruit juices, whether fresh, frozen or otherwise (Industrial Inputs)
76 Schedule- preserved but excluding those bottled, canned or General Masses 182
Table-1 packaged. (Food Products)
Manufacturing 6th
(Industrial Inputs)
77 Schedule- 88 Erasers 176 General Masses Table-1
Manufacturing 6th
14A.4.b.i Parts for Solar Desalination System, (i). (Industrial Inputs)
78 Schedule- Solar photo voltaic panels. General Masses 175 Table-3
Manufacturing 6th
(Industrial Inputs)
79 Schedule- 93 Bicycles 171 General Masses Table-1
146 Equipment imported by M/s China Railway Mass Transit
6th Corporation to be furnished and installed in Lahore System / General
80 Schedule- Orange Line Metro Train Project subject to the Masses 171
Table-1 conditions as contained in Sr No 146 of Table-1 of
the 6th-Schedule (Sales Tax) Act 1990.
61.goods produced or manufactured in and exported Exporter/Importers,
from Pakistan which are subsequently imported in Manufacturing 6th
Pakistan within one year of their exportation (Industrial Inputs) 16281 Schedule- provided conditions of section 22 of the customs act General Masses Table-1
1969 (iv of 1969) are complied with under respective
PCT
102 Machinery, equipment and materials imported Exporters,
either for exclusive use within the limits of Export Manufacturing 6th
Processing Zone or for making exports therefrom, (Industrial Inputs) 15882 Schedule- and goods imported for warehousing purpose in General Masses Table-1
Export Processing Zone, subject to the conditions
that such mac
Manufacturing 6th
(Industrial Inputs)
83 Schedule- 14A.7.b.i Parts for PV Modules, (i). Solar cells. 151 General Masses Table-3
Manufacturing
(Industrial Inputs) 6th 14A.15. Any other item approved by the Alternative
General Masses /
84 Schedule- Energy Development Board (AEDB) and concurred 151 Alternative Energy Table-3 to by the FBR.
Development
Manufacturers in
116. plant, machinery and equipment imported for (Industrial Inputs)
6th setting up industries in fata subject to the same General Masses
85 Schedule- conditions and procedure as are applicable for import 150
Table-1 of such plant, machinery and equipment under the
customs act, 1969 (iv of 1969). under respective head
General Masses /
6th
“differently-abled
86 Schedule- 94 Wheelchairs 149
Table-1 persons
6th Manufacturing
87 Schedule- 15A(iv). Lenses for LED lights (Industrial Inputs) 145
Table-3
Page | 27 - Tax Expenditure Estimates 2021Page 28
General Masses
134 Goods received as gift or donation from a foreign General masses
government or organization by the Federal or and Governments 6th
Provincial Governments or any public sector
88 Schedule- organization subject to recommendations of the 145
Table-1
Cabinet Division and concurrence by the Federal
Board of Revenue
13 exemption of Sales Tax @ 0% on Effluent Manufacturing
6th
treatment plants- subject to conditions. Subject to (Industrial Inputs)
89 Schedule- conditions given in the preamble of Table-3 of 6th General Masses 135 Table-3
Schedule to the Sales Tax Act, 1990.
Energy Sector
6th 14(1) i Off-grid/On-grid solar power system (with or Manufacturing
90 Schedule- without provision for USB/charging port) comprising (Industrial Inputs) 129
Table-3 of : i. PV Module. General Masses
101 Raw and pickled hides and skins, wet blue hides Leather Sector
and skins, finished leather, and accessories, Exporters 6th
components and trimmings, if imported by a Manufacturing
91 Schedule- registered leather goods manufacturer, for the (Industrial Inputs) 128 Table-1
manufacture of goods wholly for export, provided General Masses
that conditions
148 Imported construction materials and goods Road and
imported by M/s China State Construction Highways / 6th
Engineering Corporation Limited (M/s CSCECL), General Masses
92 Schedule- whether or not locally manufactured, for construction 110
Table-1
of Karachi-Peshawar Motorway (Sukkur-Multan
Section) subject to fulfilment
Manufacturing
(Industrial Inputs)
6th 143(i) Hearing aids (all types and kinds) (ii) Hearing General Masses
93 Schedule- assessment equipment; (a) Audiometers (b) 99
Table-1 Tympanometer (c) ABR (d) Oto Acoustic Omission Differently-abled
persons
52. goods imported by or donated to hospitals run by Health Sector
the federal government or a provincial government General Masses 6th
and non-profit making educational and research
94 Schedule- institutions subject to the similar restrictions, 91
Table-1
limitations, conditions and procedures as are
envisaged
3.1 exemption of Sales Tax @ 5% on Machinery, General Masses
equipment, materials, capital goods, specialized
6th
vehicles (4x4 non luxury) i.e single or double cabin
95 Schedule- pickups, accessories, spares, chemicals and 89
Table-3
consumables meant for mine construction phase or
extraction phase
6th (Food Products)
3. fish and crustaceans excluding live fish whether or
96 Schedule- not fresh, frozen or otherwise preserved General Masses 89
Table-1
5.2 exemption of Sales Tax @ 0% on Construction Construction
machinery, equipment and specialized vehicles, Industry General 6th
excluding passenger vehicles, imported on temporary Masses
97 Schedule- basis as required for the construction of project.- 87
Table-3
subject to condition given at S.No. 5 of Annexure of
Table-I
46. goods imported by various agencies of the united Manufacturing
6th nations, diplomats, diplomatic missions, privileged (Industrial Inputs)
98 Schedule- persons and privileged organizations which are Diplomatic 87
Table-1 covered under various act and orders, rules and Missions/ General
regulations made thereunder and agreements by the
Page | 28 - Tax Expenditure Estimates 2021Page 29
federal government Masses
Manufacturing 6th 14.1. iii. Batteries for specific utilization with the
(Industrial Inputs) Schedule- system (not exceeding 50 Ah in case of portable 8399 General Masses Table-3 system).
Energy Sector
14A.4.b.v Inverters (off grid/on grid/ hybrid) with
6th Manufacturing provision for direct connection/input from renewable
100 Schedule- energy source and with Maximum Power Point (Industrial Inputs) 72
Table-3 General Masses Tracking (MPPT)
Energy Sector
110 The following items with dedicated use of Manufacturing
6th renewable source of energy like solar and wind, (Industrial Inputs)
101 Schedule- subject to certification by the Alternative Energy General Masses / 71
Table-1 Development Board (AEDB), Islamabad:- as listed at Alternative Energy
sub-serial number (a) to (j). Development
Manufacturing
6th (Industrial Inputs)
102 Schedule- 97 Pens, ball pens, markers and porous tipped pen General Masses / 69
Table-1 Educational Items
Manufacturing 6th
20. seeds , fruit and spores of a kind used for sowing (Industrial Inputs)
103 Schedule- under respective PCT headings General Masses 66 Table-1
83 Meat and similar products of prepared frozen or (Food Products)
6th
preserved meat or meat offal of all types including General Masses
104 Schedule- poultry meat and fish excluding those sold in retail 61
Table-1
packing under a brand name or a trademark
Manufacturing 6th
(Industrial Inputs)
105 Schedule- Combined harvesters up to five years old 53 General Masses Table-1
Exemption of Sales Tax on Machinery and Manufacturing
equipment for initial installation, balancing, (Industrial Inputs) 6th
modernization, replacement or expansion of General Masses
106 Schedule- desalination plants, cola-firing system, gas processing 53
Table-3
plants and oil and gas field prospecting. Subject to
conditions given
Goods Imported by or donated to hospitals run by the Health Sector
Federal or Provincial Government; and non-profit General Masses 6th
making educational and research institutions,
107 Schedule- limitations, conditions and procedures as are 50
Table-1
envisaged for the purpose of applying zero-rate of
customs d
import of all goods received, in the event of a natural General Masses
6th disaster or other catastrophe, as gifts and relief
108 Schedule- consignments, including goods imported for the 50
Table-1 president's fund for afghan refugees, relief goods
donated for afghan refugees, gifts for president’s f
Machinery, equipment, raw materials, components Manufacturing
6th and other capital goods for use in building, fittings, (Industrial Inputs)
109 Schedule- repairing or refitting of ships, boats or floating 48
Table-3 structures imported by Karachi Shipyard and
Engineering Works Limited.
Manufacturing 6th
(Industrial Inputs)
110 Schedule- 149 Micro feeder equipment 47 General Masses Table-1
Page | 29 - Tax Expenditure Estimates 2021Page 30
Media
142 Promotional and advertising material including
6th Manufacturing technical literature, pamphlets, brochures and other
111 Schedule- giveaways of no commercial value, distributed free (Industrial Inputs) 47
Table-1 of cost by the exhibitors General Masses
115. plant, machinery and equipment imported for Manufacturing
6th setting up fruit processing and preservation units in (Industrial Inputs)
112 Schedule- Gilgit-Baltistan, Balochistan province and Malakand General Masses 44
Table-1 division subject to the same conditions and procedure
as are applicable for import of such plant, ma
3.2 exemption of Sales Tax @ 0% on Construction General Masses
machinery, equipment and specialized vehicles,
6th
excluding passenger vehicles, imported on temporary
113 Schedule- basis as required for mine construction or extraction 42
Table-3
phase - subject to condition given at S.No. 3 of
Annexure
6th (Industrial Inputs)
114 Schedule- 15(v). Solar torches. General Masses 41
Table-3
6th General Masses
115 Schedule- 140 Bovine Semen 40
Table-1
14. following items with dedicated use of renewable Energy Sector
6th source of energy like solar, wind, geothermal etc:- Manufacturing
116 Schedule- (1)solar home systems.(2)solar parabolic trough (Industrial Inputs) 38
Table-3 power plants.(3)solar dish sterling engine.(4)solar air General Masses
conditioning system.(5)solar desalination system
Manufacturing 6th
(Industrial Inputs)
117 Schedule- 15(xiv). Sun Tracking Control System 38 General Masses Table-3
12 exemption of Sales Tax @ 0% on Machinery, Energy Sector
equipment and other project related items including Manufacturing 6th
capital goods, for setting up of hotels, power (Industrial Inputs) 38118 Schedule- generation plants, water treatment plants and other General Masses Table-3
infrastructure related projects located in an area of 30
km a
Energy Sector
6th Manufacturing
119 Schedule- 15(xii). Energy saver lamps of varying voltages (Industrial Inputs) 36
Table-3 General Masses
Poultry Sector
6th Manufacturing
120 Schedule- 11 Eggs including eggs for hatching (Industrial Inputs) 36
Table-1 General Masses
15. edible fruits excluding imported fruits ( except (Food Products)
6th fruits imported from Afghanistan) whether fresh, General Masses
121 Schedule- frozen or otherwise preserved but excluding those 35
Table-1 bottled or canned under respective PCT headings
(0810.3000 omitted)
Manufacturing 6th 2 Meat of bovine animals, sheep and goat, excluding
(Industrial Inputs)
122 Schedule- poultry and offal, whether or not fresh, frozen or 34 General Masses Table-1 otherwise, preserved or packed
Manufacturing 6th
(Industrial Inputs)
123 Schedule- 12 Live plants including bulbs, roots and the like. 34 General Masses Table-1
Page | 30 - Tax Expenditure Estimates 2021Page 31
Manufacturing 6th
(Industrial Inputs)
124 Schedule- 14A.5. Solar Thermal Power Plants with accessories. 33 General Masses Table-3
100A Materials and equipment (plant, machinery, Manufacturing
equipment, appliances and accessories) for (Industrial Inputs) 6th
construction and operation of Gwadar Port and General Masses /
125 Schedule- development of Free Zone for Gwadar Port as Economic zones 32 Table-1
imported by or supplied to China Overseas Ports
Holding Company Limited (COPHCL
108 Components or sub-components of energy saver Manufacturing
lamps, namely:- (a) Electronic Circuit (b) Plastic (Industrial Inputs) 6th
Caps (Upper and Lower) (c) Base Caps B22 and E27 General Masses
126 Schedule- (d) Tungsten Filaments (e) Lead-in-wire (f) 31
Table-1
Fluorescent Powder (Tri Band Phospher) (g)
Adhesive Additive
Manufacturing 6th
(Industrial Inputs)
127 Schedule- 87 Writing, drawing and marking inks 30 General Masses Table-1
Health Sector
6th Manufacturing
128 Schedule- 122 Urine drainage bags (Industrial Inputs) 29
Table-1 General Masses
Manufacturing 6th
15 (xi). Water pumps operating on solar energy along (Industrial Inputs)
129 Schedule- with solar pump controllers General Masses 29 Table-3
6th 80 Processed cheese not greeted or powdered, (Food Products)
130 Schedule- excluding that sold in retail packing under a brand General Masses 28
Table-1 name
130 Import and supply thereof, up to the year 2020, Manufacturing
6th of ships and all floating crafts including tugs, (Industrial Inputs)
131 Schedule- dredgers, survey vessels and other specialized crafts General Masses 27
Table-1 purchased or bare-boat chartered by a Pakistan entity
and flying
6th General Masses
33. currency notes, bank notes, shares, stocks and
132 Schedule- bonds under PCT 49.07 27
Table-1
Manufacturing 6th
(Industrial Inputs)
133 Schedule- 14A.4.b(ii). Solar water pumps. 25 General Masses Table-3
Manufacturing 6th
(Industrial Inputs)
134 Schedule- 15(xiii). Energy Saving Tube Lights. 25 General Masses Table-3
General Masses 6th
135 Schedule- 106 Import of Halal edible offal of bovine animals. Food Items 24
Table-1
114 Green House Farming and Other Green House agriculture sector
6th Equipment consisting of plastic covering and mulch Manufacturing
136 Schedule- film, anti-insect net and shade net (If used for (Industrial Inputs) 24
Table-1 agriculture sector) 1) Tunnel farming equipment. 2) General Masses
Greenhouses (prefabricated).
Manufacturing 6th
(Industrial Inputs)
137 Schedule- 14A.7.b.iiTempered Glass. 24 General Masses Table-3
Page | 31 - Tax Expenditure Estimates 2021Page 32
Poultry Sector
6th Manufacturing 11. eggs including eggs for hatching under respective
138 Schedule- headings (Industrial Inputs) 24
Table-1 General Masses
129 Import of plant, machinery and production line Manufacturing
6th equipment used for the manufacturing of mobile (Industrial Inputs)
139 Schedule- phones by the local manufacturers of mobile phones General Masses 23
Table-1 duly certified by Pakistan Telecommunication
Authority
127 Operational tools, machinery, equipment and Manufacturing
6th
furniture and fixtures on one-time basis for setting up (Industrial Inputs)
140 Schedule- Greenfield airports by a company authorized by General Masses 20 Table-1
Aviation Division
109 Goods imported temporarily with a view to Manufacturing
6th
subsequent exportation, as concurred by the Board, (Industrial Inputs)
141 Schedule- including passenger service item, provision and General Masses 18 Table-1
stores of Pakistani Airlines.
Manufacturing 6th
(Industrial Inputs)
142 Schedule- 86 Colors in sets (Poster colors) 18 General Masses Table-1
Manufacturing 6th
(Industrial Inputs)
143 Schedule- 14A.12.b.i Turbine with Generator/ Alternator. 18 General Masses Table-3
100D Machinery, equipment, materials and goods Exporters
imported either for exclusive use within the limits of Manufacturing 6th
Gwadar Free Zone, or for making exports therefrom, (Industrial Inputs)
144 Schedule- subject to the conditions that such machinery, 18
Table-1
equipment, materials and goods, are imported by
investors of
6th Food Products
145 Schedule- 76. WHEY .... 04.04 .... General Masses 16
Table-1
11.7 exemption of Sales Tax @ 0% on 7) Machine Manufacturing
and tool for stone work; sand blasting machines; (Industrial Inputs) 6th
tungsten carbide tools; diamond tools & segments General Masses
146 Schedule- (all type & dimensions), hydraulic jacking machines, 16
Table-3
hydraulic manual press machines, air/hydro pillows,
compress
Manufacturing 6th
96 Other drawing, marking out or mathematical (Industrial Inputs)
147 Schedule- calculating instruments (geometry box) General Masses 15 Table-1
6th Food Products
79 Cheese, excluding that sold in retail packing under
148 Schedule- a brand name General Masses 15
Table-1
Manufacturing 6th
14A.7.b.ix Ribbon for PV Modules (made of silver & (Industrial Inputs)
149 Schedule- Lead). General Masses 14 Table-3
137 Paper weighing 60 g/m2 for printing of Holy Manufacturing
6th
Quran imported by Federal or Provincial (Industrial Inputs)
150 Schedule- Governments and Nashiran-e-Quran as per quota General Masses 14 Table-1
determined by IOCO
6th General Masses
151 Schedule- 92 Sewing machines of the household type 13
Table-1
6th 123 Aircraft, whether imported or acquired on wet or Manufacturing
152 Schedule- dry lease (Industrial Inputs) 13
Page | 32 - Tax Expenditure Estimates 2021Page 33
Table-1 General Masses
Manufacturing 6th
(Industrial Inputs) Schedule- 14A.7.b.iii Aluminum frames. 12153 General Masses Table-3
6th 32. News Print, News Papers, Journals, Periodicals Media General
154 Schedule- Books But Excluding Directories Under Respective Masses 12
Table-1 PCT Headings
07. (1) machinery, equip. & spares meant for initial Manufacturing
6th installation, balancing, modernization, replacement or (Industrial Inputs)
155 Schedule- expansion of projects for power gen. through nuclear General Masses 12
Table-3 & renewable energy sources like solar, wind, micro-
hydel bio-energy, ocean, waste-to-energy
6th Food Products
3 Fish and crustaceans excluding live fish whether or
156 Schedule- not fresh, frozen or otherwise preserved or packed General Masses 11
Table-1
51.impoted samples, subject to the same condition as Manufacturing
6th
are envisages for the purposes of applying zero-rate (Industrial Inputs)
157 Schedule- of customs duty under customs act 1969 (iv of 1969) General Masses 11 Table-1
under respective PCT headings
Manufacturing 6th
(Industrial Inputs)
158 Schedule- 14.1.ii. Charge controller. 11 General Masses Table-3
6th 31 Holy Quran, complete or in parts, with or without General Masses
159 Schedule- translation; Quranic Verses recorded on any analogue 10
Table-1 or digital media; other Holy books.
Manufacturing 6th
(Industrial Inputs)
160 Schedule- 92. Sewing machines of the household 10 General Masses Table-1
Food Products
6th Manufacturing 16 Red chilies excluding those sold in retail packing
161 Schedule- bearing brand names and trademarks. (Industrial Inputs) 10
Table-1 General Masses
112. Following cardiology/cardiac surgery, Health Sector
neurovascular, electrophysiology, Endosurgery, General Masses 6th
endoscopy, oncology, urology, gynecology,
162 Schedule- disposables & other equip:- a. angioplasty products. 9
Table-1
sr.1-6, b. angiography products. sr. 1-6, contrast
media for angiography
Food Products
6th Manufacturing 18 Turmeric excluding those sold in retail packing
163 Schedule- bearing brand names and trademarks. (Industrial Inputs) 8
Table-1 General Masses
01. Machinery and equipment for initial installation, Manufacturing
6th balancing, modernization, replacement or expansion (Industrial Inputs)
164 Schedule- of desalination plants, coal firing system, gas General Masses 8
Table-3 processing plants and oil and gas field prospecting
under respective headings.
Manufacturing 6th
14A.2.b.i Parts for Solar Dish Sterling Engine. (i). (Industrial Inputs)
165 Schedule- Solar concentrating dish. General Masses 7 Table-3
6th 2 meat of bovine animals sheep and goad, excluding General Masses
166 Schedule- poultry and offal, whether or not fresh, frozen of 7
Table-1 otherwise preserved PCT 02.01 02.02 and 02.04
Page | 33 - Tax Expenditure Estimates 2021Page 34
82. Frozen, prepared or preserved sausages and Food Products
similar products of poultry meat or meat offal Manufacturing 6th
(1601.0000). 83. Meat and similar products of (Industrial Inputs) 7167 Schedule- prepared frozen or preserved meat or meat offal of all General Masses Table-1
types including poultry meat and fish.
(1602.3200,1602.3900,
Manufacturing 6th
14A.7.b.xi EVA (Ethyl Vinyl Acetate) Sheet (Industrial Inputs)
168 Schedule- (Chemical). General Masses 7 Table-3
Manufacturing 6th
(Industrial Inputs)
169 Schedule- 138 Fish Feed 6 General Masses Table-1
Food Products
6th 18. turmeric excluding those sold in retail packing Manufacturing
170 Schedule- bearing brand names and trademarks under (Industrial Inputs) 5
Table-1 respecting PCT heading General Masses
Food Products
82 Frozen, prepared or preserved sausages and
6th Manufacturing similar products of poultry meat or meat offal
171 Schedule- excluding those sold in retail packing under a brand (Industrial Inputs) 5
Table-1 General Masses name or a trademark
14.8 exemption of Sales Tax @ 0% on 8. PV Manufacturing
Modules.-PV Modules for dedicated use of (Industrial Inputs) 6th
renewable source of energy like solar, wind, General Masses
172 Schedule- geothermal etc. subject to conditions given in the 5
Table-3
preamble of Table-3 of 6th Schedule to the Sales Tax
Act, 1990.
Manufacturing 6th
(Industrial Inputs)
173 Schedule- 14A. Junction box & Cover. 5 General Masses Table-3
Manufacturing 6th
(Industrial Inputs)
174 Schedule- 89 Exercise books 5 General Masses Table-1
9.23 exemption of Sales Tax @ 0% on 23) Spares, Manufacturing
accessories and reagents for scientific equipment.- (Industrial Inputs) 6th
Machinery, equipment and other education and General Masses
175 Schedule- research related items imported by technical, training 5
Table-3
institutes, research institutes, schools, colleges and
universities
11. Following machinery and equipment for marble, Manufacturing
6th
granite and gem stone extraction and processing (Industrial Inputs)
176 Schedule- industries: sr. # (1) to (24) under respective headings General Masses 4 Table-3
and conditions.
Manufacturing 6th
(Industrial Inputs)
177 Schedule- Pencil sharpeners 4 General Masses Table-1
Manufacturing 6th
(Industrial Inputs)
178 Schedule- 14A.7.b.viii Sheet mixture of Paper and plastic 4 General Masses Table-3
45. dextrose and saline infusion giving sets along Health Sector
6th with empty nontoxic bags for infusion solution, Manufacturing
179 Schedule- dextrose and saline infusion giving sets, artificial (Industrial Inputs) 4
Table-1 parts of the body, intra-ocular lenses and glucose General Masses
testing equipment under respective PCT headings
Page | 34 - Tax Expenditure Estimates 2021Page 35
Food Products
6th Manufacturing
180 Schedule- 73 Milk (Industrial Inputs) 4
Table-1 General Masses
15.i Following items for promotion of renewable Manufacturing
6th
energy technologies or for conservation of energy:- (Industrial Inputs)
181 Schedule- (i). SMD/LED/LVD lights with or without ballast, General Masses 4 Table-3
fittings and fixtures.
09. Following machinery, equip. and other education Education Sector
6th
and research related items imported by technical, General Masses
182 Schedule- training institutes, schools, colleges and universities:- 4
Table-3
sr.# (1) to (23) under respective headings.
59. artificial kidneys, eye cornea, hemodialysis General Masses
machines, hemodialyzers, a.v. fistula needles,
6th hemodialysis fluids and powder, blood tubing tines Health items
183 Schedule- for dialysis and reverse osmosis plants for dialysis, 3
Table-1
double lumen catheter for dialysis, catheter for renal
failure
15(xvi). Charge controller/ Current controller. Manufacturing
Provided that exemption under this serial shall be (Industrial Inputs) 6th
available with effect from 01.07.2016. (xvi). Charge General Masses
184 Schedule- controller/ Current controller. Provided that 3
Table-3
exemption under this serial shall be available with
effect
Manufacturing 6th
(Industrial Inputs)
185 Schedule- 14A.4.b.iv Charge controllers. 3 General Masses Table-3
6th General Masses
186 Schedule- 139 Fans for Dairy Farms 3
Table-1
Manufacturing 6th 126 Machinery, equipment and tools for setting up
(Industrial Inputs)
187 Schedule- maintenance, repair and overhaul (MRO) workshop 2 General Masses Table-1 by MRO company recognized by Aviation Division
50. articles imported through post as unsolicited gifts, Manufacturing
6th subject to the same conditions as are envisaged for (Industrial Inputs)
188 Schedule- the purposes of applying zero-rate of customs duty General Masses 2
Table-1 under the customs art 1969 (iv of 1969) under
respective PCT heading
2 exemption of Sales Tax @ 0% on Machinery, Manufacturing
equipment, apparatus, and medical, surgical, dental (Industrial Inputs) 6th
and veterinary furniture, materials, fixture and General Masses
189 Schedule- fittings imported by hospitals and medical or 2
Table-3
diagnostic institutes - subject to condition given at
S.No. 2
15.4 exemption of Sales Tax @ 0% on 4. Solar Manufacturing
6th torches.-Items for promotion of renewable energy (Industrial Inputs)
190 Schedule- technologies. Subject to conditions given in the General Masses 2
Table-3 preamble of Table-3 of 6th Schedule to the Sales
TAx Act, 1990.
Manufacturing 6th
(Industrial Inputs)
191 Schedule- 14A.3.b.ii Cooling towers. 2 General Masses Table-3
Manufacturing
6th 16. red chilies excluding those sold in retail packing (Industrial Inputs)
192 Schedule- bearing brand names and trademarks under respective General Masses 2
Table-1 PCT headings ( Food Product)
Page | 35 - Tax Expenditure Estimates 2021Page 36
6th General Masses (
193 Schedule- 73. MILK AND CREAM.... 04.01 AND 04.02 .... Food Product) 2
Table-1
Manufacturing 6th
(Industrial Inputs)
194 Schedule- 15.(vi). Lanterns and related instruments. 2 General Masses Table-3
Manufacturing 6th
14A.6.c.iv Electric Heater/ Immersion Rod (one (Industrial Inputs)
195 Schedule- piece with one solar water heater) General Masses 2 Table-3
6th ( Food Product)
72 Uncooked poultry Meat whether or not fresh,
196 Schedule- frozen or otherwise, preserved or packed General 2
Table-1
Manufacturing 6th
(Industrial Inputs)
197 Schedule- 15(viii). LED Bulb/Tube lights. 2 General Masses Table-3
53. imports of all such gifts as are received and such Manufacturing
6th equipment for fighting tuberculosis, leprosy, aids and (Industrial Inputs)
198 Schedule- cancer and such equipment and apparatus for the General Masses 2
Table-1 rehabilitation of the deaf, the blind crippled or
mentally retarded as are purchases or otherwise sec
71.goods and services purchased by non-resident Manufacturing
entrepreneurs and traders visiting Pakistan to (Industrial Inputs) 6th
participate in trade fairs and exhibitions subject to General Masses
199 Schedule- reciprocity and such conditions and restrictions as 1
Table-1
may be specified by the board under respective
heading
115 Plant, machinery and equipment imported for Manufacturers in
setting up fruit processing and preservation units in backward areas 6th
Gilgit-Baltistan, Makran and Malakand Divisions
200 Schedule- subject to the same conditions and procedure as are 1
Table-1
applicable for import of such plant, machinery and
equipment
Manufacturing 6th
(Industrial Inputs)
201 Schedule- 14A.8.viii Aluminum and silver paste. 1 General Masses Table-3
6th General Masses (
78 Desi Ghee, excluding that sold in retail packing
202 Schedule- under a brand name Food Product) 1
Table-1
Manufacturing
(Industrial Inputs) 6th
93. bicycles (87.12). 94. wheelchairs (8713.1000 General Masses /
203 Schedule- AND 8713.9000) Differently-abled 1 Table-1
Persons
Manufacturing
6th 29 Table salt including iodized salt excluding salt (Industrial Inputs)
204 Schedule- sold in retail packing bearing brand names and General Masses ( 1
Table-1 trademarks. Food Product)
Manufacturing
6th (Industrial Inputs) 84. preparations for infant use, put up for retail sale
205 Schedule- (1901.1000). 85. fat filled milk (1901.9090) General Masses ( 1
Table-1 Food Product)
Manufacturing 6th 52-a goods supplied to hospitals run by the federal or
(Industrial Inputs)
206 Schedule- provincial governments or charitable operating 1 General Masses Table-1 hospitals of fifty beds or more ....respective headings
Page | 36 - Tax Expenditure Estimates 2021Page 37
91 Energy saver lamps. As per Note 1 of the 6th Manufacturing
Schedule to the Sales Tax Act, 1990, exemption shall (Industrial Inputs) 6th
be admissible on the basis of description of goods as General Masses
207 Schedule- mentioned in column (2) of the Schedule. PCT 1
Table-1
classification of headings is provided for ease of
reference
Manufacturing
6th (Industrial Inputs) 75 Yogurt, excluding that sold in retail packing under
208 Schedule- a brand name General Masses 1
Table-1 (Food Prodiucts)
Manufacturing 6th
(Industrial Inputs)
209 Schedule- 14A.12.b.iv Pole/ Tower. 1 General Masses Table-3
110. the following items with dedicated use of Manufacturing
renewable sources of energy like solar and wind, (Industrial Inputs) 6th
subject to certification by the alternative energy General Masses
210 Schedule- development board (aedb), Islamabad:- (a) solar pv 1
Table-1
panels (9405.1090), (b) lvd induction lamps,
(c)SMD, LEDS
6th 147 Goods supplied to German Development Agency Diplomatic mission
211 Schedule- (Deutsche Gesellschaft für International 1
Table-1 Zusammenarbeit) GIZ
6th Manufacturing
74 Flavored Milk, excluding that sold in retail
212 Schedule- (Industrial Inputs) 1
packing under a brand name
Table-1 General Masses
Sub Total 316,015
Less 45% adjustment on account of value addition of Local Supplies 142,207
Total 173,808
EXEMPTION ON LOCAL SUPPLIES UNDER 6TH SCHEDULE
Legal Description Estimates
Sr Intended Beneficiaries
Reference Exemption or Concession Rs. Million
( Section 13 ) 6th
1 1 Live Animals 2 [and live poultry.] General Masses 15,119
Schedule Table I
1 Supply of cottonseed exclusively meant for
( Section 13 ) 6th Agriculture Sector
2 sowing purposes, subject to such conditions as 828
Schedule Table II General Masses
the Board may specify
1 Machinery and equipment for initial
installation, balancing, modernization,
( Section 13 ) 6th Manufacturing (Industrial
3 replacement or expansion of desalination 260
Schedule Table III Inputs) General Masses
plants, coal firing system, gas processing
plants and oil and gas field prospecting.
2 Meat of bovine animals, sheep and goat,
( Section 13 ) 6th excluding poultry and offal, whether or not Food Products
4 1,032
Schedule Table I fresh, frozen or otherwise, preserved 2 [or General Masses
packed]
2 Supply of locally produced crude vegetable
oil obtained from the locally produced seeds 1
( Section 13 ) 6th Manufacturing (Industrial
5 [other than cotton seed], except cooking oil, 1,905
Schedule Table II Inputs) General Masses
without having undergone any process except
the process of washing
2 Following machinery, equipment, apparatus, Food Products
( Section 13 ) 6th
6 and medical, surgical, dental and veterinary Manufacturing (Industrial 281
Schedule Table III
furniture, materials, fixtures and fittings Inputs) General Masses
Page | 37 - Tax Expenditure Estimates 2021Page 38
imported by hospitals and medical or
diagnostic institutes:-
3 Fish and crustaceans excluding live fish
( Section 13 ) 6th Food Products
7 whether or not fresh, frozen or otherwise 485
Schedule Table I General Masses
preserved 4 [or packed]
( Section 13 ) 6th Manufacturing (Industrial
8 Supplies made by cottage industry. 60
Schedule Table II Inputs) General Masses
4 Raw material and intermediary goods
manufactured or produced, and services
( Section 13 ) 6th Manufacturing (Industrial
9 provided or rendered, by a registered person, 159
Schedule Table II Inputs) General Masses
consumed in-house for the manufacture of
goods subject to sales tax.
4 Coal mining machinery, equipment, spares,
Mining Sector
( Section 13 ) 6th including vehicles for site use i.e. single or
10 Manufacturing (Industrial 5
Schedule Table III double cabin pick-ups 1 [and dump trucks],
Inputs) General Masses
imported for Thar Coal Field.
6 Supply of fixed assets against which input
tax adjustment is not available under a
( Section 13 ) 6th notification issued in Manufacturing (Industrial
11 236
Schedule Table II terms of clause (b) of subsection (1) of section Inputs) General Masses
8 of
the Sales Tax Act, 1990.
7 Breads prepared in tandoors and bakeries, Food products
( Section 13 ) 6th
12 vermicillies, nans, chapattis, sheer mal, bun, Manufacturing (Industrial 4,277
Schedule Table II
rusk. Inputs) General Masses
8 Foodstuff cooked or prepared in-house and Food products
( Section 13 ) 6th
13 served in messes run on the basis of mutuality Manufacturing (Industrial 1
Schedule Table II
and industrial canteens for workers. Inputs) General Masses
8 Machinery and equipment meant for power
( Section 13 ) 6th Manufacturing (Industrial
14 transmission and grid stations including under 152
Schedule Table III Inputs) General Masses
construction projects.
9 Foodstuff and other eatables prepared in the Food products
( Section 13 ) 6th
15 flight kitchens and supplied for consumption Manufacturing (Industrial 103
Schedule Table II
on-board in local flights. Inputs) General Masses
9 machinery, equipment and other education
( Section 13 ) 6th and research related items imported by Education Sector
16 4
Schedule Table III technical, training institutes, research General Masses
institutes, schools, colleges and universities:-
10 Agricultural produce of Pakistan, not
( Section 13 ) 6th Agriculture Sector
17 subjected to any further process of 1,751
Schedule Table II General Masses
manufacture.
( Section 13 ) 6th Poultry Sector General
18 11 Eggs including eggs for hatching 1,440
Schedule Table I Masses
( Section 13 ) 6th Food Sector General
19 11 Supply of ware potato and onions 17
Schedule Table II Masses
11 Following machinery and equipment for
( Section 13 ) 6th Manufacturing (Industrial
20 marble, granite and gem stone extraction and 10
Schedule Table III Inputs) General Masses
processing industries:
( Section 13 ) 6th 12 Live plants including bulbs, 1 [roots and
21 General Masses 316
Schedule Table I the like.]
13 Edible vegetables including roots and
tubers, 2 [except ware potato and onions], Food Products
( Section 13 ) 6th
22 whether fresh, frozen or otherwise preserved Manufacturing (Industrial 2,494
Schedule Table I
(e.g. in cold storage) but excluding those Inputs) General Masses
bottled 3 [or] canned 4 [***]
( Section 13 ) 6th Manufacturing (Industrial
23 13 Effluent treatment plants 40
Schedule Table III Inputs) General Masses
( Section 13 ) 6th Food Products General
24 14 Pulses. 8,505
Schedule Table I Masses
Page | 38 - Tax Expenditure Estimates 2021Page 39
( Section 13 ) 6th 14 items for use with solar energy:- Solar Manufacturing (Industrial
25 1,116
Schedule Table III Power Systems Inputs) General Masses
15 Edible fruits excluding imported fruits
(except fruits imported from Afghanistan)
( Section 13 ) 6th Food Products General
26 whether fresh, frozen or otherwise preserved 665
Schedule Table I Masses
but excluding those bottled 2 [or] canned 3
[***].
( Section 13 ) 6th 16 Red chillies excluding those sold in retail Food Products General
27 65
Schedule Table I packing bearing brand names and trademarks. Masses
( Section 13 ) 6th Manufacturing (Industrial
28 16 Raw cotton 1 [omitted] 51
Schedule Table II Inputs) General Masses
( Section 13 ) 6th 17 Ginger excluding those sold in retail Food Products General
29 1,604
Schedule Table I packing bearing brand names and trademarks Masses
( Section 13 ) 6th 17 Raw and pickled hides and skins, wet blue Manufacturing (Industrial
30 57
Schedule Table II hides and skins Inputs) General Masses
17 Machinery, equipment, raw materials,
components and other capital goods for use in
( Section 13 ) 6th building, fittings, repairing or refitting of Manufacturing (Industrial
31 2
Schedule Table III ships, boats or floating structures imported by Inputs)
Karachi Shipyard and Engineering Works
Limited.
( Section 13 ) 6th 18 Turmeric excluding those sold in retail Food Products General
32 50
Schedule Table I packing bearing brand names and trademarks. Masses
18 Supplies made by manufacturers of marble
and granite having annual turnover less than
( Section 13 ) 6th Manufacturing (Industrial
33 five million rupees even if their annual utility 2
Schedule Table II Inputs) General Masses
bill is more than eight hundred thousand
rupees
19 Cereals and products of milling industry 4
[excluding the products of milling industry, Manufacturing (Industrial
( Section 13 ) 6th
34 other than wheat and meslin flour, as sold in Inputs) General Masses 5,469
Schedule Table I
retail packing bearing brand name or a /Food items
trademark].
( Section 13 ) 6th Manufacturing (Industrial
35 19 Bricks 264
Schedule Table Ii Inputs) General Masses
19 Plant and machinery, except the items
listed under Chapter 87 of the Pakistan
Customs Tariff, imported for setting up of a
Special Economic Zone (SEZ) by zone
( Section 13 ) 6th developers and for installation in that zone by Manufacturing (Industrial
36 93
Schedule Table III zone enterprises, on one time basis as Inputs / SEZs
prescribed in the SEZ Act, 2012 and rules
thereunder subject to such condition,
limitations and restriction as a Federal Board
of Revenue may impose from time to time.
( Section 13 ) 6th 20 Seeds, fruit and spores of a kind used for Manufacturing (Industrial
37 2,888
Schedule Table I sowing. Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
38 20 Crushed stone 88
Schedule Table II Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
39 21 Cinchona bark. 1,096
Schedule Table I Inputs) General Masses
( Section 13 ) 6th 21 Poultry feed, cattle feed, sunflower seed
40 General Masses 28,072
Schedule Table II meal, rape seed meal and canola seed meal
( Section 13 ) 6th Food Products General
41 22 Sugar beet 6
Schedule Table I Masses
22 Single cylinder agriculture diesel engines
( Section 13 ) 6th Agriculture Sector
42 (compression ignition internal combustion 370
Schedule Table II General Masses
piston engines) of 3 to 36 HP.
( Section 13 ) 6th Manufacturing (Industrial
43 23 Match boxes 1,241
Schedule Table II Inputs) General Masses
Page | 39 - Tax Expenditure Estimates 2021Page 40
24 Edible oils and vegetable ghee, including
cooking oil, on which Federal Excise Duty is
charged, levied and collected 4 [by a registered
manufacturer or importer] as if it were a tax
( Section 13 ) 6th Food Products General
44 payable under section 3 of the Act. 5 352
Schedule Table I Masses
[Explanation.- Exemption of this entry shall
not be available 6 [on local supplies made by
importers,] distributors, wholesalers or
retailers.
( Section 13 ) 6th 24 LED or SMD lights and bulbs meant for Manufacturing (Industrial
45 1,960
Schedule Table II conservation of energy Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
46 25 Cottonseed oil 558
Schedule Table II Inputs) General Masses
26 Fruit juices, whether fresh, frozen or
( Section 13 ) 6th Food Products General
47 otherwise preserved but excluding those 139
Schedule Table I Masses
bottled, canned or package
( Section 13 ) 6th 27 Ice and waters excluding those for sale Manufacturing (Industrial
48 397
Schedule Table I under brand names or trademark Inputs) General Masses
29 Table salt including iodized salt excluding
( Section 13 ) 6th Manufacturing (Industrial
49 salt sold in retail packing bearing brand names 203
Schedule Table I Inputs) General Masses
and trademarks
31 Holy Quran, complete or in parts, with or
( Section 13 ) 6th without translation; Quranic Verses recorded
50 General Masses 252
Schedule Table I on any analogue or digital media; other Holy
books
32 [Newsprint, newspapers], journals,
( Section 13 ) 6th Manufacturing (Industrial
51 periodicals, books 6 [***] but excluding 1,540
Schedule Table I Inputs) General Masses
directories.
( Section 13 ) 6th 33 Currency notes, bank notes, shares, stocks
52 General Masses 2,921
Schedule Table I and bonds.
( Section 13 ) 6th
53 38 Monetary gold. General Masses 2
Schedule Table I
45 Dextrose and saline infusion giving sets 2
[***] along with empty non-toxic bags for Health Sector
( Section 13 ) 6th
54 infusion solution, Dextrose and saline infusion Manufacturing (Industrial 1,726
Schedule Table I
giving sets, Artificial parts of the body, Intra- Inputs) General Masses
Ocular lenses and Glucose testing equipment.
46[Goods imported by various agencies of the
United Nations, diplomats, diplomatic
missions, privileged persons and privileged
organizations which are covered under various Manufacturing (Industrial
( Section 13 ) 6th
55 Acts and, Orders, rules and regulations made Inputs) UN and 63
Schedule Table I
thereunder; and agreements by the Federal Diplomatic Missions
Government provided that such goods are
charged to zero-rate of customs duty under
Customs Act, 1969 (IV of 1969)
47 Import of articles of household and
( Section 13 ) 6th Manufacturing (Industrial
56 personal effects including vehicles and also 230
Schedule Table I Inputs) General Masses
the goods for donation to projects established
48 Goods imported or supplied under grants-
in-aid for which a specific consent has been
obtained from the 1 [Board]; supplies and
( Section 13 ) 6th imports under agreements signed by the Manufacturing (Industrial
57 612
Schedule Table I Government of Pakistan before the 30th June, Inputs) General Masses
1996, provided the agreements contained the
provision for exemption of tax at the time of
signing of agreement
( Section 13 ) 6th 49 Import of all goods received, in the event of
58 General Masses 5
Schedule Table I a natural disaster o
59 ( Section 13 ) 6th 50 Articles imported through post as General Masses 4
Page | 40 - Tax Expenditure Estimates 2021Page 41
Schedule Table I unsolicited gifts, subject to the same
conditions as are envisaged for the purposes of
applying zero-rate of customs duty under the
Customs Act, 1969. (IV of 1969)
51 Imported samples, subject to the same
( Section 13 ) 6th conditions as are envisaged for the purposes of
60 General Masses 66
Schedule Table I applying zero-rate of customs duty under the
Customs Act, 1969. (IV of 1969).
52 Goods imported by or donated to hospitals
( Section 13 ) 6th Health Sector
61 run by the Federal Government or a Provincial 2,163
Schedule Table I General Masses
Government; and non-profit
53 Import of all such gifts as are received, and
such equipment for fighting tuberculosis,
leprosy, AIDS and cancer and such equipment
and apparatus for the rehabilitation of the deaf,
( Section 13 ) 6th Health Sector
62 the blind, crippled or mentally retarded as are 6
Schedule Table I General Masses
purchased or otherwise secured by a charitable
non-profit making institution solely for the
purpose of advancing declared objectives of
such institution
54 Educational, scientific and cultural material
imported from a country signatory to
UNESCO Agreement or a country signatory to
( Section 13 ) 6th Educational Sector
63 bilateral commodity exchange agreement with 2
Schedule Table I General Masses
Pakistan, subject to the same conditions as are
envisaged for the purposes of exemption under
the Customs Act, 1969 (IV of 1969).
55 Import of replacement goods supplied free
of cost in lieu of defective goods imported,
( Section 13 ) 6th Manufacturing (Industrial
64 subject to similar conditions as are envisaged 1
Schedule Table I Inputs) General Masses
for the purposes of applying zero-rate of
customs duty under the Customs Act, 1969.
57 Goods (including dry fruits imported from
Importers
( Section 13 ) 6th Afghanistan) temporarily imported into
65 Manufacturing (Industrial 35
Schedule Table I Pakistan, meant for subsequent exportation
Inputs) General Masses
charged to zero-rat
58 Import of ship stores, subject to the
procedures, conditions and restrictions as may
be specified by the Collector of Customs in
Importers
( Section 13 ) 6th this behalf including those consignments of
66 Manufacturing (Industrial 1
Schedule Table I such stores that have been released without
Inputs) General Masses
charging sales tax since the 1st July, 1998, but
excluding such consignments of ship stores as
have been cleared on payment of sales tax
59 Artificial kidneys, eye cornea, hemodialysis
machines, hemodialyzers, A.V. fistula needles,
hemodialysis fluids and powder, blood tubing Health Sector
( Section 13 ) 6th
67 tines for dialysis and reverse osmosis plants Manufacturing (Industrial 3,275
Schedule Table I
for dialysis, double lumen catheter for dialysis, Inputs) General Masses
catheter for renal failure patient and peritoneal
dialysis solution, cochlear implants systems
Health Sector
( Section 13 ) 6th
68 Contraceptives and accessories thereof. Manufacturing (Industrial 758
Schedule Table I
Inputs) General Masses
61 Goods produced or manufactured in and
exported from Pakistan which are
Exporters
( Section 13 ) 6th subsequently imported in Pakistan within one
69 Manufacturing (Industrial 110
Schedule Table I year of their exportation, provided conditions
Inputs) General Masses
of section 22 of the Customs Act, 1969 (IV of
1969), are complied with.
Page | 41 - Tax Expenditure Estimates 2021Page 42
63 Personal wearing apparel and bona fide
( Section 13 ) 6th baggage imported by overseas Pakistanis and
70 General Masses 14
Schedule Table I tourists, if imported under various baggage
rules and is exempt from Customs duties
71 Goods and services purchased by non-
resident entrepreneurs and in trade fairs and
( Section 13 ) 6th
71 exhibitions subject to reciprocity and such Non-Residents 1
Schedule Table I
conditions and restrictions as may be specified
by the Board.
( Section 13 ) 6th 72 Uncooked poultry Meat whether or not Food Products General
72 1,282
Schedule Table I fresh, frozen or otherwise, preserved or packed Masses
Food Products
( Section 13 ) 6th
73 73 Milk Manufacturing (Industrial 17,000
Schedule Table I
Inputs) General Masses
Food Products
( Section 13 ) 6th 74 Flavored milk, excluding that sold in retail
74 Manufacturing (Industrial 66
Schedule Table I packing under a brand name
Inputs) General Masses
Food Products
( Section 13 ) 6th 75 Yogurt, excluding that sold in retail
75 Manufacturing (Industrial 67
Schedule Table I packing under a brand name
Inputs) General Masses
Food Products
( Section 13 ) 6th 76 Whey, excluding that sold in retail packing
76 Manufacturing (Industrial 151
Schedule Table I under a brand name
Inputs) General Masses
Food Products
( Section 13 ) 6th 77 Butter, excluding that sold in retail packing
77 Manufacturing (Industrial 195
Schedule Table I under a brand name
Inputs) General Masses
Food Products
( Section 13 ) 6th 78 Desi ghee, excluding that sold in retail
78 Manufacturing (Industrial 124
Schedule Table I packing under a brand name
Inputs) General Masses
Food Products
( Section 13 ) 6th 79 Cheese, excluding that sold in retail
79 Manufacturing (Industrial 222
Schedule Table I packing under a brand name
Inputs) General Masses
80 Processed cheese not grated or powdered, Food Products
( Section 13 ) 6th
80 excluding that sold in retail packing under a Manufacturing (Industrial 547
Schedule Table I
brand name Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
81 81 Cotton seed 7,237
Schedule Table I Inputs) General Masses
82 Frozen prepared or preserved sausages and
Food Products
( Section 13 ) 6th similar products of poultry meat or meat offal
82 Manufacturing (Industrial 205
Schedule Table I 2 [, excluding those sold in retail packing
Inputs) General Masses
under a brand name or a trademark]
83 Meat and similar products of prepared
frozen or preserved meat or meat offal of all Food Products
( Section 13 ) 6th
83 types including poultry, meat and fish 3 Manufacturing (Industrial 2,144
Schedule Table I
[,excluding those sold in retail packing under a Inputs) General Masses
brand name or a trademark]
Food Products
( Section 13 ) 6th
84 84 preparation suitable for infants Manufacturing (Industrial 2,701
Schedule Table I
Inputs) General Masses
Food Products
( Section 13 ) 6th 85 Fat filled milk excluding that sold in retail
85 Manufacturing (Industrial 1,966
Schedule Table I packing under a brand name or a trademark]
Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
86 86 Colors in sets (Poster colors) 122
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
87 87 Writing, drawing and making inks 54
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
88 88Erasers 28
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
89 89 Exercise books 60
Schedule Table I Inputs) General Masses
Page | 42 - Tax Expenditure Estimates 2021Page 43
( Section 13 ) 6th Manufacturing (Industrial
90 90 Pencil sharpeners 27
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
91 91 Energy saver lamps 99
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
92 92Sewing machines of the household type 25
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
93 93 Bicycles 180
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
94 94 Wheelchairs 49
Schedule Table I Inputs) General Masses
96 Other drawing, marking out or
( Section 13 ) 6th Manufacturing (Industrial
95 mathematical calculating instruments 4
Schedule Table I Inputs) General Masses
(geometry box)
( Section 13 ) 6th 97 Pens, ball pens, markers and porous tipped Manufacturing (Industrial
96 149
Schedule Table I pens Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
97 98 Pencils including color pencils 322
Schedule Table I Inputs) General Masses
( Section 13 ) 6th 99 Compost (non-commercial fertilizer) Manufacturing (Industrial
98 149
Schedule Table I produced and supplied locally Inputs) General Masses
100 Construction materials to 6 [Gwadar]
( Section 13 ) 6th Manufacturing (Industrial
99 Export processing Zone’s investors and to 16
Schedule Table I Inputs) General Masses
Export Processing Zone 3
( Section 13 ) 6th 101 Raw and pickled hides and skins, wet blue Manufacturing (Industrial
100 5
Schedule Table I hides and skins, finished leather, and Inputs) General Masses
102 Machinery, equipment and materials
imported either for exclusive use within the
limits of Export Processing Zone or for
making exports therefrom, and goods imported
for warehousing purpose in Export Processing
Zone, subject to the conditions that such
( Section 13 ) 6th Manufacturing (Industrial
101 machinery, equipment, materials and goods 27
Schedule Table I Inputs) General Masses
are imported by investors of Export Processing
Zones, and all the procedures, limitations and
restrictions as are applicable on such goods
under the Customs Act, 1969 (IV of 1969) and
rules made thereunder shall mutatis mutandis,
apply.
( Section 13 ) 6th 103 Import and supply thereof, up to the year, Manufacturing (Industrial
102 104
Schedule Table I of ships Inputs) General Masses
104 Substances registered as drugs under the
Drugs Act, 1976 (XXXI of 1976) and
( Section 13 ) 6th medicaments as are classifiable under chapter Manufacturing (Industrial
103 91,892
Schedule Table I 30 of the First Schedule to the Customs Act, Inputs) General Masses
1969 (IV of 1969) except the following, even
if medicated or medicinal in nature, n
105 Raw materials for the basic manufacture
of pharmaceutical active ingredients and for
manufacture of pharmaceutical products,
provided that in case of import, only such raw
Health Sector
( Section 13 ) 6th materials shall be entitled to exemption which
104 Manufacturing (Industrial 11,076
Schedule Table I are liable to customs duty not exceeding 1
Inputs) General Masses
[eleven] per cent ad valorem, either under the
First Schedule 2 [or Fifth Schedule] to the
Customs Act, 1969 (IV of 1969) or under a
notification issued under section 19 thereof.
( Section 13 ) 6th 106 Import of Halal edible offal of bovine
105 General Masses 90
Schedule Table I animals
107 Import and supply of iodized salt bearing
( Section 13 ) 6th
106 brand names and trademarks whether or not General Masses 268
Schedule Table I
sold in retail packing.
Page | 43 - Tax Expenditure Estimates 2021Page 44
108 Components or sub-components of energy
saver lamps, namely:- (a) Electronic Circuit
(b) Plastic Caps (upper and lower) (c) Base
( Section 13 ) 6th Manufacturing (Industrial
107 Caps B22 and E27 (d) Tungsten Filaments (e) 7
Schedule Table I Inputs) General Masses
Lead-in-wire (f) Fluorescent powder (Tri Band
Phospher) (g) Adhesive Additive (h) Al-oxide
Suspension (i) Capping Cement (j) Stamp Pad
110 The following items with dedicated use of
renewable source of energy like solar and
wind, subject to certification by the
Alternative Energy Development Board Manufacturing (Industrial
( Section 13 ) 6th (AEDB), Islamabad 1 [for the period ending Inputs) General Masses
108 1,762
Schedule Table I on the 30th June, 2023]:- (a) Solar PV panels; Alternative Energy
(b) LVD induction lamps; (c) SMD, LEDs, Development
with or without ballast, with fittings and
fixtures; (d) Wind turbines including
alternators and mast; (e) Solar Tor
112 Following cardiology/cardiac surgery, Health Sector
( Section 13 ) 6th
109 neurovascular, electrophysiology, endo- Manufacturing (Industrial 1,620
Schedule Table I
surgery, Inputs) General Masses
113 High Efficiency Irrigation Equipment (If
used for agriculture sector) (1) Submersible
pumps (up to 75 lbs and head 150 meters) (2)
Sprinklers including high and low pressure
Agriculture Sector
( Section 13 ) 6th (center pivotal) system, conventional sprinkler
110 Manufacturing (Industrial 209
Schedule Table I equipment, water reel travelling sprinkler, drip
Inputs) General Masses
or trickle irrigation equipment, mint irrigation
sprinkler system (3) Air release valves,
pressures gauges, water meters, back flow
preventers, and automatic controllers
114 Green House Framing and Other Green
( Section 13 ) 6th Manufacturing (Industrial
111 House Equipment (If used for Agriculture 296
Schedule Table I Inputs) General Masses
Sector) (1) Tunnel farming
115 Plant, machinery and equipment imported
for setting up fruit processing and preservation
units in Gilgit-Baltistan, Balochistan Province Manufacturers of
( Section 13 ) 6th and Malakand Division up to the 30th June, backward areas
112 2
Schedule Table I 2019 subject to the same conditions and (Industrial Inputs)
procedure as are applicable for import of such General Masses
plant, machinery and equipment under the
Customs Act, 1969 (IV of 1969)
116 Plant, machinery and equipment imported
for setting up industries in FATA up to 30th
Manufacturer in FATA
( Section 13 ) 6th June 2019 subject to the same conditions and
113 Manufacturing (Industrial 1
Schedule Table I procedure as are applicable for import of such
Inputs) General Masses
plant, machinery and equipment under the
Customs Act, 1969 (IV of 1969)
117 Appliances and items required for ostomy
procedures as specified in the Chapter 99 of
( Section 13 ) 6th Manufacturing (Industrial
114 the First Schedule to the Customs Act, 1969, 2
Schedule Table I Inputs) General Masses
subject to same conditions as specified
therein]
120 Diagnostic kits or equipment, namely:-
HIV Kits 4C Es Trionyx 5C Cell control
normal Bovine precision multi sera Pregnancy
Health Sector
( Section 13 ) 6th test DNA SSP DRB Generic IC Reticulocyte
115 Manufacturing (Industrial 4,165
Schedule Table I count (control) retic C Control Kit for vitamin
Inputs) General Masses
B12 estimation Ferritin kit HEV (Hepatitis E
virus) ID-DA Cell Urine Analysis Strips
Albumin beg Cratinin
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( Section 13 ) 6th 121 Blood Bag CPDA-1 with blood Manufacturing (Industrial
116 253
Schedule Table I transfusion set pack in aluminum foil with set Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
117 122 Urine drainage bags 24
Schedule Table I Inputs) General Masses
123 Aircraft, whether imported or acquired on
wet or dry lease 1 [:] Provided that in case of
Health Sector
( Section 13 ) 6th import or acquisition on wet or dry lease by
118 Manufacturing (Industrial 2
Schedule Table I Pakistan International Airlines Corporation,
Inputs)
this exemption shall be available with effect
from 19th March, 2015.
( Section 13 ) 6th 125 Spare parts for use in aircrafts, trainer Manufacturing (Industrial
119 5
Schedule Table I aircrafts or simulators Inputs)
126 Machinery, equipment and tools for
( Section 13 ) 6th setting up maintenance, repair and overhaul Manufacturing (Industrial
120 2
Schedule Table I (MRO) workshop by MRO company Inputs)
recognized by Aviation Division
127 Operational tools, machinery, equipment
( Section 13 ) 6th and furniture and fixtures on one-time basis Manufacturing (Industrial
121 26
Schedule Table I for setting up Greenfield airports by a Inputs) General Masses
company authorized by Aviation Division.
( Section 13 ) 6th 128 Aviation simulators imported by airline Manufacturing (Industrial
122 76
Schedule Table I company recognized by Aviation Division Inputs)
( Section 13 ) 6th Manufacturing (Industrial
123 129 Import of plant, machinery and 28
Schedule Table I Inputs) General Masses
130 Sodium Iron (Na Fe EDTA), and other
premixes of vitamins, minerals and micro-
( Section 13 ) 6th Manufacturing (Industrial
124 nutrients (food grade) and subject to 95
Schedule Table I Inputs) General Masses
conditions imposed for importation under the
Customs Act, 1969]
( Section 13 ) 6th 131 Laptop computers, notebooks whether or Industrial Inputs) General
125 2,154
Schedule Table I not incorporating multimedia kit Masses
( Section 13 ) 6th
126 132 Personal computers General Masses 1,116
Schedule Table I
133 Pesticides and their active ingredients
registered by the Department of Plant Agriculture Sector
( Section 13 ) 6th
127 Protection under the Agricultural Pesticides Manufacturing (Industrial 18,108
Schedule Table I
Ordinance, 1971(II of 1971), stabilizers, Inputs) General Masses
emulsifiers and solvents
( Section 13 ) 6th Manufacturing (Industrial
128 135 Sunflower and canola hybrid 11
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
129 136 Combined harvesters up to five years old 15
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
130 138Fish Feed 47
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
131 139 Fans for dairy farms 1
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
132 140 Bovine semen 51
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
133 141 Preparations for making animal feed 1,232
Schedule Table I Inputs) General Masses
142 Promotional and advertising material
including technical literature, pamphlets,
( Section 13 ) 6th Manufacturing (Industrial
134 brochures and other giveaways of no 3
Schedule Table I Inputs) General Masses
commercial value, distributed free of cost by
the exhibitors
146 Equipment imported by M/s China
( Section 13 ) 6th
135 Railway Corporation to furnished and installed Mass transit Schemes 1
Schedule Table I
in Orange Line Metro Lahore
Page | 45 - Tax Expenditure Estimates 2021Page 46
Goods supplied to German Development
( Section 13 ) 6th
136 Agency (Deutsche Gesellschaft für General Masses 10
Schedule Table I
Internationale Zusammenarbeit) GIZ
148 Imported construction materials and goods
imported by M/s China State Construction
Engineering Corporation Limited (M/s
CSCECL), whether or not locally
manufactured, for construction of Karachi-
Peshawar Motorway (Sukkur-Multan Section)
subject to fulfilment of same conditions,
limitations and restrictions as are specified
under S. No. 145 of this table, provided that
( Section 13 ) 6th
137 total incidence of exemptions of all duties and Roads and Highways 6
Schedule Table I
taxes in respect of construction materials and
goods imported for the project shall not exceed
ten thousand eight hundred ninety-eight
million rupees including the benefit of
exemption from duties and taxes availed
before 30th June, 2018 under the provisions of
the Sales Tax Act, 1990, the Customs Act,
1969, the Federal Excise Act, 2005 and the
Inco
150 Plant and machinery excluding consumer
durable goods and office equipment as
imported by greenfield industries, intending to
manufacture taxable goods, during their
construction and installation period subject to
conditions noted below and issuance of
exemption certificate by the Commissioner
( Section 13 ) 6th Manufacturing (Industrial
138 Inland Revenue having jurisdiction:- 128
Schedule Table I Inputs) General Masses
Conditions: (a) the importer is registered under
the Act on or after the first day of July, 2019;
and (b) the industry is not established by
splitting up or reconstruction or reconstitution
of an undertaking already in existence or by
transfer of machinery or plant from another
industrial undertaking in Pakistan
152 Supplies of electricity, as made from the
day of assent to the Constitution (Twenty-fifth
Amendment) Act, 2018, till 30th June, 2023,
to all residential and commercial consumers in
( Section 13 ) 6th
139 tribal areas, and to such industries in the tribal General Masses / FATA 4,238
Schedule Table I
areas which were set and started their
industrial production before 31st May, 2018,
but excluding steel and ghee or cooking oil
industries
153Steel billets, ingots, ship plates, bars and
other long re-rolled profiles, on such imports Steel Sector
( Section 13 ) 6th
140 and supplies by the manufacturer on which Manufacturing (Industrial 29
Schedule Table I
federal excise duty is payable in sales tax Inputs) General Masses
mode
100AMaterials and equipment 2 [(plant,
machinery, equipment, appliances and
accessories)] for construction and operation of
3 [Gwadar] Port and development of Free
Zone for 3 [Gwadar] Port as imported by or
( Section 13 ) 6th
141 supplied to China Overseas Ports Holding Exporters 19
Schedule Table I
Company Limited (COPHCL) and its
operating companies namely (i) China
Overseas Ports Holding Company Pakistan
(Private) Limited (ii) Gwadar International
Terminal Limited, (iii) Gwadar Marin Services
Page | 46 - Tax Expenditure Estimates 2021Page 47
Limited and (iv) Gwadar Free Zone Company
Limited, their contractors and sub-contractors;
and Ship Bunker Oils bought and sold to the
ships calling on/visiting 3 [Gwadar] Port, 3
[by the aforesaid operating companies] having
Concession Agreement with the Gwadar Port
Authority, for a period of forty year, subject to
the following conditions and procedure,
100A((i)) This exemption shall be admissible
only to China Overseas Ports Holding
( Section 13 ) 6th Company Limited (COPHCL) and its
142 Construction / Highways 5
Schedule Table I operating companies, their contractors and
subcontractors which hold the Concession
Agreement;
100A((ii)) Ministry of Ports and Shipping
shall certify in the prescribed manner and
format as per Annex-I that the imported
materials and equipment are bonafide
requirement for construction and operation of
1 [Gwadar] Port and development of Free
Zone for 1 [Gwadar] Port. The authorized
officer of that Ministry shall furnish all
relevant information online to Pakistan
Customs against a specific user ID and
password obtained under section 155D of the Manufacturing (Industrial
( Section 13 ) 6th
143 Customs Act, 1969 (IV of 1969). In already Inputs) Ports and 11
Schedule Table I
computerized Collectorate or Customs Shipping
station, where the computerized system is
not operational, the Project Director or any
other person authorized by the Collector in this
behalf shall enter the requisite information in
the Customs Computerized System on daily
basis, whereas entry of the data obtained from
the customs stations which have not yet been
computerized shall be made on weekly basis,
provided that this condition shall not apply
to ship bunker oils; and
Health Sector
( Section 13 ) 6th 104(a) filled infusion solution bags imported
144 Manufacturing (Industrial 318
Schedule Table I with or without infusion given sets;
Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
145 108(a) Electronic Circuit 1
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
146 108(b) Plastic Caps (upper and lower) 3
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
147 108(i) Capping Cement 1
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
148 110(a)Solar PV panels; 379
Schedule Table I Inputs) General Masses
( Section 13 ) 6th 110© SMD, LEDs, with or without ballast, Manufacturing (Industrial
149 3
Schedule Table I with fittings and fixtures; Inputs) General Masses
110(g) PV modules along with related
( Section 13 ) 6th Manufacturing (Industrial
150 components, including invertors, charge 284
Schedule Table I Inputs) General Masses
controllers and batteries.
110(j) Invertors (off-grid/on grid/ hybrid) with
( Section 13 ) 6th provision for direct connection/input from Manufacturing (Industrial
151 4
Schedule Table I renewable energy source and with Maximum Inputs) General Masses
Power Point Tracking (MPPT).
( Section 13 ) 6th Manufacturing (Industrial
152 112A(vi) Inflation Devices/Priority Packs 1
Schedule Table I Inputs) General Masses
( Section 13 ) 6th 112A(xxv) Intracardiac Echocardiography Health Sector
153 2
Schedule Table I Machine & Catheters] Manufacturing (Industrial
Page | 47 - Tax Expenditure Estimates 2021Page 48
Inputs) General Masses
Health Sector
( Section 13 ) 6th
154 112J(ii) Cannulas Manufacturing (Industrial 1
Schedule Table I
Inputs) General Masses
Health Sector
( Section 13 ) 6th
155 112K(i) Cardiac Angiography Machine Manufacturing (Industrial 16
Schedule Table I
Inputs) General Masses
Health Sector
( Section 13 ) 6th
156 112K(ii) Echocardiography Machines Manufacturing (Industrial 1
Schedule Table I
Inputs) General Masses
( Section 13 ) 6th 113(i) Submersible pumps (up to 75 lbs and Manufacturing (Industrial
157 14
Schedule Table I head 150 meters) Inputs) General Masses
114(i) Tunnel farming equipment 1
[consisting
( Section 13 ) 6th Manufacturing (Industrial
158 of plastic covering and 46
Schedule Table I Inputs) General Masses
mulch film, anti-insect
net and shade net]
( Section 13 ) 6th Manufacturing (Industrial
159 114(ii) Greenhouses (prefabricated) 6
Schedule Table I Inputs) General Masses
14(1) Off-grid/On-grid solar power system
( Section 13 ) 6th Manufacturing (Industrial
160 (with or without provision for USB/charging 44
Schedule Table III Inputs) General Masses
port) comprising of :
( Section 13 ) 6th Manufacturing (Industrial
161 14(1)(i) PV Module. 114
Schedule Table III Inputs) General Masses
14(1)(iii) Batteries for specific utilization with
( Section 13 ) 6th Manufacturing (Industrial
162 the system (not exceeding 50 Ah in case of 2
Schedule Table III Inputs) General Masses
portable system).
14(1)(v) Inverters (off-grid/ on-grid/ hybrid
( Section 13 ) 6th with provision for direct connection/ input Manufacturing (Industrial
163 5
Schedule Table I renewable energy source and with Maximum Inputs) General Masses
Power Point Tracking (MPPT)
Manufacturing (Industrial
( Section 13 ) 6th
164 143(i) Hearing aids (all types and kinds) Inputs) General Masses / 2
Schedule Table I
Differently-abled persons
( Section 13 ) 6th Manufacturing (Industrial
165 143(i)(a) Audiometers 1
Schedule Table I Inputs) General Masses
14A systems and items for dedicated use with
( Section 13 ) 6th renewable source of energy like solar, wind, Manufacturing (Industrial
166 233
Schedule Table III geothermal 1 [as imported on or before the Inputs) General Masses
30th June, 2023.]
( Section 13 ) 6th 14A(10) Solar chargers for charging electronic Manufacturing (Industrial
167 1
Schedule Table III devices Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
168 14A(4a) Solar Desalination System 1
Schedule Table III Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
169 14A(4b)(i) Solar photo voltaic panels. 1
Schedule Table III Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
170 14A(4b)(iv) Charge controllers. 8
Schedule Table III Inputs) General Masses
14A(4b)(v) Inverters (off grid/on grid/ hybrid)
( Section 13 ) 6th with provision for direct connection/input Manufacturing (Industrial
171 1
Schedule Table III from renewable energy source and with Inputs) General Masses
Maximum Power Point Tracking (MPPT)
( Section 13 ) 6th Manufacturing (Industrial
172 14A(7a) PV Modules. 85
Schedule Table III Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
173 14A(7b) Parts for PV Modules 8
Schedule Table I Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
174 14A(7b)(i) Solar cells. 10
Schedule Table III Inputs) General Masses
Page | 48 - Tax Expenditure Estimates 2021Page 49
( Section 13 ) 6th Manufacturing (Industrial
175 14A(8) Solar Cell Manufacturing Equipment. 2
Schedule Table III Inputs) General Masses
Manufacturing (Industrial
( Section 13 ) 6th
176 15(a) Sprinkler Equipment Inputs) General Masses / 4
Schedule Table II
Agriculture Sector
( Section 13 ) 6th Manufacturing (Industrial
177 15(b) Drip Equipment 13
Schedule Table II Inputs) General Masses
( Section 13 ) 6th 15(i) SMD/LED/LVD lights with or without Manufacturing (Industrial
178 84
Schedule Table III ballast, fittings and fixtures. Inputs) General Masses
( Section 13 ) 6th 15(ii) SMD/LED/LVD lights, with or without Manufacturing (Industrial
179 6
Schedule Table III ballast, PV module, fitting and fixtures Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
180 15(iii) Tubular Day lighting Device. 7
Schedule Table III Inputs) General Masses
15(ix) PV module, with or without, the related
components including invertors (off-grid/on
grid/ hybrid) with provision for direct
( Section 13 ) 6th Manufacturing (Industrial
181 connection/input from renewable energy 234
Schedule Table III Inputs) General Masses
source and with Maximum Power Point
Tracking (MPPT), charge controllers and solar
batteries
( Section 13 ) 6th Manufacturing (Industrial
182 15(v) Solar torches. 3
Schedule Table III Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
183 15(viii) LED Bulb/Tube lights. 68
Schedule Table I Inputs) General Masses
( Section 13 ) 6th 15(x) Light emitting diodes (light emitting in Manufacturing (Industrial
184 6
Schedule Table I different colors). Inputs) General Masses
( Section 13 ) 6th 15(xi) Water pumps operating on solar energy Manufacturing (Industrial
185 19
Schedule Table I along with solar pump controllers Inputs) General Masses
15(xv) Invertors (off-grid/on grid/hybrid) with
( Section 13 ) 6th provision for direct connection/input from Manufacturing (Industrial
186 8
Schedule Table III renewable energy source and with Maximum Inputs) General Masses
Power Point Tracking (MPPT).
Importers
( Section 13 ) 6th 150(a) the importer is registered under the Act
187 Manufacturing (Industrial 28
Schedule Table I on or after the first day of July, 2019;
Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
188 151(a) Supplies; and 1,233
Schedule Table I Inputs) General Masses
151(b) imports of plant, machinery, equipment
for installation in tribal areas and of industrial
inputs by the industries located in the tribal
areas, as defined in the Constitution of Islamic
Republic of Pakistan,- as made till 30th June,
( Section 13 ) 6th FATA
189 2023, to which the provisions of the Act or the 34
Schedule Table I General Masses
notifications issued thereunder, would have
not applied had Article 247 of the Constitution
not been omitted under the Constitution
(Twenty-fifth Amendment) Act, 2018
(XXXVII of 2018):
( Section 13 ) 6th 15A(i) Housing /shell. Shell cover and base Manufacturing (Industrial
190 6
Schedule Table III cap for all kinds of LED lights and bulbs Inputs) General Masses
( Section 13 ) 6th 15A(ii) Bare and stuffed Metal Clad Printed Manufacturing (Industrial
191 5
Schedule Table III Circuit Boards (MCPCB) for LED Inputs) General Masses
( Section 13 ) 6th 15A(iii) Constant Current Power Supply for of Manufacturing (Industrial
192 10
Schedule Table III LED Lights and Bulbs Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
193 18(iii) Microprocessor/ Controllers 3
Schedule Table III Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
194 18(xii) LCD / LED Screen 1
Schedule Table III Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
195 29C Glass bangles 1
Schedule Table I Inputs) General Masses
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( Section 13 ) 6th Manufacturing (Industrial
196 2A Medical Equipment. 8
Schedule Table III Inputs) General Masses
( Section 13 ) 6th 2A(ii) Medical surgical dental or veterinary Manufacturing (Industrial
197 10
Schedule Table III furniture Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
198 2A(iii) Operating Table. 1
Schedule Table III Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
199 2A(vii) Cooling Cabinet. 1
Schedule Table III Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
200 2A(viii) Refrigerated Liquid Bath. 2
Schedule Table III Inputs) General Masses
Health Sector
( Section 13 ) 6th
201 2B Cardiology / Cardiac Surgery Equipment Manufacturing (Industrial 20
Schedule Table III
Inputs) General Masses
Health Sector
( Section 13 ) 6th
202 2B(iii) Intravenous cannula i.v. catheter. Manufacturing (Industrial 12
Schedule Table III
Inputs) General Masses
Health Sector
( Section 13 ) 6th
203 2C Disposable Medical Devices Manufacturing (Industrial 14
Schedule Table III
Inputs) General Masses
( Section 13 ) 6th Manufacturing (Industrial
204 2D(ii) Fixtures & fittings for hospitals 2
Schedule Table III Inputs) General Masses
3(i) Machinery, equipment, materials, capital
goods, specialized vehicles (4x4 non-luxury)
( Section 13 ) 6th i.e. single or double cabin pickups, Manufacturing (Industrial
205 7
Schedule Table III accessories, spares, chemicals and Inputs) General Masses
consumables meant for mine construction
phase or extraction phase.
3(ii) Construction machinery, equipment and
specialized vehicles, excluding passenger
( Section 13 ) 6th Manufacturing (Industrial
206 vehicles, imported on temporary basis as 28
Schedule Table III Inputs) General Masses
required for mine construction or extraction
phase
52A Goods 2 [excluding electricity and natural
gas] supplied to hospitals run by the Federal or
( Section 13 ) 6th Provincial Governments or charitable Manufacturing (Industrial
207 4,311
Schedule Table I operating hospitals of fifty beds or more or the Inputs) General Masses
teaching hospitals of statutory universities of
two hundred or more beds.
7(i) Machinery, equipment and spares meant
for initial installation, balancing,
modernization, replacement or expansion of
projects for power generation through nuclear
( Section 13 ) 6th Manufacturing (Industrial
208 and renewable energy sources like solar, wind, 134
Schedule Table III Inputs) General Masses
micro-hydel bio-energy, ocean, and waste-to-
energy and hydrogen cell. 1 [This exemption
in relation to renewable energy shall remain in
force up to the 30th June, 2023.]
7(ii) Construction machinery, equipment and
Construction Sector
( Section 13 ) 6th specialized vehicles, excluding passenger
209 Manufacturing (Industrial 2
Schedule Table I vehicles, imported on temporary basis as
Inputs) General Masses
required for the construction of project.
73A Milk and cream, concentrated or
( Section 13 ) 6th containing added sugar or other sweetening Food Products
210 1,404
Schedule Table I matter, excluding that sold in retail packing General Masses
under a brand name
8(i) Machinery and equipment meant for
( Section 13 ) 6th Manufacturing (Industrial
211 power transmission and grid stations including 35
Schedule Table III Inputs) General Masses
under construction projects.
( Section 13 ) 6th 8(i)(b) apparatus, appliances, metering and Manufacturing (Industrial
212 11
Schedule Table III testing apparatus, mechanical and electrical Inputs) General Masses
Page | 50 - Tax Expenditure Estimates 2021Page 51
control, transmission gear and transmission
tower, power transmission and distribution
cables and conductors, insulators, damper
spacer and hardware and parts thereof adapted
to be used in conjunction with the machinery
and equipment as specified in clause (a)
above; and
9(xxii) Parts and accessories of automatic
( Section 13 ) 6th Manufacturing (Industrial
213 regulating or controlling instruments and 26
Schedule Table III Inputs) General Masses
apparatus
Sub Total 283,880
Less 45% adjustment on account of value addition to taxable activities 127,746
Total 156,134
Exemption Under 8th Scheduled at Reduced Rates
Reduced Rate of 1%
Legal Description Estimate
Sr Intended Beneficiary Rates
Reference Exemption or Concession Rs. Million
Clause (aa) of Manufacturing
1 sub-Section 2 of 62 Gold, in unworked condition (Industrial Inputs) 7
1
Section 3 General Masses
Clause (aa) of 63 Articles of jewelry, or parts Manufacturing
2 sub-Section 2 of thereof, of precious metal or of (Industrial Inputs) 324
1
Section 3 metal clad with precious metal. General Masses
Sub Total 330
Reduced Rate of 2%
Legal Description Estimate
Sr Intended Beneficiary Rates
Reference Exemption or Concession Rs. Million
Clause (aa) of Manufacturing
3 sub-Section 2 of 52 Fertilizers (all types) (Industrial Inputs) 73,968
2
Section 3 General Masses
Clause (aa) of
4 sub-Section 2 of 52 Fertilizers (All types) 16,320
2
Section 3
Sub Total 90,288
Reduced Rate of 5%
Legal Description Estimate
Sr Intended Beneficiary Rates
Reference Exemption or Concession Rs.Million
Clause (aa) of 29(xvii) Harvesting threshing and
5 sub-Section 2 of storage equipment: Combined Agriculture Sector 281
5
Section 3 harvesters
Clause (aa) of
23 second hand and worn clothing
6 sub-Section 2 of General Masses 4,072
or footwear 5
Section 3
17 Re-importation of foreign origin
goods which were temporarily
Clause (aa) of
exported out of Pakistan subject to
7 sub-Section 2 of Exporters 156
similar conditions as are envisaged 5
Section 3
for the purposes of customs duty
under the Customs Act,1969, and
Page | 51 - Tax Expenditure Estimates 2021Page 52
taxable value shall be the value
determined under PCT h
Clause (aa) of Manufacturing
8 sub-Section 2 of 26(xii)Ditcher (Industrial Inputs) 1
5
Section 3 General Masses
Clause (aa) of Manufacturing
9 sub-Section 2 of 28(iv)Boom or field sprayers (Industrial Inputs) 2
5
Section 3 General Masses
Clause (aa) of Manufacturing
10 sub-Section 2 of 26(xix)Land leveler (Industrial Inputs) 39
5
Section 3 General Masses
Clause (aa) of Manufacturing
11 sub-Section 2 of 26(vii)Border disc (Industrial Inputs) 7
5
Section 3 General Masses
Clause (aa) of 27(ii) Seeding or planting
12 sub-Section 2 of equipment: Cotton or maize planter Agriculture Sector 1
5
Section 3 with fertilizer attachment
Clause (aa) of
27(vii) Seeding or planting
13 sub-Section 2 of Agriculture Sector 1
equipment: Sugarcane planter 5
Section 3
Clause (aa) of Manufacturing
29(iii)Maize or ground nut thresher
14 sub-Section 2 of (Industrial Inputs) 3
or Sheller 5
Section 3 General Masses
Clause (aa) of Manufacturing
15 sub-Section 2 of 28(v)Self-propelled sprayers (Industrial Inputs) 3
5
Section 3 General Masses
26(xx) Laser land leveler
Clause (aa) of comprising of laser transmitter,
16 sub-Section 2 of laser receiver, control box, rigid General Masses 14
5
Section 3 mast pack, with or without scrapper
under respective heading
30(ii) Postharvest handling and
Clause (aa) of
processing & miscellaneous
17 sub-Section 2 of General Masses 6
machinery: Fodder and feed cube 5
Section 3
maker equipment
Clause (aa) of 29(x) Harvesting threshing and
18 sub-Section 2 of storage equipment: Wheat or rice Agriculture Sector 33
5
Section 3 reaper
8 (Chapter 84 and 85) If imported
by registered manufacturer who is
member of Pakistan Dairy
Clause (aa) of
Association 1. Milk chillers. 2. Food Products
19 sub-Section 2 of 9
Tubular heat exchanger (for General Masses 5
Section 3
pasteurization). 3. Milk processing
plant, milk spray drying plant, Milk
UHT plant. 4. Milk filters 5.
Clause (aa) of 27(vi) Seeding or planting
20 sub-Section 2 of equipment: Canola or sunflower Agriculture Sector 8
5
Section 3 drill
Clause (aa) of 67LNG imported for servicing Manufacturing
21 sub-Section 2 of CNG sector and local supplies (Industrial Inputs) 2,092
5
Section 3 thereof General Masses
Clause (aa) of Manufacturing
23 sub-Section 2 of 29(vii)Sunflower thresher (Industrial Inputs) 3
5
Section 3 General Masses
Clause (aa) of Manufacturing
24 sub-Section 2 of 26(xvii)K.R.Karundi (Industrial Inputs) 3
5
Section 3 General Masses
Clause (aa) of 30(ii)Fodder and feed cube maker Manufacturing
25 2
sub-Section 2 of equipment (Industrial Inputs) 5
Page | 52 - Tax Expenditure Estimates 2021Page 53
Section 3 General Masses
Clause (aa) of Manufacturing
26 sub-Section 2 of 29(xiii)Post hole digger (Industrial Inputs) 1
5
Section 3 General Masses
Clause (aa) of Manufacturing
27 sub-Section 2 of 29(v)Groundnut digger (Industrial Inputs) 1
5
Section 3 General Masses
Clause (aa) of 29(v) Harvesting threshing and
22 sub-Section 2 of storage equipment: Potato digger or Agriculture Sector 1
5
Section 3 harvester
Clause (aa) of Manufacturing
44 Sales tax @ 5% of Phosphoric
28 sub-Section 2 of (Industrial Inputs) 5,465
Acid 5
Section 3 General Masses
Clause (aa) of 9Capital goods otherwise not Manufacturing
29 sub-Section 2 of exempted, for Transmission Line (Industrial Inputs) 3,659
5
Section 3 Projects. General Masses
Clause (aa) of Manufacturing
30 sub-Section 2 of Natural gas (Industrial Inputs) 2,796
5
Section 3 General Masses
Clause (aa) of
29(ix) Harvesting threshing and
31 sub-Section 2 of Agriculture Sector 8
storage equipment: Fodder rake 5
Section 3
4 Oil Seeds meant for sowing
Clause (aa) of
subject to conditions against S.No.
32 sub-Section 2 of Agriculture Sector 14
4 of Table-I of 8th Schedule to the 5
Section 3
Sales Tax Act, 1990.
Clause (aa) of Manufacturing
33 sub-Section 2 of 25 Agricultural tractors (Industrial Inputs) 4,285
5
Section 3 General Masses
30(i) Postharvest handling and
Clause (aa) of processing & miscellaneous
34 sub-Section 2 of machinery: Vegetables and fruits Agriculture Sector 17
5
Section 3 cleaning and sorting or grading
equipment
28(i) Irrigation drainage and
Clause (aa) of
agrochemical application
35 sub-Section 2 of Agriculture Sector 4
equipment: Tube wells filters or 5
Section 3
strainers
2 Cool chain machinery and
equipment.- subject to conditions.
Clause (aa) of
Subject to conditions given in
36 sub-Section 2 of Mining Sector 111
preamble of Table-2 of 8th 5
Section 3
Schedule to the Sales Tax Act,
1990.
Clause (aa) of
27(v) Seeding or planting
37 sub-Section 2 of Agriculture Sector 21
equipment: Rice transplanting 5
Section 3
25 Agricultural Tractors HS code
Clause (aa) of 8701.9220 & 8701.9320 are added
38 sub-Section 2 of in the system in pursuance of letter Agriculture Sector 412
5
Section 3 C>No. 4/24-STB/2017 dated
21.07.2017
Clause (aa) of Manufacturing
30(i)Vegetables and fruits cleaning
39 sub-Section 2 of (Industrial Inputs) 14
and sorting or grading equipment 5
Section 3 General Masses
Clause (aa) of
29(viii) Harvesting threshing and
40 sub-Section 2 of Agriculture Sector 21
storage equipment: Straw balers 5
Section 3
41 Clause (aa) of 26(ix) Disc harrow Agriculture Sector 2
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sub-Section 2 of 5
Section 3
Clause (aa) of
42 sub-Section 2 of 26(xiv) Rotary tiller Agriculture Sector 54
5
Section 3
Clause (aa) of Manufacturing
43 sub-Section 2 of 28(i)Tube wells filters or strainers (Industrial Inputs) 5
5
Section 3 General Masses
Clause (aa) of Manufacturing
44 sub-Section 2 of 26(xvi)Soil-scrapper (Industrial Inputs) 5
5
Section 3 General Masses
Clause (aa) of 29(xi) Harvesting threshing and
45 sub-Section 2 of storage equipment: Chaff or fodder Agriculture Sector 42
5
Section 3 cutter
4.1 Machinery, equipment,
materials, capital goods, specialized
vehicles (4x4 non luxury) i.e single
Clause (aa) of
or double cabin pickups,
46 sub-Section 2 of General Masses 3
accessories, spares, chemicals and 5
Section 3
consumables meant for mineral
exploration phase.- subject to
conditions given against S.No. 4 of
Clause (aa) of Manufacturing
47 sub-Section 2 of 29(xviii)Tractor mounted trancher (Industrial Inputs) 26
5
Section 3 General Masses
Clause (aa) of Manufacturing
48 sub-Section 2 of 29(xvii)Reaping machines (Industrial Inputs) 95
5
Section 3 General Masses
Clause (aa) of Manufacturing
49 sub-Section 2 of 29(xii)Chaff or fodder cutter (Industrial Inputs) 6
5
Section 3 General Masses
Clause (aa) of 28(ii) Irrigation drainage and
50 sub-Section 2 of agrochemical application Agriculture Sector 108
5
Section 3 equipment: Knapsack sprayers
Clause (aa) of 28(vi) Irrigation drainage and
51 sub-Section 2 of agrochemical application Agriculture Sector 11
5
Section 3 equipment: Orchard sprayer
Clause (aa) of Manufacturing
52 sub-Section 2 of 27(vii)Sugarcane planter (Industrial Inputs) 10
5
Section 3 General Masses
Clause (aa) of 28(v) Irrigation drainage and
53 sub-Section 2 of agrochemical application Agriculture Sector 2
5
Section 3 equipment: Self-propelled sprayers
20 Plant. Machinery and equipment
used in production of bio-diesel
Clause (aa) of
subject to conditions mentioned
54 sub-Section 2 of General Masses 174
against S.no. 20 of Table I of 8th 5
Section 3
Schedule to the Sales Tax Act,
1990
Clause (aa) of Manufacturing
55 sub-Section 2 of 4 Oilseeds meant for sowing. (Industrial Inputs) 9
5
Section 3 General Masses
Clause (aa) of Manufacturing
2 Cool chain machinery and
56 sub-Section 2 of (Industrial Inputs) 29
equipment. 5
Section 3 General Masses
Clause (aa) of Manufacturing
57 sub-Section 2 of 26(x)Bar harrow (Industrial Inputs) 1
5
Section 3 General Masses
Clause (aa) of Manufacturing
58 29(ix)Straw balers 3
sub-Section 2 of (Industrial Inputs) 5
Page | 54 - Tax Expenditure Estimates 2021Page 55
Section 3 General Masses
Clause (aa) of 26 Incinerators of disposal of waste Manufacturing
59 sub-Section 2 of management, motorized sweepers (Industrial Inputs) 4
5
Section 3 and snow ploughs General Masses
Clause (aa) of 28(iv) Irrigation drainage and
60 sub-Section 2 of agrochemical application Agriculture Sector 2
5
Section 3 equipment: Boom or field sprayers
Clause (aa) of Manufacturing
61 sub-Section 2 of 29(ii)Wheat thresher (Industrial Inputs) 10
5
Section 3 General Masses
Clause (aa) of Manufacturing
29(i)Harvesting, threshing and
62 sub-Section 2 of (Industrial Inputs) 59
storage equipment 5
Section 3 General Masses
Clause (aa) of 20 Plant, machinery, 2 [and Manufacturing
63 sub-Section 2 of equipment] used in production of (Industrial Inputs) 8
5
Section 3 biodiesel General Masses
Clause (aa) of Manufacturing
64 sub-Section 2 of 29(viii)Post hole digger (Industrial Inputs) 5
5
Section 3 General Masses
Clause (aa) of Manufacturing
65 sub-Section 2 of 26(i) Rotavator (Industrial Inputs) 37
5
Section 3 General Masses
Clause (aa) of
66 sub-Section 2 of 26(ii) Cultivator Agriculture Sector 1
5
Section 3
Clause (aa) of
29(vii) Harvesting threshing and
67 sub-Section 2 of Agriculture Sector 1
storage equipment: Post hole digger 5
Section 3
Clause (aa) of Manufacturing
27(i)Seed-cum-fertilizer drill
68 sub-Section 2 of (Industrial Inputs) 13
(wheat, rice barley, etc 5
Section 3 General Masses
Clause (aa) of Manufacturing
69 sub-Section 2 of 27(v)Rice trans planter (Industrial Inputs) 8
5
Section 3 General Masses
Clause (aa) of Manufacturing
70 sub-Section 2 of 29(xi)Wheat or rice reaper (Industrial Inputs) 13
5
Section 3 General Masses
Clause (aa) of Manufacturing
23 Secondhand and worn clothing
71 sub-Section 2 of (Industrial Inputs) 2,542
or footwear 5
Section 3 General Masses
53 The following cinematographic
equipment imported during the
period commencing on the 1st day
Clause (aa) of
of July, 2018 and ending on the
72 sub-Section 2 of General Masses 2
30th day of June, 2023. (i) 5
Section 3
Projector (ii) Parts and accessories
for projector (iii) Other instruments
and apparatus for cinema (i
Clause (aa) of Manufacturing
73 sub-Section 2 of 26(xiv)Rotary tiller (Industrial Inputs) 29
5
Section 3 General Masses
Clause (aa) of
29(xviii) Harvesting threshing and
74 sub-Section 2 of Agriculture Sector 1
storage equipment: Pruner/shears 5
Section 3
Clause (aa) of Manufacturing
29(xvi)Tractor trolley or forage
75 sub-Section 2 of (Industrial Inputs) 4
wagon 5
Section 3 General Masses
Clause (aa) of Manufacturing
76 19 Waste paper 192
sub-Section 2 of (Industrial Inputs) 5
Page | 55 - Tax Expenditure Estimates 2021Page 56
Section 3 General Masses
Clause (aa) of Manufacturing
77 sub-Section 2 of 29(x)Fodder rake (Industrial Inputs) 16
5
Section 3 General Masses
Clause (aa) of Manufacturing
78 sub-Section 2 of 26(xiii)Land leveler or land planer (Industrial Inputs) 2
5
Section 3 General Masses
Clause (aa) of Manufacturing
79 sub-Section 2 of 28(ii)Knapsack sprayers (Industrial Inputs) 7
5
Section 3 General Masses
Clause (aa) of Manufacturing
80 sub-Section 2 of 28(vi)Orchard sprayer (Industrial Inputs) 1
5
Section 3 General Masses
Sub Total 27,108
Reduced Rate of 7%
Legal Description Estimate
Sr Intended Beneficiary Rates
Reference Exemption or Concession Rs.Million
Clause (aa) of 29(xvi) Harvesting threshing and
81 sub-Section 2 of storage equipment: Reaping Agriculture Sector 36
7
Section 3 machines
Clause (aa) of
45(i) Machinery for preparing
82 sub-Section 2 of General Masses 46
feeding stuff @ 7% 7
Section 3
Clause (aa) of
45(v) Evaporative air cooling
83 sub-Section 2 of General Masses 36
system 7
Section 3
Clause (aa) of
45(ii) Incubators, brooders and
84 sub-Section 2 of Poultry Sector 287
other poultry equipment @ 7% 7
Section 3
Clause (aa) of
45(vi) Evaporative cooling pad @
85 sub-Section 2 of General Masses 23
7% 7
Section 3
Clause (aa) of Manufacturing
45(ii)Incubators, brooders and other
86 sub-Section 2 of (Industrial Inputs) 13
poultry equipment 7
Section 3 General Masses
Clause (aa) of
45(iii) Insulated sandwich panels @
87 sub-Section 2 of General masses 3
7% 7
Section 3
Clause (aa) of Manufacturing
88 sub-Section 2 of 45(vi)Evaporative cooling pad (Industrial Inputs) 5
7
Section 3 General Masses
Clause (aa) of
89 sub-Section 2 of 45(iv) Poultry sheds @ 7% Poultry Sector 2
7
Section 3
Clause (aa) of Manufacturing
45(i)Machinery for preparing
90 sub-Section 2 of (Industrial Inputs) 28
feeding stuff 7
Section 3 General Masses
Clause (aa) of Manufacturing
91 sub-Section 2 of 45(iii)Insulated sandwich panels (Industrial Inputs) 1
7
Section 3 General Masses
Clause (aa) of Manufacturing
92 sub-Section 2 of 45v Evaporative air cooling system (Industrial Inputs) 4
7
Section 3 General Masses
Clause (aa) of Manufacturing
93 sub-Section 2 of 45(iv)Poultry sheds (Industrial Inputs) 11
7
Section 3 General Masses
Page | 56 - Tax Expenditure Estimates 2021Page 57
Sub Total 496
Reduced Rate of 8%
Legal Description Estimate
Sr Intended Beneficiary Rates
Reference Exemption or Concession Rs.Million
64 Prepared Food, foodstuff and Manufacturing
Clause (aa) of
sweetmeats supplied by restaurants, (Industrial Inputs)
94 sub-Section 2 of 851
bakeries, caterers and sweetmeat General Masses / food 8
Section 3
shops items
69 Meat and similar products of Manufacturing
Clause (aa) of
prepared frozen or preserved meat (Industrial Inputs)
95 sub-Section 2 of 165
or meat offal of all types including General Masses / food 8
Section 3
poultry, meat and fish items
Manufacturing
Clause (aa) of 68 Frozen prepared preserved
(Industrial Inputs)
96 sub-Section 2 of sausages and similar products 380
General Masses / food 8
Section 3 of poultry meat or meat offal
items
Sub Total 1,396
Reduced Rate of 10%
Legal Description Estimate
Sr Intended Beneficiary Rates
Reference Exemption or Concession Rs.Million
Clause (aa) of
98 sub-Section 2 of 5 Raw Cotton and Ginned Cotton Agriculture 11,730 10
Section 3
6 Sales Tax @ 10% on The Import
Of Plant, Machinery Not
Clause (aa) of Manufactured Locally & Having
Manufacturing
99 sub-Section 2 of No Compatible Local Substitutes, 9,112 10
(Industrial Inputs)
Section 3 Subject To Conditions Given In
S.No. 6 Of Table I of 8th Schedule
To Sales Tax Act, 1990.
6 Machinery, equipment and other
capital goods meant for initial
installation, balancing,
Clause (aa) of odernization, replacement or
Manufacturing
100 sub-Section 2 of expansion of oil refining (mineral 1,411 10
(Industrial Inputs)
Section 3 oil, hydro- cracking and other value
added petroleum products),
petrochemical and petrochemical
downst
15 Ingredients of poultry feed,
cattle feed, except soybean meal of
PCT heading 2304.0000 and oil-
Clause (aa) of
cake of cotton seed falling under
101 sub-Section 2 of Agriculture 1,357 10
PCT heading 2306.1000. Besides,
Section 3
benefit of this S.No. will also be
available to following goods:-
2308.9000 (Guar Meal), 2303
Clause (aa) of Manufacturing
102 sub-Section 2 of 7 Flavored milk (Industrial Inputs) 607 10
Section 3 General Masses
Clause (aa) of Manufacturing
103 sub-Section 2 of 11 Cream (Industrial Inputs) 525 10
Section 3 General Masses
104 Clause (aa) of 10 Butter, sold in retail packing food items 10 10
Page | 57 - Tax Expenditure Estimates 2021Page 58
sub-Section 2 of under a brand name
Section 3
22 Soya bean seed on import by
Clause (aa) of solvent extraction industries, Manufacturing
97 sub-Section 2 of subject to the condition that no (Industrial Inputs) 14,664 10
Section 3 refund of input tax shall be General Masses
admissible
Clause (aa) of Manufacturing
105 sub-Section 2 of 57 Rock Phosphate (Industrial Inputs) 520 10
Section 3
5 Complete plants for relocated
industries.- subject to condition.
Clause (aa) of Manufacturing Subject to conditions given in
106 sub-Section 2 of (Industrial Inputs) 97 10 preamble of Table-2 of 8th
Section 3
Schedule to the Sales Tax Act,
1990.
1 Machinery and equipment for
development of grain handling and
Clause (aa) of storage facilities including silos - Manufacturing
107 sub-Section 2 of subject to conditions. Subject to (Industrial Inputs) 989 10
Section 3 conditions given in preamble of
Table-2 of 8th Schedule to the
Sales Tax Act, 1990.
Clause (aa) of
108 sub-Section 2 of 65 Ginned cotton Textile 88 10
Section 3
Clause (aa) of
5 Complete plants for relocated Manufacturing
109 sub-Section 2 of 264 10
industries. (Industrial Inputs)
Section 3
65 Supplies as made from retail
Clause (aa) of Manufacturing
outlets as are integrated with
110 sub-Section 2 of (Industrial Inputs) 8,224 10
Board’s computerized system for
Section 3 General Masses
real-time reporting of sales
Clause (aa) of 60 Fat filled milk If sold in retail
111 sub-Section 2 of packing under a brand name or Agriculture, Livestock 52 10
Section 3 trademark
Clause (aa) of 1 Machinery and equipment for Manufacturing
112 sub-Section 2 of development of grain handling and (Industrial Inputs) 228 10
Section 3 storage facilities 1 [including silos]. General Masses
Clause (aa) of
9 Cheese, sold in retail packing
113 sub-Section 2 of Agriculture, Livestock 9 10
under a brand name
Section 3
Clause (aa) of
58 Reduced rate of 10% on import
114 sub-Section 2 of Energy Sector 3,520 10
of LPG
Section 3
Clause (aa) of
115 sub-Section 2 of 46 Multimedia Projectors @ 10% Media Productions 5 10
Section 3
Clause (aa) of Manufacturing
116 sub-Section 2 of 8 Yogurt (Industrial Inputs) 514 10
Section 3 General Masses
Clause (aa) of Manufacturing
117 sub-Section 2 of 1 Soybean meal (Industrial Inputs) 6,597 10
Section 3 General Masses
Clause (aa) of Manufacturing
118 sub-Section 2 of LPG (Industrial Inputs) 1,886 10
Section 3 General Masses
Clause (aa) of 6 Plant and machinery not Manufacturing
119 sub-Section 2 of manufactured locally and having no (Industrial Inputs) 443 10
Section 3 compatible local substitutes General Masses
Page | 58 - Tax Expenditure Estimates 2021Page 59
Clause (aa) of Manufacturing
120 sub-Section 2 of 60 Fat filled milk (Industrial Inputs) 3,915 10
Section 3 General Masses
Clause (aa) of
11 Cream, sold in retail packing
121 sub-Section 2 of 1 10
under a brand name
Section 3
Clause (aa) of Manufacturing
122 sub-Section 2 of 57 Rock phosphate (Industrial Inputs) 1 10
Section 3 General Masses
15Ingredients of poultry feed,
Clause (aa) of cattle feed, except soya bean meal Manufacturing
123 sub-Section 2 of of PCT heading 2304.0000 and (Industrial Inputs) 842 10
Section 3 oilcake of cotton-seed falling under General Masses
PCT heading 2306.1000
Clause (aa) of Manufacturing
59 Products of milling industry
124 sub-Section 2 of (Industrial Inputs) 57 10
except wheat and meslin flour
Section 3 General Masses
Clause (aa) of Manufacturing
125 sub-Section 2 of 22 Soya bean seed (Industrial Inputs) 4 10
Section 3 General Masses
Clause (aa) of 14 Milk and cream, concentrated or Manufacturing
126 sub-Section 2 of containing added sugar or other (Industrial Inputs) 1,468 10
Section 3 sweetening matter General Masses
6 Machinery, equipment and other
capital goods meant for initial
installation, balancing,
modernization, replacement or
expansion of oil heavy chemical
Clause (aa) of Manufacturing
industry, cryogenic facility for
127 sub-Section 2 of (Industrial Inputs) 8 10
ethylene storage and handling.
Section 3 General Masses
refining (mineral oil, hydro-
cracking and other value added
petroleum products), petrochemical
and petrochemical downstream
products including fibers and
Clause (aa) of
Food Products
128 sub-Section 2 of 10 Butter 181 10
General Masses
Section 3
Clause (aa) of
Food Products
129 sub-Section 2 of 12 Desi ghee 48 10
General Masses
Section 3
Clause (aa) of
Food Products
130 sub-Section 2 of 9 Cheese 208 10
General Masses
Section 3
Clause (aa) of
Food Products
131 sub-Section 2 of 13 Whey 10 10
General Masses
Section 3
Sub Total 69,592
Reduced Rate of 12%
Legal Description Estimate
Sr Intended Beneficiary Rates
Reference Exemption or Concession Rs.Million
Clause (aa) of
Industry / General
132 sub-Section 2 of 50 LNG/RLNG 759 12
Masses
Section 3
66 Supplies as made from retail
Clause (aa) of Manufacturing
outlets as are integrated with
134 sub-Section 2 of (Industrial Inputs) 1,082 12
Board’s computerized system for
Section 3 General Masses
real-time reporting of sales
Page | 59 - Tax Expenditure Estimates 2021Page 60
Clause (aa) of
Energy Sector
133 sub-Section 2 of 51 LNG/RLNG 17,480 12
General Masses
Section 3
Sub Total 19,321
Reduced Rates under 9th Schedule
Legal Description Estimate
Sr Intended Beneficiary
Reference Exemption or Concession Rs. Million
1 9th Schedule Mobile Phones General Masses 27,096
Sub Total 27,096
Grand Total 578,456
Explanatory notes on Sales Tax Estimates
A. Types of Concessions
In sales tax act, concessions are granted broadly by three ways
I. Zero rating,
II. Exemptions,
III. Reduced rates.
1. Zero rating
Under Section 4 of the Act, goods exported, or the goods specified in the Fifth Schedule; supply of stores and
provisions for consumption aboard a conveyance proceeding to a destination outside Pakistan as specified in
section 24 of the Customs Act, 1969 (IV of 1969); such other goods, as the Federal Government may specify by
notification in the official Gazette, whenever circumstances exist to take immediate action for the purposes of
national security, natural disaster, national food security in emergency situations and implementation of bilateral
and multilateral agreements are charged to tax at the rate of zero per cent.
2. Exemptions
Under section 13 of the Sales Tax Act 1990, supply of goods or import of goods specified in the Sixth Schedule
are, subject to such conditions as may be specified by the Federal Government, are exempt from tax under the
Act. The Federal Government is empowered to issue exemptions whenever circumstances exist to take immediate
action for the purposes of national security, natural disaster, national food security in emergency situations and
implementation of bilateral and multilateral agreements, by notification in the official Gazette. Exemptions can
be on any supplies made or imports, of any goods or class of goods from the whole or any part of the tax
chargeable under the Act, subject to the conditions and limitations specified therein.
3. Reduced rates
Under section 3(2)(b), Federal Government is empowered to declare that in respect of any taxable goods, the tax
shall be charged, collected and paid in such manner and at such higher or lower rate or rates as may be specified,
subject to such conditions and restrictions as it may impose, by notification in the official Gazette.
B. Nature of exemptions and concessions
In sales tax act, concessions are granted broadly by three ways: i.e. Zero Rating, Exemptions, and reduced rates.
1. Product-based Concessions
In some cases, product based concession is granted under sales tax act, for example, in case of food and grocery
items, certain products are exempt or have reduced rate of sales tax. It may get tricky because these exemptions
Page | 60 - Tax Expenditure Estimates 2021Page 61
can then have rules within rules. Prepared foods and ready-to- eat food items may be exempted or have reduced
rate whereas the same items if sold under brand name may not have the concession.
2. Use-based Concessions
Under the Act certain products that are intended to be used for in-house consumption, for use of a specific
organization are given tax concession. Typically, this is where, the end consumers are not liable to be taxed, or
intended to be given tax concession.
3. Buyer-based Concessions
Diplomats, diplomatic missions, diplomatic organizations, non-profit organizations or government agencies often
are not required to pay sales tax. This concession in the form of zero rating or exemption is extended to these
national and international agencies.
4. Economic activity-based concessions
Certain tax concessions under the act are granted for a specific economic activity. Like export promotions or
certain activities in export processing zones. A unique case in Pakistan is the case of exemptions in erstwhile
Federally Administered Tribal Areas (FATA), where exemptions are granted for mainstreaming of the
geographic areas.
C. Suggestion for further improvement of Sales Tax estimates
The reporting and calculation of tax expenditures estimates may be improved through:
Legal Enactment
In previous estimates it was suggested that in sales tax act, concessions are granted broadly by three ways, i.e.
zero rating, exemptions, and reduced rates. The sales tax return of any registered person may not be considered as
true and valid return, without mentioning exempt supply, if any. This will help in computing the exemption
incidence when exempt supplies are made by various registered persons in supply chain.
Administrative Measures
Industry-ratios and/or standardized minimum value addition formulas may be issued, with the consultation of
major industries, to have more accurate and rational estimates, and so that exact extent of value addition in each
industry can be estimated.
Engagement of Experts and Internees
Various expert, working in the universities may be engaged to develop a broad based consultancy and
opportunities may be provided to young university graduates to apply various statistical tools on the data for
improvement in reporting and calculating tax buoyancy
Training of the Team
The team engaged in SPR&S may be trained in National and International well reputed institutes for understanding
and opting international best practices.
Summary of Customs Duty Estimates
Rs. in million
1 Chapter-99 Exemptions 12,635
2 FTA & PTA Exemptions 34,210
3 5th Schedule Exemptions & Concessions 137,418
4 General Concessions: Automobile sector, E&Ps, 55,877
Page | 61 - Tax Expenditure Estimates 2021Page 62
CPEC, etc.
5 Export Related Exemptions 47,631
Total 287,771
CD Cost of
Legal Reference Exemption Type Beneficiary Sector Exemption
FY 2019-20
Chapter-99 Exemptions
Chapter-99 Exemptions: Goods
9901.0000 - imported by various agencies of Agencies under the United Nations 188
the United Nations
Chapter-99 Exemptions: Goods
Diplomats/Embassies/ Consulates
imported by
9902.0000 - under the Diplomatic and Consular 506
Diplomats/Embassies/
Privileges Act, 1972
Consulates
Privileged personnel or by
organizations or by any person
Chapter-99 Exemptions: Goods authorized by the contracting parties,
imported by privileged personnel under grant-in- aid agreements
or by organizations or by any (including those agreements which
9903.0000 - 3,240
person authorized by the cover off budget foreign
contracting parties, under grant- contributions or funds brought by
in- aid agreements registered INGO’s without any
financial liabilities to the
Government of Pakistan)
Chapter-99 Exemptions:
Vehicles in CKD condition, Vehicles in CKD condition, imported
imported by recognized local by recognized local manufacturer for
9904.0000 - 7
manufacturer for supply to supply to diplomat, diplomatic
diplomat, diplomatic mission, mission, privileged person
privileged person
Chapter-99 Exemptions:
Dignitaries of UAE, Qatar and
9905.0000 - Imports by Dignitaries of UAE, 0
Bahrain
Qatar and Bahrain
Chapter-99 Exemptions: Goods
imported under the President/ The President and the Prime Minister
9906.0000 - Prime Minister/ Governors/ ’s of Pakistan. The Governors and the 0
Salary, Allowances and Acting Governors of the Provinces
Privileges Act, 1975
Chapter-99 Exemptions: Goods
received as gift or donation from
a foreign government or
organization by the Federal or
Gifts received by the Federal, the
Provincial Government or any
9908.0000 - provincial or any public sector -
public sector organization or
organization
Goods received as gift by
Pakistani organizations from
Church World Services or the
Catholic Relief Services
Chapter-99 Exemptions:
Articles, value of which does not
Articles, value of which does not
exceed Rs.20,000/- per parcel, if
9909.0000 - exceed Rs.20,000/- per parcel, if 7
imported through post or courier
imported through post or courier
service as unsolicited gift parcel
service as unsolicited gift parcel
Chapter-99 Exemptions:
Samples of no commercial value
9910.0000 - Samples of no commercial value 28
imported by the manufacturers
imported by manufacturers
Chapter-99 Exemptions: Relief (i) Relief goods donated for free
9911.0000 - goods donated for free distribution 737
distribution among the victims (ii) Plant, machinery and equipment
Page | 62 - Tax Expenditure Estimates 2021Page 63
of natural disaster or other imported by way of donation for
catastrophe OR Plant, machinery installation in the earthquake hit
and equipment imported by way districts as certified by
of donation for installation in the ERRA/National Disaster
earthquake hit districts Management Authority.
Chapter-99 Exemptions: Imports
9912.0000 - Imports by Edhi Foundation 23
by Edhi Foundation
Chapter-99 Exemptions: Gifts or
Gifts or donations received by a
donations received by a
9913.0000 - charitable non-profit making hospital 3,111
charitable non-profit making
or institution
hospital or institution
Chapter-99 Exemptions: Imports
Imports by Charitable Institutions
9914.0000 - by Charitable Institutions and 1,716
and Hospitals
Hospitals
Chapter-99 Exemptions: Goods
Goods imported by or donated to non
imported by or donated to non -
9915.0000 - -profit making educational and 309
profit making educational and
research institutions
research institutions
Goods supplied free of cost as
Chapter-99 Exemptions: Goods
replacement of identical goods
supplied free of cost as
9916.0000 - previously imported including goods 112
replacement of identical goods
imported within warranty period
previously imported
Replacement Goods.
Chapter-99 Exemptions: Ship Ship spares, stores and equipment
spares, stores and equipment imported for use in ships registered
9922.0000 - 45
imported for use in ships in Pakistan Temporary Import or
registered in Pakistan Export.
Chapter-99 Exemptions: Eye
9924.0000 - Eye cornea 1
cornea
Chapter-99 Exemptions:
Artificial kidneys, hemodialysis
machines, hemodialyzers, A.V.
fistula needles, hemodialysis
fluids & powder, blood tubing
tines for dialysis, reverse
osmosis plants for dialysis,
9925.0000 - Medical appliances/equipment. 543
double lumen catheter for
dialysis, catheters for renal
failure patients, peritoneal
dialysis solution and cardiac
catheters. colostomy bags and
appliances identifiable for
Ostomy use
Chapter-99 Exemptions:
Pharmaceutical raw materials if
imported for manufacture of
contraceptives in accordance Pharmaceutical raw materials if
9927.0000 - with the input output ratios imported for manufacture of 84
determined by the Directorate of contraceptives
Input Output Co-efficient
Organization. Contraceptives
and accessories thereof.
Chapter-99 Exemptions: Any Any goods, including vehicles,
goods, including vehicles, specified in the First schedule to the
specified in the First schedule to Customs Act, 1969 (IV of 1969)
the Customs Act, 1969 (IV of imported by Federal/Provincial/
1969) imported by Local Government Departments,
9930.0000 - 484
Federal/Provincial/ Local Municipal bodies and Development
Government Departments, authorities subject to the condition
Municipal bodies and that the goods are donated to the
Development authorities subject importers for use in an approved
to the condition that the goods foreign grant funded project
Page | 63 - Tax Expenditure Estimates 2021Page 64
are donated to the importers for
use in an approved foreign grant
funded project under a proper
grant relating to Capital Aid-
Technical Assistant Agreement
signed between the Government
of Pakistan and a foreign
government or agency subject to
concurrence of the Federal
Board of Revenue.
Chapter-99 Exemptions:
Ground handling equipment,
service and operation vehicles,
catering equipment and fuel
trucks not manufactured locally, Ground handling equipment
9931.0000 - 5
imported by domestic airlines or imported by airlines
by any other service company to
which a license has been issued
by the Civil Aviation Authority
for such purposes.
Chapter-99 Exemptions: Items
relating to disabled persons, like
Wheel chairs, Artificial human Certain items imported by the
9937.0000 - 226
part, Items used for Disabled persons
rehabilitation of blind persons
etc..
Chapter-99 Exemptions:
Disposables, as are not Certain Disposables, as are not
manufactured locally, for manufactured locally, for
Cardiology/cardiac surgery, Cardiology/cardiac surgery,
9938.0000 - 958
Neurovascular, Neurovascular, Electrophysiology,
Electrophysiology, Endo- Endo-surgery, Endoscopy, Oncology,
surgery, Endoscopy, Oncology, Urology, Gynecology;
Urology, Gynecology;
Chapter-99 Exemptions:
9939.0000 - Diagnostic kits for HIV and Diagnostic kits for HIV and Hepatitis 304
Hepatitis
Chapter-99 Exemptions: Goods
imported by or donated to Goods imported by or donated to
municipal authorities including municipal authorities including
development authorities , development authorities , Federal
Federal Government, Provincial Government, Provincial Government,
Government, Government of Government of Azad Jammu and
9941.0000 - Azad Jammu and Kashmir, Kashmir, Government of Gilgit- -
Government of Gilgit-Baltistan, Baltistan, National Disaster
National Disaster Management Management Authority (NDMA),
Authority (NDMA), Provincial Provincial Disaster Management
Disaster Management Authority Authority (PDMA) and Government
(PDMA) and Government Emergency/Rescue services,
Emergency/Rescue services,
Sub-Total:- Chapter-99 Exemptions 12,635
FTA & PTA Exemptions: Bilateral arrangements with different Governments /Regional commitments
FTA: General exemption on import
558(I)/2004 Table I Section 19 0
from ECO
FTA: General exemption on import
558(I)/2004 Table II Section 19 76
from SAARC
FTA: Pak-China Early Harvest
1296(I)/2005 Table-I Section 19 0
Program (prescribes FTA CD Rate)
FTA: Pak-China Early Harvest
1296(I)/2005 Table-II Section 19 Program (prescribes %age of 0
concession in CD Rate)
Page | 64 - Tax Expenditure Estimates 2021Page 65
FTA: General exemption on import
1274(I)/2006 Table-I Section 19 from SAARC countries under 394
SAFTA Agreement
FTA: General exemption on import
1274(I)/2006 Table-II Section 19 from SAARC countries under 7
SAFTA Agreement
FTA: General exemption on import
SRO 659(I)/2007 Table-I Section 19 9,323
from China under Pak-China FTA
FTA: General exemption on import
SRO 659(I)/2007 Table-II Section 19 1,876
from China under Pak-China FTA
FTA: General exemption on import
SRO 1640(I)/2019 - Section 19 13,258
from China under Pak-China FTA
PTA: General exemption on import
SRO1151(I)/2007 Table Section 19 -
from Mauritius under PTA
PTA: General exemption on import
SRO1261(I)/2007 Table I Section 19 2,299
from Malaysia under PTA
PTA: General exemption on import
SRO1261(I)/2007 Table II Section 19 873
from Malaysia under PTA
PTA: General exemption on import
SRO741(I)/2013 Table Section 19 from Indonesia under Pak-Indonesia 3,303
PTA
FTA: General exemption on import
SRO280(I)/2014 d Section 19 from Sri Lanka under Pak-Sri Lanka 375
FTA
FTA: General exemption on import
SRO280(I)/2014 I Section 19 from Sri Lanka under Pak-Sri Lanka
FTA
FTA: General exemption on import
SRO280(I)/2014 Table-I Section 19 from Sri Lanka under Pak-Sri Lanka 2,260
FTA
FTA: General exemption on import
SRO280(I)/2014 TABLE-III Section 19 from Sri Lanka under Pak-Sri Lanka 165
FTA
Sub- Total:- FTA & PTA Exemptions 34,210
5th Schedule(Customs Duty)
Imports of Plant, Machinery,
5th Schedule (Customs Duty) Exemption under 18(1A) of the Equipment and Apparatus, including
55,595
Part-I Customs Act, 1969 Capital Goods for various
industries/sectors
5th Schedule (Customs Duty)- Exemption under 18(1A) of the Import of Active Pharmaceutical
1,728
Part II Table-A Customs Act, 1969 Ingredients by pharma sector
5th Schedule (Customs Duty)- Exemption under 18(1A) of the Excipient/Chemicals by
589
Part II Table-B Customs Act, 1969 pharmaceutical sector
5th Schedule (Customs Duty)- Exemption under 18(1A) of the Drugs (mostly Life Saving) by
6,955
Part II Table-C Customs Act, 1969 pharmaceutical sector
5th Schedule (Customs Duty)- Exemption under 18(1A) of the Packing Materials/Raw Materials for
1,080
Part II Table-D Customs Act, 1969 Packing by pharmaceutical sector
5th Schedule (Customs Duty)- Exemption under 18(1A) of the Diagnostic Kits/Equipment) by
3,151
Part II Table-E Customs Act, 1969 pharmaceutical sector
5th Schedule(Customs Duty)- Exemption under 18(1A) of the
Poultry and Textile Sectors 39,227
Part III Customs Act, 1969
5th Schedule(Customs Duty)- Exemption under 18(1A) of the Machinery and Equipment for
547
Part IV Customs Act, 1969 Textile Sector
5th Schedule(Customs Duty)- Exemption under 18(1A) of the Automotive Manufacturing Sector
66
Part V Customs Act, 1969 (Auto Policy)
5th Schedule(Customs Duty)- Exemption under 18(1A) of the
Aviation Sector (Aviation Policy) 403
Part VI Customs Act, 1969
Essential edible items like pulses,
5th Schedule (Customs Duty) Exemption under 18(1A) of the
potato etc, Oil and Oil products, 7,567
Part-VII Customs Act, 1969
Inputs of export sectors etc.
Page | 65 - Tax Expenditure Estimates 2021Page 66
5th Schedule(Customs Duty)- Exemption under 18(1A) of the
Miscellaneous. 20,509
Part VIII Customs Act, 1969
Sub-Total:- 5th Schedule(Customs Duty) 137,418
Mining equipment & machinery
268(I)/2015 Section 19 2,452
imported by Thar Coal Field
Raw material of survey based
Local industries: Stationary/
Electrical Capacitors/ Pesticides /
565(I)/2006 Section 19 14,331
Distilled Faty Acids / CRC & GI
coils / Fans/ Transformers / Electric
Motors manufacturers
Auto Sector: General concession for
SRO 499(I)/2013 Section 19 434
import of Hybrid Electric Vehicles
Exploration and Production
SRO678(I)/2004 Section 19 5,024
(E&P)Companies
107(I)/2019 and Textile Sector (Local Yarn
Section 19 -
SRO 48(I)/2018 Producers): Import of Cotton
SRO 121(I)2014 Section 219 Afghan Transit Trade 7
SRO 48(I)/2018 Section 19 Import of cotton -
Imports by M/s CSCEL for Karachi-
SRO 642(I)/2016 Section 19 19
Peshawar Motorway
General: Concession of CD on
SRO 644(I)/2018 Section 19 475
import of electric motor vehicles
SRO40(I)/2017 Section 19 Lahore Orange Metro Train Project 50
SRO655(I)/2006 Section 19 Vendors of Automotive sector 13,361
SRO656(I)/2006 Section 19 OEMs of Automotive Sector 15,930
SRO235(I)/2020 Section 19 COVID-19 Exemptions - General 810
SRO318(I)/2020 Section 19 COVID-19 Exemptions - General 2,614
SRO556(I)/2020 Section 19 COVID-19 Exemptions - General 364
SRO558(I)/2020 Section 19 COVID-19 Exemptions - General 6
SRO559(I)/2020 Section 19 COVID-19 Exemptions - General -
Sub-total 55,877
Export Related Exemptions
SRO450(I)/2001 Section 219 DTRE 5,707
SRO450(I)/2001 Section 219 Manufacturing Bonds 9,976
SRO 327(I)/2008 Section 219 Export Oriented Units 15,338
SRO 492(I)/2008 Section 219 Temporary Imports 10,007
SRO 450(I)/2008/9917.0000 Section 219 EPZ (abroad) 6,603
Sub-Total:- 47,631
Grand Total: 287,771
Benchmark for Customs Duty Cost Estimation
a) Statutory rates of Customs Duty (CD), Regulatory Duty (RD), and Additional Customs Duty (ACD) have been taken as
benchmark rates. Customs related exemptions / concessions are generally sector based.
b) While making calculations, any deviation from statutory rates has been considered as exemption / concession.
c) Period of study is FY 2010, i.e. July 2019 to June 2020.
d) Report is based on figures in respect of customs duty exemptions given under chapter-99 (Rs.12,635 million). FTA/PTAs
(Rs.34,210 million), 5th Schedule to Customs Act, 1969 (Rs.137,418 million) and exemptions given under other SROs
(Rs.55,877 million) including export oriented exemption/concession SROs.
Methodology for Customs Duty Cost Estimation
Data for estimations of Customs is also taken from FBR’s official database, and estimations were calculated against statutory
rates of duties, using revenue forgone approach.
Page | 66 - Tax Expenditure Estimates 2021Page 67
VAT GAP MODEL:
USING SUPPLY-USE TABLES
1. FRAMEWORK OF VAT GAP
Definition of the VAT Gap: The VAT Gap refers to the VAT Policy Gap or the VAT Compliance Gap.
The VAT Policy Gap: The VAT Policy Gap is the difference between the Potential VAT collectible under a
benchmark or standard regime' of the VAT (where there are no exemptions, lower rates or special treatment of any
type of consumption or sector/class of taxpayers), and the Potential VAT collectible under the current regime (which
includes any special treatment of consumption or sector/class of taxpayers). The VAT Policy Gap estimates the
revenue foregone due to the current policy of the government.
The VAT Compliance Gap: The VAT Compliance Gap is the difference between this Potential VAT collectible
under the current regime and the Actual VAT collection. The VAT Compliance Gap estimates the gap in VAT due
to non-compliance by taxpayers.
This study estimates VAT Policy GAP for the year 2021.
2. BACKGROUND ON VAT-GAP
Efficient collection of taxes is considered as a cornerstone of a good tax system. However, because of non-
compliance and other VAT foregone this efficiency may not be achieved. Therefore, it creates a Gap between
potential VAT and actually collected VAT. Given tax base, if taxes remain unpaid, would cause burden on those
who are contributing in this regards. Which is unfair and creates distortions in the economy. Further these unpaid
VAT would put burden on the overall public finances resulting in either curtailing the government expenditures or
increase the debt burden. Both of which are detrimental for growth and development goals of the government.
Despite healthy revenue growth especially by FBR (for the period 2001-2020 average growth is 13.9%), Pakistan’s
overall revenue collection has been low when compared to the expenditure outlays.
One of the core reason for these under or low payment in relation to the base is because of Tax Expenditures1. These
are normally reported2 and Governments throughout the world use tax expenditures as an alternative policy option to
achieve social objectives and promote economic growth. Tax expenditures as a percentage of the total tax collected
(income, sales, FED, and customs) have been increasing over time. In Tax Expenditure Report 2020, based on data
pertaining to Financial Year 2018-19, it has increased to an estimated Rs. 1,150 billion in which Tax expenditure for
Sales Tax amounted the highest at Rs. 518.8 billion (45% of the total), and in Customs Rs. 253.1 billion (22%). In
FY 2018-19, FBR’s tax collection was Rs. 3,828 billion. Overall, tax expenditure to GDP ratio stands at around 3%.
Understanding the scale and the scope of VAT policy gap and evaluating cost and benefit analysis is prerequisite for
fiscal governance especially for high deficit countries like Pakistan. One of the suitable approaches to measure the
VAT Gap is Top-down approach. In the present analysis only “VAT-GAP” model estimation is done using Supply
Use Tables. Sales Tax is currently single largest tax revenue source for FBR. In FY 2019-20 it amounted to 1,597
1 A tax expenditure is a deviation from a defined “benchmark” tax structure. A benchmark is a reference tax
system that defines what ought to be taxed in the normal course, when there are no deviations.
2 Amongst the G20 countries, 17 provide public estimates of tax expenditures (Hutton Eric, 2017). In Pakistan also
under the PFM Act-2019 a detailed report was published for FY2019-20 by FBR and presented along with budget
FY2020-21 in parliament. Whereas overall estimates have been published in Economic Survey, Ministry of Finance
since 2008.
Page | 67 - Tax Expenditure Estimates 2021Page 68
Billion Rs. which is approximately 40% of the total tax collected by FBR. For Sales Tax (Domestic) the base is
considered to be Large Scale Manufacturing (LSM) and for Sales Tax (Imports) the base is imports.
The assessment of VAT gap analysis provides a tool to tax administrators, policy makers and relevant stakeholders,
which can be roped through policy choices.
3. METHODOLOGY
We use a detailed input-output model of Pakistan’s economy to estimate the potential VAT form domestic sales.
This supply-use table provide information on the final consumption as well as the production and use of goods and
services in the economy. Not only does the model provide information on total use or gross sales for each of the 40
sectors in the supply-use table but it also provides crucial information on the intermediate and value of primary use,
the value of import and exports, and the value of investment expenditures. In other words, the Input-output model
provides the necessary information to the model ‘Pakistan’s potential sales tax base’, including the taxable supplies,
input credits, and refunds on exports. The most recent Input-output model for Pakistan’s economy is for 20173. We
re-benchmark this model to reflect the level of Pakistan’s economy by sectors values for 2020, using national
accounts data. The accuracy of our VAT gap estimates suffer significantly because the I-O model does not fully
capture the informal sector.
4. ANALYSIS
4.1 Consumption Approach
The supply-use table provides information on the final consumption of consumer, government, exporters. The final
consumption of commodities includes the VAT in the value. We eliminate the VAT from consumption at
commodity level first, then we apply the Commodity VAT rate to calculate the potential VAT Policy Gap using the
Supply-Use table.
The VAT Policy Gap is the difference between the Potential VAT collectible under a benchmark of the VAT (where
there are no exemptions, lower rates or special treatment of any type of consumption or sector/class of taxpayers),
and the Potential VAT collectible under the current regime (which includes any special treatment of consumption or
sector/class of taxpayers).
𝑷𝒐𝒕𝒆𝒏𝒕𝒊𝒂𝒍 𝑷𝒐𝒍𝒊𝒄𝒚 𝑽𝑨𝑻 𝑮𝑨𝑷
= (𝑭𝒊𝒏𝒂𝒍 𝑪𝒐𝒏𝒔𝒖𝒎𝒑𝒕𝒊𝒐𝒏-𝑽𝑨𝑻) × 𝝉-∑((𝑭𝒊𝒏𝒂𝒍 𝑪𝒐𝒏𝒔𝒖𝒎𝒑𝒕𝒊𝒐𝒏𝒄 -𝑽𝑨𝑻𝒄) × 𝝉𝒄
𝒄
Table 1: VAT Collected upto June 2020
VAT Collected VAT Collected
(Rs. Million) ($ billion4)
ST(Imports) 876,352 5.84
ST(Domestic) 720,532 4.81
Total ST 1,689,477 10.65
3 Constructed by Asian Development Bank (ADB)
4 Average exchange rate in 2020=150
Page | 68 - Tax Expenditure Estimates 2021Page 69
FED (Imports) 9,518 0.06
FED (Domestic) 240,956 1.61
Total FED 250,474 1.67
Customs 626,612 4.18
VAT Collected 2,473,970 16.50
Table 2: Supply-Use Tables: Potential VAT GAP calculated using Consumption Approach
Sales Tax VAT Under VAT Gap VAT Gap
Current Regime
($Billion) ($Billion) (% of Actual VAT
($Billion) Collected)
VAT Policy GAP 25.7 22.21 3.5 21.0
• The estimates suggest VAT policy gap is about $ 3.5 billion which is approximately 21 percent of Actual
VAT collected upto 2020.
4.2 Value Added Approach
To understand the methodology used to estimate the VAT gap, it is necessary to review some GDP accounting
identities. There are three approaches to estimate the GDP, the income approach, expenditure approach, and the
production approach or value added approach. As Input-output table uses both the expenditures approach
(horizontally along the row of the model) and the model value added approach (vertically along the columns of the
model) to GDP accounting.
The following GDP identities are
𝐺𝐷𝑃= 𝐶+ 𝐼+ 𝐺+ 𝑋-𝑀= ∑𝑉𝑎𝑙𝑢𝑒_𝐴𝑑𝑑𝑒𝑑𝑐= ∑(𝑇𝑜𝑡𝑎𝑙_𝑢𝑠𝑒-𝑉𝑎𝑙𝑢𝑒_𝐴𝑑𝑑𝑒𝑑)𝑐 (1)
Where C is the final consumption expenditures. I is the gross investment expenditures, G is the government
purchases of goods and services, X is the value of exports and M is the value of imports
The subscripts c stands for the commodities (sectors)
We can obtain an expression for the sales tax base by solving the left-hnad-side of (1) for final consumption (C),
which yields the following expression
Sales tax base=GDP+M-I-G-X (2)
Substituting (2) into the right-hand-side (1), we obtain an equivalent expression for the sales tax base.
Sales tax base= (∑𝑉𝑎𝑙𝑢𝑒𝐴𝑑𝑑𝑒𝑑𝑖+ 𝑀𝑖-𝐼𝑖-𝑋𝑖) -𝐺 (3)
Multiplying (3) by the sales tax rate (𝜏𝑖) and re-arranging the resulting expression, we obtain the following
definition
𝑃𝑜𝑡𝑒𝑛𝑡𝑖𝑎𝑙 𝑉𝐴𝑇𝑐= (∑𝜏𝑐× (𝑇𝑜𝑡𝑎𝑙 𝑈𝑠𝑒𝑐+ 𝑀𝑖-𝐼𝑖-𝑋𝑐-𝐺𝑐)) (4)
Page | 69 - Tax Expenditure Estimates 2021Page 70
𝑃𝑜𝑡𝑒𝑛𝑡𝑖𝑎𝑙 𝑉𝐴𝑇 𝑃𝑜𝑙𝑖𝑐𝑦 𝐺𝑎𝑝= (∑(𝑇𝑜𝑡𝑎𝑙 𝑈𝑠𝑒 + 𝑀𝑖-𝐼𝑖-𝑋𝑐-𝐺𝑐)) × 𝝉
𝑐
-(∑𝜏𝑐× (𝑇𝑜𝑡𝑎𝑙 𝑈𝑠𝑒𝑐+ 𝑀𝑖-𝐼𝑖-𝑋𝑐-𝐺𝑐) (5)
The equation (5) provides operational definitions that are useful for estimating VAT Policy GAP.
Table 3: Supply-Use Tables: Potential VAT GAP calculated using Value Added Approach
Sales Tax VAT under VAT Gap VAT Gap
current Regime
($Billion) ($Billion) (% of Actual
($Billion) VAT Collected)
VAT Policy GAP 26.1 22.3 3.8 23.0
• Using the value added approach, the estimates suggest gap is about $ 3.8 billion which is approximately 23
percent of VAT under current regime. This gap close to the VAT policy gap measured by the consumption
approach.
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