Sales tax decreased on Takeaway Restaurant Items

 Sales tax decreased on Takeaway Restaurant Items

Federal Board of Revenue

Islamabad, 09 June: The Federal Board of Revenue has reduced sales tax from 7.5 percent to 5 percent, without the facility of input tax adjustment, on supplies made by restaurants and eateries on account of takeaway up to June 30, 2021.

A tax expert told to media that the FBR has reduced sales tax rates on takeaways from restaurants from 7.5 percent to 5 percent, however, input tax adjustment allowed earlier has been taken away.

The withdrawal of the facility of the input tax adjustment on utilities etc. would have a serious impact on restaurants despite the reduction in the rate of sales tax.

The Federal Board of Revenue has issued a notification to reduce sales tax on takeaways from restaurants within the jurisdiction of the federal capital territory.

According to the notification issued, in the exercise of the powers conferred by clause (a) of sub-section (2) of section 13 of the Sales Tax Act, 1990, the Federal Government is pleased to exempt sales tax in excess of five percent chargeable on supplies made by restaurants and eateries on account of takeaway subject to the conditions that no input tax shall be adjusted.This notification shall remain in force up to June 30, 2021, it added.

Read more: Big tech supports global tax, but wants digital services levies axed

On the other hand, United States tech giants could benefit from the agreement of the Group of Seven(G7) rich countries’ agreement to create a global minimum 15% corporate tax rate if the final deal also scraps increasingly popular digital services taxes, according to industry lobbyists.

The deal, reached Saturday, was designed to reduce companies’ incentives to shift profits to low-tax offshore havens and could bring hundreds of billions of dollars into government coffers.

Web Desk

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