Sales Tax Rate Decreased on Takeaway Restaurant Items

The Federal Board of Revenue (FBR) 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 Propakistani 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. ALSO READ FBR Planning to Raid Real-Estate Businesses from Next Week to Ensure Compliance The FBR has issued a notification here on Tuesday to reduce sales tax on takeaways from restaurants within the jurisdiction of the federal capital territory. According to the notification, 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.