ISLAMABAD – The Federal Board of Revenue (FBR) has increased sales tax rate on supply of food stuff by restaurants, bakeries, caterers and sweetmeats shops to 17 percent.
The FBR on Thursday issued Circular No. 07 of 2022 to explain amendment introduced in the Sales Tax Act, 1990, through Finance (Supplementary) Act, 2022.
Earlier, the tax body was receiving 7.5% tax on food, food stuff and sweetmeats supplied by restaurants, bakeries, caterers and sweetmeats shops.
“Through Finance (Supplementary) Act, 2022, serial No. 64 of Eighth Schedule of Sales Tax Act, 1990 has been omitted; now these products shall be chargeable to tax at 17 per cent under the VAT regime,” read the notification.
The FBR further explained that services mentioned under Serial No. 1 of the Schedule to ICT Service Ordinance, 2001 by hotels, motels, guest houses, marriage halls and lawns (by whatever name called) including ‘pandal’ and ‘shamiana’ services, clubs including race clubs, and caterers shall continue to be chargeable to tax at 16 per cent, local media reported.
