FBR Issues Clarification on Re-Sale of Used Vehicles

Federal Board of Revenue (FBR) has issued clarification on the news appearing in print and electronic media regarding levying of 17 percent Sales tax on resale of used and refurbished vehicles. FBR has clarified that the existing law charged sales tax on full sale value which was harsh and excessive. On the request of business community who are engaged in such business and after seeking support of major chambers of commerce of the country, a clause was added in the Finance Act to provide relief and to encourage refurbishing of second hand vehicles. This relief is available to only registered persons in Sales Tax and is restricted to 17% of value addition made by such players. No unregistered person can deduct or demand such sales tax from a buyer. It is further clarified that only rules have been finalized now.