ISLAMABAD (Lord Media): The government has imposed a minimum one percent value addition tax on imported coal, along with specific conditions. The Federal Board of Revenue’s Inland Revenue (Policy Wing) has issued Sales Tax General Order No. 9/2026, effective immediately. This applies to coal imported under Chapter 27 of the Pakistan Customs Tariff, which is supplied directly to coal-fired independent power producers.
According to the general order, this facility is only available to importers registered under the Sales Tax Act 1990. At the time of import, customs officials must be provided with purchase orders, supply agreements, contracts, or other relevant documents to verify that the imported coal will be supplied directly to the relevant coal-fired IPP.
Importers are required to maintain complete records of imports and direct supplies, presenting them to the Commissioner Inland Revenue or Collector Customs if needed. They must also comply with audit and verification processes under sales tax laws.
The Collector Customs can grant clearance under the one percent minimum value addition tax based on the documents provided by the importer. However, post-clearance audits or verification of compliance with conditions can be conducted with the assistance of Inland Revenue authorities.
If it is proven that the imported coal was supplied to an entity other than a coal-fired independent power producer, or was not imported for direct supply, the importer will be liable to pay the outstanding value addition tax along with default surcharge and penalties as per law.
