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Value-added tax at the rate of 15 per cent will be applicable on fees and charges collected against various export-import permits and clearance certificates mainly issued by the Plant Quarantine Wing of the Department of Agricultural Extension under the agricultural ministry.
The National Board of Revenue has recently conveyed the decision to the DAE after the department sought clarifications on the applicability of VAT on the fees and charges.
The DAE and its wings, including the Plant Quarantine Wing, has also suggested that stakeholders, including importers and exporters, should pay the VAT along with the fees and charges for the permits and certificates.
The PQW collects the fees and charges as non-tax revenue for issuing import permits, release orders, phyto-sanitary certificates for export and fumigation service for plants and plant products.
The wing collects fees and charges against around 40 types of services.
Agricultural ministry officials said that the agencies had not collected VAT on the fees as they considered them to be non-tax revenue.
The finance ministry’s 2013 circular on non-tax revenue did also not mention anything regarding collection of VAT on non-tax revenue.
They said that the agricultural ministry, the DAE and other agencies had been seeking clarifications on the applicability of imposing VAT on the sector after the audit department raised an objection against noncollection of VAT from the services.
Following the clarifications issued by the NBR’s VAT wing, the concerned offices have asked the stakeholders to pay VAT on the fees from February 1, they added.
Officials of the revenue board said that VAT on the fees would be applicable as per the VAT law.
Other similar fees such as passport fee were also not exempted from the tax, they said.
