Reformed GST postponed to Nov 1

The Federal Government has decided to postpone the introduction of Reformed General Sales Tax by a month.

ISLAMABAD: The Federal Government has decided to postpone the introduction of Reformed General Sales Tax (RGST) by a month to November 1, 2010.

To ensure the introduction of RGST by November 1st, the centre and provinces have decided, at the end of a two day meeting, to complete the legislative process before the deadline, according to a senior official from the Ministry of Finance. However, the exemptions in the current general sales tax regime are expected to be withdrawn during October.  The International Monetary Fund (IMF) is willing to grant exceptions to the timeline if the RGST is introduced through legislation, given that the process is started and the exemptions are withdrawn in the first phase, added the sources.

With the agreement reached between the centre and provinces on the formula for distribution of revenues, the basic condition of IMF has been fulfilled. The centre will provide 36.01 per cent of its own resources to the provinces while the rate of the RGST is expected to be between 17 and 17.5 per cent, with a base rate of 15 per cent and a provisional 2.5 per cent for flood victims’ rehabilitation.

Published in The Express Tribune, September 30^th, 2010.