LAHORE: Representatives of the Pakistan Solar Association (PSA) held a press conference here at the Lahore Chamber of Commerce and Industry (LCCI) on Friday against a 17% sales tax levied on the import of solar panels and demanded an immediate withdrawal.
PSA representatives informed the media that the government had earlier announced that the proposed tax on solar devices had been dropped. However, on January 17, 2022, importers, upon submitting Import Goods Declarations (GD) to the Federal Board of Revenue (FBR), learned that the sales tax exemption on solar appliances had been deleted.
LCCI President Mian Noman Kabir said on the occasion that the imposition of a 17% tax on solar-powered devices would undermine efforts to promote alternative energy sources in the country.
However, speaking on condition of anonymity, a Federal Board of Revenue (FBR) official revealed that in addition to the 17% general sales tax, importers will also have to pay other taxes on import of solar panels.
“In the case of solar panels only, the importer will now have to pay 16% customs duty, 17% sales tax, 3% additional sales tax, 11% income tax and 4% duty. additional customs upon landing. Harbor. Additionally, if importation takes place at Karachi port, 1.5% Sindh excise duty will also apply. Previously, the solar industry did not pay such taxes,” he said.
On the other hand, the former President of the Pakistan Solar Association (PSA), Nouman Khan, speaking to profit stated that previously no GST was applied on the importation of solar panels and therefore invoices issued to customers were also zero-rated.
According to Nouman Khan, the 17% sales tax on solar panels will now be passed on to consumers while other taxes and duties will increase the cost of solar panels, making them more expensive.
“Similarly, we used to pay income tax a year later, but now we have to pay income tax in advance. Obviously, the solar import tax rate will now be around 51% [if you include all taxes] and solar panel prices will increase by more than 51%,” he said.
However, for now, the price of solar panels in the market has not increased as various chambers and associations intend to hold protests in this regard and are also trying to negotiate with the government,” he said.
According to Khans calculations, if an importer imports 1 million rupees worth of solar products, a tax rate of 51% would raise the cost to more than 1.5 million rupees before the importer even takes into account his own profit margin.