Sales Tax Fifth Schedule – Zero-rated supplies
Supplies taxed at 0%. No output tax is charged, but the input tax paid on purchases can be claimed back.
Who it applies to
Exporters, and suppliers of the goods and supplies listed in the Schedule
Rates and limits
| Item | Rate / rule |
|---|---|
| Output tax | 0% |
| Input tax | Adjustable, and refundable where it exceeds output tax (s.10) |
| Typical cases | Exports, supplies to diplomats and privileged persons, duty-free shops, and listed goods and inputs |
| Conditions | Proof of export (goods declaration, bank proceeds) and the Schedule's conditions |
How it works in practice
Zero-rating is better than exemption because you keep the input tax credit. Refunds are claimed with the monthly return and processed through FBR's refund system once the export and payment evidence matches.