The Federal Board of Revenue (FBR) has decided to allow tax exemption to industries located in erstwhile FATA/PATA on the basis of quota determined against installed capacity. According to a media report, an important meeting was held at FBR headquarters on Friday last wherein Chairman FBR Dr Muhammad Ashfaq Ahmed reviewed progress regarding determination of quota for import of raw material on the basis of installed capacity for the industrial units located in erstwhile FATA/PATA. The participants of meeting were informed that out of total 140 units of steel , oil and ghee, plastics and textile etc. in erstwhile FATA/ PATA identified for joint survey for determination of manufacturing capacity, reports about 58 units have been sent to the FBR, while reports of 20 more units were in the pipeline. The director general IOCO stated that the survey and reports on the remaining units will be completed in a couple of weeks. Chairman FBR directed that exercise/survey to determine the installed capacity needed to be completed by April 15, 2022 positively. It was also decided that exemptions under Sixth Schedule of Sales Tax Act, 1990 and Income Tax Ordinance, 2001 will not be available to industrial units beyond their quota determined on the basis of their installed capacity after April 15, 2022. It was reported that some industrial units were delaying the exercise on frivolous grounds. However, such units will not be allotted any quota to import raw materials after completion of the exercise. The chairman FBR reiterated that the business community should play its positive role to complete this survey so that misuse of exemption of taxes in these areas could be discouraged and thus a level playing field may be ensured to industries located in all parts of the country. It is pertinent to mention that at the time of merger of erstwhile Federally Administered Tribal Areas/Provincially Administered Tribal Areas in Khyber Pakhtunkhwa in 2018, tax exemptions had been granted to these areas for 5 years up to June 30, 2023. Currently several industrial units located in these areas are manufacturing different goods including Iron & Steel, Plastic, Ghee, Textile, Plastic etc. These units import raw material through sea port at Karachi without payment of Sales Tax and Income Tax. However, these units are required to sell the finished goods only in the newly merged Districts of erstwhile FATA/PATA and not in the tariff areas/other Districts of the Province or in other Provinces. To frustrate and prevent the misuse of the facility of exemption of taxes on the import of raw materials by these units, different measures are being taken by FBR including escort of containers from Azakhail Dryport to the location of the concerned unit. The meeting was attended by Member IR Operations, Member IR Policy, Member Customs Policy, Director General Input Output Coefficient Organization (IOCO), Chief Commissioner Peshawar, Chief Collector Khyber Pakhtunkhwa, concerned Collector Customs, Commissioner IR, Director IOCO and other senior officers of FBR.