15% VAT on metro rail tickets from next July

News desk:  Value added tax (Musak) or VAT is being imposed on metro rail tickets at the rate of 15 percent from next July. As a result, passengers will have to pay extra from July. On Thursday (April 04) this instruction for withdrawal of VAT was issued by the National Board of Revenue (NBR) Moosak Laws and Rules Branch.

As per the current VAT Act, any air-conditioned railway ticket is subject to 15 percent VAT. But there is currently a VAT exemption on metro rail tickets due to an application by the metro rail authority, which will last till June 30.

According to the guidance of NBR's VAT Department, according to the government's vision-2041, various development activities are underway in the country with the goal of becoming a developed country. For that, the government has to constantly provide money, which is mainly collected through direct and indirect taxes. Tax exemptions are given from time to time in various fields with the aim of developing domestic industries, increasing production capacity of import substitute products, development of small and cottage industries etc. In addition to continuing the provision of funds for the massive development activities, the exemptions provided are being withdrawn gradually, taking into account the capacity of various sectors with the aim of increasing the country's LDC transition and raising the tax-GDP ratio to the desired level. That is, the area of ​​exemption is being narrowed.

In view of this reality, the National Board of Revenue has ruled out re-exempting the tax on Metrorail services from December 28, 2022 to June 30, 2024, after the expiry of the period.

Through this directive of the National Board of Revenue (NBR), VAT will be effective at the rate of 15 percent on the sale of Metrorail tickets from next July.

 

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