NBR exempts Covid-19 vaccination activities from VAT
The order will only apply to the provision of vaccines at the government level.
The National Board of Revenue (NBR) has exempted all activities of the Covid-19 vaccination programme from value added tax (VAT). These activities include storage, marketing, transportation, and distribution of the vaccine after importing it.
The VAT wing of the NBR has issued a Statutory Regulatory Order (SRO) in this regard on Wednesday.
However, the order will only apply to the provision of vaccines at the government level, the SRO said.
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The SRO also directed the importers to submit the account statement to the NBR within 10 days of importing the vaccine.
Generally, 5-15% VAT is applicable on such activities. However, the VAT and Supplementary Duty Act provides for VAT exemption on the import and sale of all life-saving drugs.
Earlier, the NBR had issued another notification on 16 February this year waiving 5% advance tax on importing Covid-19 vaccines.
Generally, in case of importing any product, 5% advance tax has to be paid at the import stage. The importer can then adjust it with the annual income tax return.
But, importers do not have to pay advance tax for importing Covid-19 vaccines. There is no VAT or import duty for the vaccine as it is a life saving medicine.
Apart from this, there is no duty on import of personal protective equipment, masks, hand sanitisers, face shields and other personal protective items that help comply with hygiene rules. There is even no duty on importing raw materials to make these protective equipment.
The country first started importing the Covishield vaccine from India in January this year. So far 70 lakh doses of vaccine have arrived in the country. Of this, 20 lakh doses of vaccine were received as a gift from India.
