Budget FY26: Advance tax on petroleum products cut; no VAT on cotton produced from jhut
Women entrepreneurs can have a sigh of relief too, as VAT exemption has been introduced on the rent of space and establishments used by women entrepreneurs for operating beauty parlours
The National Board of Revenue (NBR) has cut the advance tax on the import of refined petroleum products from 7.5% to 2% while VAT has been exempted at the production stage of cotton produced through recycling of garment waste (jhut).
The moves came along with a series of tax reforms and adjustments in the national budget for FY2025-26, which was approved by the Advisory Council today (22 June), with major changes to income tax, VAT, and customs duties.
A press release issued by the finance ministry today confirmed the developments.
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Women entrepreneurs can have a sigh of relief too, as VAT exemption has been introduced on the rent of space and establishments used by women entrepreneurs for operating beauty parlours.
In a move to implement invoice-based customs valuation instead of tariff-based valuation, the import duty on crude petroleum has been reduced from 5% to 3%, while the rate for other petroleum products has been lowered from 10% to 6%, according to a press release issued by the finance ministry today.
To promote renewable energy, the import duty on solar inverters has been slashed from 10% to just 1%.
An additional 10 items have been added to the list of medical instruments and supplies that hospitals can import under concessional terms, making healthcare services more accessible to the public, the release said.
Besides, it added, to promote domestic production of high-quality tires, the import duty on Technically Specified Natural Rubber has been reduced from 10% to 5%.
