FBR removes polyurethane from sales tax refund negative list

The Federal Board of Revenue has removed polyurethane, an input it describes as an integral raw material for leather goods, from the negative list that governs sales tax refunds for manufacturers in five export-oriented sectors, a change that widens refund eligibility for leather goods producers.

The amendment was made through Sales Tax General Order (STGO) No. 24 of 2026, which partially modifies STGO No. 09 of 2023 dated March 15, 2023. Under the new order, the FBR has excluded the item falling under HS Code 3909, which appeared at serial number 292 of the negative list annexed to the 2023 order.

The refund mechanism affected by the change covers manufacturers of textile, carpet, leather, surgical and sports goods. The FBR said the item was being removed from the negative list because it forms an integral part of the raw material used in leather goods.

With the exclusion, the restriction that applied to the item under STGO No. 09 of 2023 has been withdrawn, subject to the other conditions of the sales tax refund regime. The FBR said the amendment takes effect immediately, and it effectively provides relief to manufacturers of leather goods by removing the specified raw material from the negative list.