Friday April 12, 2024

FBR keeping surveillance of sugar mills production

By Mehtab Haider
February 13, 2020

ISLAMABAD: The Federal Board of Revenue (FBR) has been continuously keeping surveillance on all sugar units in order to gauge their real production.

The FBR has invoked Section 40B of Sales Tax Act 1990 that allows deputing its staff on the premises of mills. “So far the FBR sent out tax notices to two mills located in Sindh on basis of alleged tax evasion,” official sources confirmed to The News here on Wednesday.

In the aftermath of surfacing of sugar crisis, the FBR in collaboration with Punjab Information Technology Board (PITB) devised special Apps for gauging the production and stock position on daily basis through deputing officers of Inland Revenue Service (IRS).

A few days back, some confusion surfaced related to stocks of the sugar available in Punjab and other parts of the country and finally it proved that the data available with the FBR found correct one.

“After conducting surveillance of all sugar mills, the FBR sent out tax notices to two sugar mills located in Sindh,” one top official confirmed while talking to The News here on Wednesday.

The FBR has prescribed sugar per kilo at Rs60 for the purpose of deducting GST so the price of sugar should stand at Rs70 per kg in the market. However, the retail price of sweetener stood in the range of Rs80 to Rs85 per kg at the retail stage. Earlier, the ECC had rejected the summary for allowing import of sugar in its meeting held on last Monday under chairmanship of Adviser to PM on Finance Dr Abdul Hafeez Shaikh on the pretext of sufficient stocks available in the country but the federal cabinet on Tuesday reversed this decision under PM Imran Khan and allowed the private sector to import the sweetener.

The federal cabinet after heated debate allowed the private sector to import sugar in order to avoid giving opportunity to milers to exploit the situation by further hiking the prices. Amid the government’s claims that the sugar stocks were sufficient in the country, the price of sugar witnessed increasing trends and touched the level of Rs80 to Rs85 per kg in the domestic market. Now the government allowed import of sugar without duty and taxes and its landed cost at Karachi would be standing at Rs62 per kg.

According to FBR data, the sugar stocks stood in the range of 1.9 to 2 million tons and it could meet the requirements of the country.

Under Section 40B of Sales Tax Act 1990, subject to such conditions and restrictions as deemed fit to impose, the Board, or chief commissioner may post officer of Inland Revenue on the premises of registered person or class of such persons to monitor production, sale of taxable goods and the stock position: Provided that if a commissioner, on the basis of material evidence, has reason to believe that a registered person is involved in evasion of sales tax or tax fraud, he may, by recording the reason in writing, post an 6 (Inland Revenue] on the premises of such registered person to monitor production or sale of taxable goods and the stocks position).

Explanation: For the removal of doubt, it is declared that the powers of the Board, chief commissioner and commissioner under this section are independent of the provisions of Section 40.

Under Section 40C, monitoring or tracking by electronic or other means. -- (1) Subject to such conditions, restrictions, and procedures, as it may being fit to impose or specified, the Board may, by notification in the official gazette, specify any registered person or class of registered persons or any good or class of goods in respect of which monitoring or tracking of production, sales, clearances, stocks or any other related activity may be implemented through electronic or other means as may be prescribed (2) From such date as may be prescribed by the Board, no taxable goods shall be removed or sold by the manufacturer or any other person without affixing tax stamp, bandrole stickers, labels, (barcodes,) etc. in any such form, style and manner as may be prescribed by the Board in this behalf.

(3) Such tax stamps, banderols, stickers, labels, barcodes etc., shall be acquired by the registered person referred to in sub-section (2) from a licensee appointed by the Board for the purpose, against price approved by the Board, which shall include the cost of equipment installed by such licensee on the premises of the said registered person.