FBR deputes surveillance staff at Sindh’s sugar mills

KARACHI: The Federal Board of Revenue (FBR) has deputed its officials at sugar mills as a stopgap measure until it develops a real-time video links with crushing and production processes, sources said on Friday.

Sources in the Large Taxpayers Office (LTO) Karachi said the tax office posted officials at all 29 sugar mills under its jurisdiction.

The officials will remain posted till the installation of video analytics system (VAS) at sugar mills. The FBR set January 1, 2021 as the deadline for them to install VAS, according to the sources.

In September, the FBR introduced video analytics rules for electronic monitoring of production of specified goods through a statutory regulatory order. The following month, Pakistan Sugar Mills Association (PSMA) signed a memorandum of understanding for the implementation of video analytics rules. Video analytics technology has been introduced to receive data of production from the manufacturing sites and use it for tax collection purposes.

The sources said, the senior officers including FBR members and chief commissioners of Inland Revenue were asked to pay surprise visits at sugar mills for random inspection of the production process from December 5.

The officers will also check the progress of tax officials, who are posted at sugar mills.

The sources said the process has been initiated after misreporting of sales in the sugar sector. The suppression of sales by sugar mills has already incurred huge revenue losses, they said.

The sources said the FBR communicated timelines to tax offices for implementation of VAS for monitoring of production by sugar mills.

The tax offices were directed application of VAS on all shooters/production lines should be ensured and the same should be reported to the FBR. In this regard LTO Karachi will hold a meeting with all the vendors of VAS on December 7.

The FBR authorized seven vendors for VAS and the list has also been shared with PSMA.

The revenue body directed the PSMA to provide mills wise updated VAS deployment status of all sugar mills by November 26.

“However, only 10 sugar mills have invited quotations from the pre-qualified vendors, which is very disappointing,” the FBR said.

The video analytics rules laid down responsibility of the sugar manufacturers to allow free access of production facilities for installation of the system to vendors and the FBR.

The sources said the FBR would take penal action against sugar mills which fail to comply with installation of VAS by due date. The penal action may include sealing the sugar mills, the sources added.