KARACHI: The Federal Board of Revenue (FBR) has directed its officials to properly implement the revenue measures of revised sales tax and federal excise duty (FED) which have been taken in budget 2014-2015.
According to a notification issued on Thursday, the concerned Regional Tax Officials (RTOs) and Large Taxpayers Units (LTUs) have been directed to inform the electricity distribution companies including M/s K-Electric Limited to charge sales tax at Rs 7 per unit from steel melters and re-rollers however, the commissioners have been given the authority as well to collect the sales tax from steel re-melters and re-rollers wherever expedient in the interest of revenue.
The FBR instructed the RTOs and LTUs to obtain options from steel melters/re-rollers for payment of sales tax on ad valorem basis. It said that list of all such optees may be furnished to the board by July 15, 2014.
Customs authorities will have to ensure collection of sales tax from ship-breakers and re-meltable scrap at revised rate of Rs 6,700 per MT and Rs 5,600 per MT respectively.
The FBR directed the Director WeBOC for creating facility in the system for auto-intimation of sales tax adjustment which should be allowed to manufacturers steel melters.
The RTOs and LTUs officials will have to obtain information regarding installer transformer capacity used for operating each unit and installation of temper-proof electricity meters, as per newly inserted rule such units (steel melting and re-rolling units which have been set up by sugar mills and other persons, consuming self-generated electricity) will have to pay sales tax in the normal sales tax regime at standard rate.
The FBR has given instruction to the all concerned LTUs and RTOs to ensure the revised rate of FED on cigarettes supplies which was imposed through an SRO from July 4, 2014.
The FBR directed the customs officials to charge sales tax at standard rate of 17 percent on all imports of finished articles of leather and textiles however; used and worn clothing is remained chargeable to sales tax at five percent.
All concerned RTOs and LTUs have been ordered by the FBR to conduct stock taking and properly monitor the production and sales of aerated waters manufacturers as they are reverted to the normal tax regime in budget 2014-2015, where FED is chargeable on beverages concentrate at 50 percent of its value, and FED at nine percent and sales tax at 17 percent on aerated waters. It also added that the available information regarding production capacity and major input materials should be used as benchmark to prevent under-reporting of production and sales suppression.
The RTOs and LTUs to ensure the retail prices of cement as FED has been converted from specific rate of Rs 400 per MT to five percent of the retail price, which are printed on cement bags, and the officials are directed to properly charge FED on the retail price and no under reporting/sales suppression would not take place.
The FED has been revised on domestic and international travel by air so the officials are requested to ensure that the amount properly charged, collected and paid by the airlines.
The concerned RTOs and LTUs have been directed to coordinate with the Civil Aviation Authority to ensure the revised FED of 16 percent on chartered flights is properly charged and paid.
The RTOs and LTUs are directed to identify the retailers those who are part of national or international chains, or are located in air-conditioned shopping malls or have credit and debit card machines, or have cumulative bills exceeding Rs 600,000 for the past 10 months (average 50,000 per months) for ensuring their registration and payment of sales tax in normal regime.
The officials are directed to coordinate with the electricity distribution companies in their respective jurisdiction to enable charging of sales tax, from the retailers who pay sales tax through their electricity bills on the following rates: five percent of monthly electricity bill up to 20, 000 and 7.5 percent of monthly electricity bill above Rs 20,000.
The officials to put in place a system of monthly return analysis with a view to identifying cases in which inadmissible input tax has been claimed by taxpayers, and taken legal actions to disallow/recover such amounts and it is advised that CREST team to enable the system for uniform implementation.
In budget 2014-2015, it is emphasized that CREST team should develop and deploy an electronic scrutiny and intimation system for reducing interactions between taxpayers and tax collectors, minimize discretion, and enhanced efficiency of scrutiny of returns and other data with IR Operating Wing.
RTOs and LTUs to ensure that the further tax charged from unregistered persons (is actually the amount payable by the unregistered persons with the objective of incentivizing them to get registered) is fully deposited in the treasury. However, it has been noticed that some registered persons making supplies to unregistered persons are claiming further tax as part of their output tax, to reduce their net tax payments. In this regard CREST team is requested to build this in the system.

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