Tobacco, fertilizers, cement and petroleum products: Head of FBR for the implementation of the tracking and tracing system

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ISLAMABAD: Federal Board of Revenue (FBR) Chairman Asim Ahmad has requested the Project Manager (Track and Trace System) to ensure the timely implementation of the Track and Trace System for Tobacco, Fertilizers , cement and petroleum products in accordance with agreed deadlines to control sales tax evasion in major sectors.

Sources said company registrar that the President of the FBR received a detailed presentation of the status of the implementation of the system in the various sectors. The meeting was held at the FBR headquarters after Asim Ahmad took over as the new FBR chairman. The tax authorities have asked the Track & Trace system team to meet the agreed deadlines for the implementation of the system.

According to the sources, the FBR will not allow cigarette manufacturers to remove tobacco products from the production site, factory premises or manufacturing plants without affixing tax stamps / unique identification marking (UIM) from the extended deadline of May 20, 2020.

Previously, the deadline was April 30, 2022, which has now been extended to May 20, 2022.

The provisions of Section 40C(2) of the Sales Tax Act 1990, read with Rule 150ZF of the Sales Tax Rules 2006, require FBR to notify the date of implementation of electronic monitoring of production and sales of goods in the manner required by law at all manufacturing sites in the notified sectors.

Fertilizer sector: FBR will implement a tracking and tracing system on July 1

Two large cigarette manufacturing companies are in the final stages of implementing the track and trace system, while a local company has also signed the tripartite agreement with the FBR. However, seven local manufacturers have obtained the stay order against the track and trace system and the next court date has been set for June 8, 2022.

The FBR will also confiscate packets of cigarettes (without tax stamps) manufactured in Azad Jammu and Kashmir (AJK), but under the territorial jurisdiction of the tariff zones of Pakistan.

Sources said the installation of the machines has started on the production lines of the fertilizer manufacturing units. Machines to be installed in fertilizer factories were imported and later installed in different factories. The installation of the machines would be completed by June 30, 2020. However, the FBR will confiscate the bags of fertilizers in the process of customs clearance from production sites, factory premises or manufacturing plants without affixing tax stamps/ unique identification marks (UlM) from July 1, 2022. .

The system would be installed on 13 fertilizer production lines, including at the import stage. Therefore, the system would be installed in nine local units and 3-4 systems being installed to affix tax stamps on imported fertilizers. Imported fertilizer should also be documented through the track and trace system at relevant customs posts or ports. Revenue stamps would also be affixed to bags of imported fertilizer packed at ports or customs posts.

Sources added that the innovative digital sugar production monitoring system has been implemented in 79 sugar factories, having 151 production lines across the country. The FBR collected a sales tax of Rs 26.5 billion in the first four months (i.e. 21 December to 22 March) of the current sugarcane crushing season against Rs 19, 9 billion during the corresponding period of the last grinding season, registering an increase of Rs 6.59 billion (33 percent) in growth.

All mills had to report their actual milling and production during the current milling season. Thus, following this digital intervention, the sugar mills produced a record level of sugar, i.e. 7.51 million tonnes (until March 24, 2022) against 5.63 million produced during the last crushing season, i.e. an increase of 34%. Similarly, the FBR collected sales tax amounting to Rs 26.5 billion in the first four months (i.e. 21st December to 22nd March) of the current crushing season, against Rs 19.9 billion collected during the corresponding period of last crushing season, registering an increase. of Rs 6.59 billion, representing a growth of 33%.

The system will result in digital tracking of manufacturing and large-scale production of these key sectors. Also, by preventing revenue leakage, it will help minimize human intervention and thus pave the way for a transparent and reliable tax compliance system across the country, they added.

Copyright Business Recorder, 2022

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