The Central Board of Revenue (CBR) has issued procedure for calculation of sales tax refund for ghee and cooking oil industry. In this connection, the CBR on Saturday issued instructions to all Collectors of sales tax for implementation of the procedure for filing refund claims with the sales tax department.
The directive has been issued in the light of decisions taken in the meeting between tax managers and Pakistan Vanaspati Manufacturers Association (PVMA) on September 9, 2004.
Under the mechanism, it has been decided that 15 percent value-addition based upon taxable purchases shall be the basis of fixing sales price of PVMA.
The CBR has directed collectors that PVMA members would revise their tax returns for the two years ending June 2004 accordingly as per 15 percent value-addition.
The refund claims (if any) for the year up to June 2003 shall be prepared by members of PVMA under this procedure and submitted to the concerned Collectorate of Sales Tax for further processing of applications. The claims shall be processed and paid as per rules and conditions applicable for refunds.
The procedure added that the excess of input tax over output tax (if any) for the year June 2004 shall be carried forward and adjusted as per existing rules and conditions.
The CBR has informed collectors that the Board has rejected the proposal of PVMA to impose further 2 percent withholding tax on commercial importers. The proposal was not supported by Member Direct Taxes. Member DT has explained reservations to the PVMA in this regard and it was decided to take the suggestion back.
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