Importers offer to pay sales tax on 10 percent value-addition, unsold stock after December

Commercial importers have offered to pay sales tax on 10 percent value-addition on stocks not sold by December 31, 2004. Under a CBR rule issued on September 8, 2004, all commercial importers are required to dispose of stocks available on July 1, 2004, within six months ie by December 12, 2004.
Also, the commercial importers are required to file two separate sales tax returns--one for the stocks, and another for the sale made.
The Karachi Sales Tax Bar Association (KSTBA) has approached the CBR to resolve the problem either by extending the date for the disposal of stocks till December 31, 2005, or levy tax on unsold stocks at the rate of 10 percent value-addition.
The KSTBA President Khushnood Ahmed Khan said that for a genuine importer it would be difficult to find a prospective buyer to sell out the entire stock by the end of 2004, as only three months period for full complete sell-out is too short. Also a commercial importer can not bear a loss by selling stocks at throwaway price to meet the CBR requirement.
The KSTBA has suggested that if the CBR allows such importers to endorse leftover stocks by paying sales tax on 10 percent value-addition it would not only bring revenue for the department but would also help ease pressure on importers forced to sell out their stocks, especially during the month of Ramazan when commercial activity is at the lowest ebb.
Khushnood expressed concern over delay in convening of meeting of the Alternative Resolution Committee on Sales Tax set up by the CBR to encourage out-of-court settlements of tax disputes. He said that the association was due to discuss the taxpayers' problems at the forum which has not yet been called in session by the Sales Tax House in Karachi.