Installation of automated track-and-trace system: FBR encountering compatibility issues at sugar mills

ISLAMABAD: The Federal Board of Revenue (FBR) is facing compatibility issues during the installation of an automated track and trace system at the sugar mills due to practical problems in the absence of standardization and old machines unable to link with the auto applicators of the system.

Sources told Business Recorder that the auto-applicators were unable to link with the machines installed at the sugar mills resulting in installation of the manual track and trace system.

The trial runs of the automated system were not possible at sugar mills because the mills were not ready to stop production during the peak season. The dusty environment, old machines and lack of will of sugar mills are among the major factors behind the non-installation of the automated track and trace system at these mills.

Poor monitoring of TTS: FBR suspends supervisory staff at sugar mills

Tax stamps are installed manually and system is activated and linked with the FBR for monitoring of bags. There is connectively of the system with the bags having tax stamps installed manually to monitor the production.

The system is activated and linked with the FBR’s MIS system for monitoring, but the tax stamps are not installed automatically through the machines, ie, auto applicators. Recently, Prime Minister Shehbaz Sharif expressed displeasure over the non-installation of automatic track and trace system in all the sugar mills.

Meanwhile, the FBR chairman has received a presentation of the Pakistan Polypropylene Woven Sack Manufacturers Association that they once again request the Federal Board of Revenue (FBR) to document the tax collection with the printing of QR-Code on the environment friendly and recyclable Polypropylene bags produced by around 250 polypropylene factories across the country for the industrial sectors.

Since January 2020, the industry has written several letters on the subject by emphasizing that printed QR-Code, besides documenting the economy, will also facilitate the issuance of digital invoices bearing serial number of the bags supplied to the industrial consumers, this will bring the undocumented sectors in the tax net, increasing the revenue collection manifolds.

To start, the FBR may continue the tracking systems, ie, printed paper stamps coupled with the QR-Code printing on the polypropylene bags, as in the coming years, the indigenous printed QR-Code on bags will replace the old and repealed paper stamps having no backup for digital invoicing to ascertain the authenticity of the stamps to discourage the affixation of fake stamps, it added.

The monitoring system of sugar production was implemented over 79 sugar mills, having 151 production lines nationwide. The then Prime Minister had himself launched TTS on 23rd November, 2021 on the Sugar Sector. Thereafter, no sugar bags were allowed to be removed from the factory premises and sold in the market without tax stamps.

The FBR has deputed special vigilance teams, comprising senior tax officials, to monitor the clearance of the sugar bags from sugar mills to seize such bags, which were cleared without affixation of tax stamps/unique identification marking (UIMs) under the TTS.

In this connection, the FBR is strictly monitoring the sugar mills to ensure that the tax stamps are affixed before clearance of the sugar from the mill’s premises.

The enforcement wing of the FBR has seized the sugar bags from mills located in Sargodha, Mithi, and Tando Muhammad Khan.

The FBR has suspended the supervisory staff deputed at the sugar mills for monitoring at Jhang, Badin, Mirpurkhas and Faisalabad for committing negligence and allowing clearance of sugar bags without affixing stamps of TTS. The FBR is also seizing the sugar bags from warehouses and premises of dealers, which were cleared without affixation of tax stamps.

Under the counter-tax evasion operation, the FBR’s special vigilance teams would seize sugar bags, which were found without affixation of tax stamps from mills/warehouses.

Copyright Business Recorder, 2023