To simplify tax collection mechanism, the Central Board of Revenue (CBR) has issued special procedures for service providers, nil filers of sales tax, steel melters, re-rollers, ship-breaking industry and other sectors.
Detailed procedure has been issued for retailers, jewellers, spinning industry and separate mechanism has been devised for collection of general sales tax (GST) from people providing taxable services, including hotels, clubs, caterers, marriage halls, custom house agents, stevedores, ship chandlers, courier services and advertisements on television and radio.
The CBR has devised Sales Tax Special Procedure Rules 2004 through SRO 484 (I)/2004 of June 12.
Official sources told Business Recorder here on Tuesday that all the sales tax clarifications issued from time-to-time have been incorporated in the new compendium issued for each sector of the economy.
It has been a general practice in the CBR that procedures for different sectors and service providers were issued after one to two months of budget announcement.
This is for the first time that the CBR has issued notifications and procedures for sectors/services at the time of budget.
The issuance of detail procedure would substantially reduce the issuance of frequent clarifications after the budget. Previously, the CBR used to issue clarifications on the queries raised by various service providers. This exercise would come to an end in the presence of procedures clarifying each and every aspect of applicability of tax.
The special procedure for nil filers would be applicable on every registered person who files a nil return for any tax period. The tax collector would set up one or more Nil Return Receipt Counters to receive nil returns from the registered people.
The collector would ensure that the location and timings of the Nil Return Receipt Counters are publicised in newspapers and displayed at a prominent place in the collectorate. The detail procedure is given in SRO 484(I)/2004.
Special procedure has been devised for payment of sales tax by commercial importers on value addition. The CBR has given examples to calculate sales tax on value addition.
The procedure for collection of sales tax from steel melters and re-rollers explain that for the purpose of determination of tax liability, the production of a steel melter would be calculated at the rate of 800 units of electricity consumed for production of one metric ton ingots or billets. Where a steel melter melts and casts ingots or billets from locally generated scrap for which a sales tax invoice is not available, he would pay sales tax on value addition, subject to the condition that the minimum value addition would be Rs 2,667 per metric ton.
The procedure has specified that All Pakistan Steel Melters Association would be responsible to ensure that all their members pay sales tax in the manner specified in these rules, and in case of non-compliance by any steel melter, the association would actively assist the concerned collectorate for enforcement and recovery of sales tax.
The special procedure for the ship-breaking industry explains method of determination of input tax and payment of output tax. It clarifies time limit for input adjustment along with the specimen of payment challan for ship-breakers.
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