The Central Board of Revenue (CBR) has devised a procedure for the collectors of sales tax to ascertain the quantitative entitlement of inputs/raw materials imported by the vendors/manufacturers at concessional rate of customs duty for subsequent use in the manufacturing of goods under SRO 565(I)/2005.
The CBR on Thursday issued instructions to all the regional collectors for processing of such applications filed by the importers under this notification, as per new directive.
Under SRO 565(I)/2005, the collector of sales tax has the authority to determine the annual quantitative entitlement of inputs. In case the collector is not satisfied with declared input/output ratios of the items to be manufactured, he may, file a reference to the Engineering Development Board (EDB).
This will help in determining whether quantity of imported raw material is in line with the prevalent average of the relevant industry.
According to the directive issued to the collectorates, the collectors will personally ensure that while processing applications under SRO 565(I)/2005 for the purpose of quantitative entitlement of inputs allowed to be imported at concessional tariff rates, unnecessary and undue reference may not be made to the Director Input Output Coefficient Organisation (IOCO) for determination of input/output ratio.
In cases where the applicants have availed of such concessions in the past, their previous "Survey Certificates" may be relied upon. In case of new applicants "Survey Certificates" and quantitative entitlements of other registered persons engaged in the manufacture of identical/similar goods may be kept in view.
The CBR has further directed the collectors that the industry average may be consulted to ensure that entitlement is allowed as realistically as possible. Final confirmation of such entitlement are to be made at the time of audit, or as the case may be, on verification of consumption of inputs before the release of securities.
The collectors should only made reference to the Director (IOCO) in cases where the collectorates is virtually unable to ascertain the accuracy or otherwise of the declared input/output ratios at wastage and no such reference should be made without properly stating the reasons thereof.
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