On the recommendations of ship breaking industry, the government has removed ambiguities in the special procedure for the payment of sales tax by the ship breakers. The CBR on Saturday issued new procedure for the payment of GST by this industry.
According to the procedure, sales tax paid at import stage shall be the amount of sales tax paid as per the Goods Declaration (GD) filed under the Customs Act, 1969.
Provided that the value of ship imported for scraping or breaking for assessment at import stage shall be 220 dollar per LDT (in equivalent Pak rupees), irrespective of the actual import value.
A ship breaker shall pay sales tax on the supplies of scrap on fixed value addition of Rs 2470 per metric tonne. He shall deposit the amount of sales tax due along with the sales tax return, in the designated branch of National Bank of Pakistan on or before the due date.
He would deposit sales tax in advance, before the time of supply, provided that all formalities ie issuance of sales tax invoices, maintenance of proper records, filing of monthly return, etc are complied with. A ship breaker paying sales tax on fixed value addition shall not be entitled to any input tax adjustments.
Subject to a maximum aggregated wastage of seven per cent, the following shall normally be the percentage or proportion of scrap and other products obtained from the breaking of oil tankers, bulkers, cargo ships, drilling ships, warships, passenger ships and cattle carriers:
Ship plate and profiles of 1/2 inch thickness and above, 40 percent; ship plate and profiles of 3/8 inch thickness and above but below 1/2 inch, 20 percent, second quality re-rollable scrap of short lengths, 15 percent; small irregular pieces and re-meltable scrap, 15 percent; cast iron, pipes or cast steel, 7.5 percent; non-ferrous metals, 0.5 percent and stores or machinery, 2.0 percent.
In case of ships other than those specified in sub-rule (1), the percentage of scrap and products shall be determined by local sales tax office in consultation with Pakistan Ship-Breakers' Association.
In addition to records specified under the Act, the ship breakers shall maintain additional ship-wise records in the specified statement. The ship breaker shall issue a serially numbered sales tax invoice at the time of supply under Section 23 of the Act, showing the amount of sales tax charged on the basis of fixed value addition.
The ship-breakers shall clear their sales tax liabilities in respect of ships weighing up to 10,000 LDT within four months, while in case of ships weighing more than 10,000 LDT, within eight months from the date of filing of GD.
Provided that the sales tax liability shall have to be discharged by the ship-breaker either on completion of clearance of goods of vessel or within the maximum time period allowed as aforesaid, whichever is earlier.
Provided further that the sales tax liability on value addition on goods cleared during the month shall be paid along with the monthly return.
In case a ship-breaker fails to clear his stocks within the time limit, he shall pay the remaining amount of sales tax on whole of the remaining stocks by the 15th day of the following month:
Provided that as and where applicable, the liability of sales tax in respect of a ship, including a ship in respect of which Goods Declaration (GD) is filed in future, shall be deemed to have been fully discharged when the import related sales tax due in respect of the ship is actually deposited on the basis of value mentioned in rule 82 as well as sales tax on local supply is actually deposited on the basis of fixed value addition mentioned in rule 83.
The concerned Audit Division of the Collectorate shall commence audit of sales tax records of a ship breaker within two weeks of the expiry of the due date for filing of sales tax return and deposit of sales tax along with payment of sales tax on balance stock or on the expiry of time limit, whichever is earlier.
If the tax payment is found to have been made in accordance with the provisions of these rules, the Assistant Collector In-charge Audit Division shall issue a certificate, in such format as the concerned collector may specify, the procedure added.
Comments
Comments are closed.