Data to be collected from PSMA, Minfal: FBR to find reasons behind low sales tax

The Federal Board of Revenue (FBR) has decided to collect data from Pakistan Sugar Mills Association (PSMA) and Ministry of Food and Agriculture to ascertain reasons for low sales tax collection from sugar mills in the first half (July-December) of 2007-08.
The FBR has witnessed a major decline in sales tax collection from sugar mills, particularly those located in Sindh. Tax authorities have directed Member, Sales Tax, to analyse the data and suggest concrete measures to exploit the full tax potential of this sector.
Sources told Business Recorder on Monday that the FBR was using different sources to collect data on sugarcane purchased, crushed and sugar produced by the mills. In this connection, sales tax officials in Faisalabad have designed a pro forma for collection of information from the mills.
The quality of sucrose recovery while producing sugar is also an important area which needs to be analysed. The data on production, sales and stock position would also be examined. It would be ascertained whether the increase/decrease in sucrose has any direct impact on net profit of the mills.
Sources said that detection of alleged sales tax evasion by sugar mills is not an easy task, as it is difficult to check all trucks cleared from each and every sugar mill even if sales tax officers are deputed at certain mills. There are numerous factors which need to be examined. For example, sucrose recovery from new machines is more as compared to old machines. The assessment of sales tax on deemed price mechanism is also restricted to the declared clearance made by the mills.
The FBR had directed the collectors of sales tax to approach the provincial Cane Commissioners for analysing the data including area-wise sugarcane yield for accurate assessment of sales tax on sugar. Collectors are obtaining necessary information like area-wise sugarcane crushing and estimated volume of sugarcane juice obtained from it in different areas.
It would help in ascertaining the accurate production of white crystalline sugar in units located in different cities. The collectors would be able to calculate sales tax more accurately on the estimated quantum of produced sugar. It is important to mention here that certain sugar mills had indulged in short-filing of sales tax returns during 2007-08.