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The Federal Board of Revenue (FBR) has decided to charge sales tax from stevedores, only on the services of loading and unloading of cargo from ships. Sources told Business Recorder on Saturday that old definition of 'stevedores' covers services of loading and unloading of cargo from ships.
This definition was used for calculation of sales tax on services provided by the stevedores. It was reported to the Board that the stevedores were engaged in different kinds of other services, like goods warehousing, goods movement, etc. In view of different services provide by the stevedores, the definition was changed in Sales Tax Special Procedure Rules of 2005.
Through this definition, the scope of services provided by the stevedores was extended and goods-related services were brought in their purview. At that time, fixed amount of sales tax was levied on services provided by the stevedores. This fixed amount of sales tax was charged on 'per container' basis. The stevedores contested that the scope of their services had been wrongly expanded, and it was irrelevant to charge fixed amount of sales tax on stevedores.
They further contested that the sales tax should be charged only on loading and unloading services. Now, the stevedores have been brought into the standard value-added tax (VAT) regime and they have been allowed to claim input tax adjustment. But the old definition of 'stevedores' remained unchanged during budget 2008-09.
The definition of the stevedores has been corrected so that sales tax could only be charged on the services of loading and unloading. No sales tax would be charged on other services provided by the stevedores, if any. Under Sales Tax Special Procedure Rules 2007, a stevedore shall issue serially numbered sales tax invoice as required under section 23 of the Act.
Every person registered as stevedore shall file monthly sales tax return in the manner as prescribed in Chapter II of the Sales Tax Rules, 2006. The cases or disputes relating to the stevedores operating under these rules shall be dealt with in the Large Taxpayers Unit, Karachi.
According to amended Sales Tax Special Procedure Rules 2007 issued on Saturday, 'stevedore' means a person, company or commercial concern engaged in loading and unloading of cargo, including bulk cargo, from ships, whether mechanically or otherwise, and whether or not licensed by the respective port authorities.

Copyright Business Recorder, 2008

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