ISLAMABAD: The Federal Board of Revenue (FBR) has issued a new procedure for the tax officials to determine wastages of any input/raw materials unfit or unable for use during the manufacturing or production of the finished goods, to control inadmissible input tax adjustments.
The FBR has issued Sales Tax (Imposition of Restrictions) on Wastages of Inputs Rules, 2020, here on Saturday.
The purpose of determination of wastages shall be to determine the restriction on inputs on account of wastages and to resolve disputes about the input tax adjustment suspected or believed to be above the actual entitlement by showing use or consumption of inputs higher or more than the inputs actually used in the manufacture or production of any goods, or to fix the extent of wastages of inputs beyond which input tax adjustment shall not be admissible, the FBR said.
The action for determination of wastages may be initiated either by the board at its own level or on a reference received from the chief commissioner of Inland Revenue or the director general of Intelligence and Investigation (Inland Revenue) or on the recommendations of any government agency or organisation or industrial or business association.
On receipt of reference from the board, the Input Output Co-Efficient Organization (IOCO) shall chalk out a complete plan for the conduct of necessary analyses and complete the exercise of determining the input-output ratios and wastages covering, inter alia, following components within the timeframe given by the board.
The Board on its own or on a representation by any aggrieved person may review and revise the extent of wastages fixed under these rules provided that nothing shall restrict the board from periodically reviewing, revising and re-fixing any such wastages in view new information received or gathered, research conducted or done in the relevant scientific field, technological and scientific developments made, changes or improvements in industrial processes or for any other reasons, the FBR added.
Copyright Business Recorder, 2020
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