Implementation of VAR a must: No sugar mill to be allowed to remove goods from Jan 1: FBR

KARACHI: No sugar mill will be allowed to remove goods from production facilities without implementation of Video Analytics Rules (VAR) 2020 issued by the Federal Board of Revenue (FBR) from January 1, 2021.

Following the non-installation of Video Analytics System (VAS) by sugar mills, the FBR has decided not to allow the release of goods from production facilities without video surveillance and video analytics by January 1, 2021.

In a letter issued to the chairman, Pakistan Sugar Mills Association (PSMA) regarding the implementation status of VAS for electronic monitoring of sugar mills on the other day, it is intimated that the FBR has decided not to allow sugar mills to remove its goods from production facility without video surveillance and video analytics by January 1, 2021.

Earlier, the FBR has authorized seven vendors for VAS to gauge the real production of major revenue generation sectors including sugar, cement, tobacco and beverages and the list of the vendors was initially shared with PSMA as in the first phase, the VAS was supposed to be installed in the sugar sector as the association had already signed an MoU with the FBR for the purpose. The PSMA was also directed to provide mills-wise updated VAS deployment status of all sugar mills to the board by November 26, 2020.

However, the information revealed that only 10 sugar mills have invited quotations from the pre-qualified vendors, despite that the VAR, 2020 issued vide SRO 889(I)/2020 clearly laid down responsibilities of the manufacturer vide Rule 150ZQZE, which inter-alia provides for unhindered availability of production facilities for installation of the system and allow the access to the vendor and the FBR.

The FBR is of the view that the rampant tax evasion could only be tackled effectively through the use of latest technology and without it, it is impossible to avert massive tax evasion that turns into multi billion rupees per annum in case of each major sector.

Under VAR 2020, the FBR has selected vendors for allowing units of each sector to avail video monitoring system from these selected seven firms.

On the other hand, the cane commissioner, Punjab has also directed all deputy commissioners and additional cane commissioners to depute the ex officio inspectors to examine the sugar mills and take legal action under Punjab Sugar Factories (Control) Act 1950, if any sugar mill is found purchasing sugarcane off-the-book and not issuing the cane purchase receipts (CPRs), which is the violation of section 14(2) of Punjab Sugar Factories (Control) Act 1950.

The said directions were made in response to the complaints received from various growers that some of the mills are indulging in the malpractice of off-the-book purchase of sugarcane and not issuing the CPRs to evade sales tax, sugarcane development cess and other taxes.

Copyright Business Recorder, 2020