Fertiliser, other items: ST may be charged on basis of printed retail price

The government is planning to charge sales tax on the basis of printed retail price of fertiliser along with other items from next fiscal year (2013-14) to generate more revenue. Sources told Business Recorder here on Wednesday that the Federal Board of Revenue has proposed expansion in the scope of Third Schedule of the Sales Tax Act 1990 in Budget (2013-14) by encompassing more items including fertilisers for imposition of the sales tax on the basis of printed retail price from 2013-14.
Presently, items chargeable to sales tax at the retail stage included fruit and vegetable juices, ice cream, aerated waters or beverages, syrups and squashes, cigarettes, toilet soap, detergents, shampoo, toothpaste, shaving cream, perfumes and cosmetics, tea, powder drink, milky drink, toilet paper and tissue paper, spices sold in retail packing with brand names and trade marks and shoe polish and shoe cream.
In last budget, the FBR has decided to expand the scope of the Third Schedule of the Sales Tax Act by including cement, fertilisers, lead batteries and bottled water in budget. However, the proposal was not incorporated in Finance Act 2012. Now, the FBR has once again forwarded the proposal to charge sales tax on the basis of printed retail price of different items.
Sources said that the manufacturers have to pay sales tax on all the stages of value addition in case of consumer items having printed retail price. Under the Value Added Tax (VAT) regime, the tax is to be paid on value addition attributed to each stage, starting from manufacturing down to retail sale to the end consumer. A number of dealers, distributors and wholesalers of different consumer items are still out of tax net despite efforts to make the intermediate linkages in supply chain part of the taxation system and resultantly the tax actually chargeable at each stage on value addition is not being recovered, sources added.
The Board has decided to considerably expand the scope of the Third Schedule of the Sales Tax Act 1990 in budget (2013-14) by including a number of new consumer items for imposition of the sales tax on the basis of printed retail price from next fiscal year. The FBR would retain the Third Schedule of the Sales Tax Act 1990 in coming budget under which manufacturers are paying sales tax of all the stages of value addition of consumer items having printed retail price.