ST hike became effective from June 13: LTUs, RTOs told

The Federal Board of Revenue has directed the field formations to charge enhanced rate of 17 percent sales tax from June 13, 2013. It is learnt here on Friday that the FBR has issued budgetary instructions (2013-14) of sales tax and federal excise to the Large Taxpayers Units (LTUs) and Regional Tax Offices (RTOs) for compliance.
According to the budgetary instructions, the revenue measure included increase in the Standard Rate of Sales Tax from 16 percent to 17 percent. The section 3 of the Sales Tax Act, 1990 has been amended to enhance the standard rate of sales tax from the present 16 percent to 17 percent. This measure is effective from June 13, 2013. Since it has general applicability, the field formations are requested to monitor and ensure that all importers, manufacturers, wholesalers, dealers, etc of taxable goods under the Sales Tax Act, 1990 start charging and paying the new rate of sales tax from the effective date.
In order to promote documentation of the economy and to create an incentive for unregistered persons to get sales tax registration, a new sub-section (1A) has been inserted in section 3 of the Sales Tax Act, 1990, to impose further tax @ 2 percent on supplies made to persons who have not obtained sales tax registration number. Supplies made to registered persons are not affected by this measure. This measure is also effective from 13th June, 2013. Further tax imposed earlier had led to creation of flying invoices,' but now RTOs/LTUs are expected to effectively use Crest and Smart computerised systems to prevent and curb such malpractices. A separate notification is being issued to exclude certain transactions from this levy, the FBR said.
To promote documentation and capture extra tax from persons outside the sales tax net, vide SRO 509(1)/2013 dated 12th June, 2013, extra sales tax @ 5 percent of the billed amount has been imposed on all unregistered electricity and gas consumers having industrial or commercial connection and monthly bill exceeding Rs 15,000. A new chapter IVA has been inserted in the Sales Tax Special Procedure Rules, 2007 vide SRO 510(1)/2013 dated 12th June, 2013, to prescribe the procedure for implementation of this measure. This measure is effective from 13th June, 2013. The RTOs/ LTUs where the electric power and natural gas distribution firms are registered are required to co-ordinate with them for proper and timely implementation, the FBR instructions added.