Request for transfer of ST registration to respective RTO: Corporate taxpayer's option taken away

The Federal Board of Revenue has taken away the option of the corporate taxpayers to apply for transfer of sales tax registration to the respective Regional Tax Office (RTO) having jurisdiction where the place of business is located. In this regard, the FBR has amended the Sales Tax Rules 2006 through SRO.945(I)/2013 to revise the procedure for granting sales tax registration on the basis of the jurisdiction of the taxpayers. The amended rule would be applicable from July 1, 2013.
Earlier, the corporate person had the option to apply for transfer of registration to the Collectorate having jurisdiction where the place of business is located. The said option to the corporate persons has been withdrawn through amendment to the Sales Tax Rules 2006, sources said. However, the Board is legally empowered to transfer the registration of any registered person to a jurisdiction where the place of business or registered office or manufacturing unit is located. The jurisdiction of Large Taxpayers Units shall remain as specified by the Board under SRO.945 (I)/2013.
Experts said that the Board has amended the rules for sales tax Jurisdiction. The FBR has further elaborated jurisdiction of sales tax registered person for different legal entities through amendment in sales tax rules 2006 vide notification 945(I)/2013. In many cases, persons are registered in jurisdictions far from the place where manufacturing or production occurs. This creates difficulties in monitoring of production, clearances or sales, and enables such persons to evade taxes. To address this problem, amendment has been made in the Sales Tax Rules, 2006.
According to SRO.945 (I)/2013, in case of listed or unlisted public limited company, the place where the registered office is located. In case of other companies, if the company is primarily engaged in manufacture or processing the place where the factory is located and if the company is primarily engaged in business other than manufacturer or processing, the place where main business activities are actually carried on.
In case of a person not incorporated, the jurisdiction where the business is actually carried on and in case of a person not incorporated, having a single manufacturing unit and whose business premises and manufacturing unit are located in different areas, the jurisdiction where the manufacturing unit is located.
Following is the text of the notification issued on Tuesday: In exercise of the powers conferred by sub-section (1) of section 4 and section 40 of the Federal Excise Act, Customs Act (IV of 1969), section 50 of the Sales Tax Act, 1990 read with sub-section (2) of section 8, clause (ii) of sub-section (2) of section 8B, section 9, 10, 14, 21 and 28, clause (c) of sub-section (1) of section 22, the first proviso to sub-section (1) of section 23, section 26, sub-section (6) of section 47A, section 48, 50A, 52, 52A and 66 thereof, the Federal Board of Revenue is pleased to direct that the following further amendments shall be made in the Sales Tax Rules, 2006, namely: In the aforesaid Rules, in rule 5, in sub-rule (1), for clauses(a) and (b), the following shall be substituted, namely: (a) in case of listed or unlisted public limited company, the place where the registered office is located;
(b) in case of other companies; if the company is primarily engaged in manufacture or processing at the place where the factory is located; and if the company is primarily engaged in business other than manufacturer or processing, the place where main business activities are actually carried on;in case of a person not incorporated, the jurisdiction where the business is actually carried on; and in case of a person not incorporated, having a single manufacturing unit and whose business premises and manufacturing unit are located in different areas, the jurisdiction where the manufacturing unit is located; "Provided that the jurisdiction of Large Taxpayers Units shall remain as specified by the Board". Provided further that the Federal Board of Revenue may transfer the registration of any registered person to a jurisdiction where the place of business or registered office or manufacturing unit is located". This notification shall be deemed to have taken effect from the 1st day of July, 2013, it added.