Large Taxpayers Unit (LTU), Karachi has posted its officers at all sugar mills across the province to monitor sugar production, it is learnt on Wednesday. According to sources, the decision has been taken after detecting serious discrepancies in financial ledgers of sugar mills across Sindh.
They said some 28 sugar mills are located in Sindh and LTU Karachi had posted its officers at all sugar mills to monitor sugar production under section 40-B of Sales Tax Act 1990. They said the department had also directed its field formations to submit a report on sugar production on a daily basis, adding that action was taken against sugar mills to ascertain the facts behind severe dip in revenue collection in sugar sector.
They said tax refunds in sugar sector in Tax Year 2013 stood at 154 percent of tax payments and the records show an alarming performance wherein tax refund claims amounted to Rs 561 million against tax payables of Rs 364 million. Replying to a question, sources said one of the reasons for this revenue decline may be the sale price of sugar which was as high as Rs 88 per kg in November 2011 but later it decreased to Rs 50 per kg. However, the production cost per kg is reported over Rs 60.
Moreover, they said sugar price had declined in Tax Year 2013 but most of the sugar mills had consistently been declaring huge losses since Tax Year 2010, making sugar mills' returns doubtful. They said that sustainability of these sugar mills declaring huge losses even during sugar price boom during 2011 raised questions about the declared version of these sugar mills. They added that there may be suppression of sales by the sugar mills. In order to ascertain the facts behind this revenue dip in sugar sector, LTU Karachi posted its officers at all sugar mills in Sindh to monitor sugar production under section 40-B of Sales Tax Act 1990 and also directed them to submit report.
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