Federal Board of Revenue (FBR) on Tuesday allowed importers to freely supply imported retail items in the domestic markets in cases where importers have intimated the commissioners about undertakings to print the retail price within 10 days of release/clearance of consignments.
The FBR has also directed collectors of customs to invoke penal provisions against manufacturers/importers who violate the undertaking or are otherwise non-compliant with requirement of retail price taxation.
In this regard, the FBR has issued instructions on the application of serial number 26 of section 33 of the Sales Tax Act here on Tuesday.
According to the FBR, the FBR has received queries from various customs clearing agents and customs collectorates regarding application of newly inserted Serial No. 26 in Section 33 of the Sales Tax Act, 1990.
In this regard it is clarified that at import stage the mechanism of clearing of goods already defined in STGO 103 of 2019 is to be followed, the FBR said.
The STGO recognizes that in some situations, the printing of retail price is not possible and allows clearance of goods on payment of Sales Tax in the manner as provided therein subject to furnishing of an undertaking that the retail price shall be duly printed. Therefore, the provisions of the STGO be followed by the customs authorities. However, the aforesaid undertaking shall mention that the importer shall print the retail price within ten days of release/clearance of the consignment and intimate the commissioner concerned for inspection before further supply, the FBR maintained.
However, if inspection is not made within ten days after intimation, the importer/manufacturer will be free to supply goods in the market. The newly inserted penal provisions shall be invoked if the manufacturer/importer violates the undertaking or is otherwise non-compliant with requirement of retail price taxation, the FBR added.
According to a Sales Tax General Order (STGO) 103 of 2019, the Board vide a letter directed that imported Third Schedule items be allowed clearance after affixation of stickers printed with retail price till July 31, 2019.
The Board had received several representations highlighting various issues and requesting further extension in the aforesaid time period. Accordingly the Board is pleased to provide as under:-
For the imports from North and South America, if bill of lading date is prior to June 30, 2019, the condition of printing retail price is relaxed up to August 31, 2019, subject to the condition that the importer declares retail price for each of the imported items in terms of the Section 2(27) of the Sales Tax Act, 1990, and that the goods are assessed for sales tax on such declared retail price.
The FBR clarified that the retail price, if not printed at import stage, can be printed at the port of import in the prescribed manner. If that is also not possible, the importer will undertake to print the retail price after clearance of goods and will pay sales tax on retail price which will not be less than 130 percent of the customs value increased by assessed customs duties, excise duty and other applicable taxes and charges excluding sales tax.
If the phrase "in retail packing" appears against any item/entry in the Third Schedule, the retail price taxation thereon will not apply if such items are not in retail packing at the time of import. All other items will be charged to sales tax on the basis of retail price even if not in retail packing, the FBR maintained.
Under the existing law, the goods being raw materials or intermediary goods, with customs duty rate below 16 percent, are excluded from purview of value addition tax under the Twelfth Schedule. Such items, if imported by a commercial importer, are in such form that the same can be sold to the customer without further manufacturing process, such as tea, spices, etc, and the same will be the subject to value addition tax, the FBR's STGO 103 of 2019 added.
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