The Central Board of Revenue (CBR) has launched a survey to determine the quantum of non-payment of sales by steel melters and re-rolling mills. The All Pakistan Steel Melters Association and All Pakistan Steel Re-rolling Mills Association have been intimated by the Board about this.
Sources told Business Recorder here on Monday that CBR has ordered all collectorates of sales tax to survey steel melters and re-rolling industry for taking action against unregistered units.
The survey would help in identifying non-payment of sales tax, quantum of inadmissible refund and violations of special procedure (2004-05) for sales tax payment by this sector.
It has also come to the notice of the Board that certain sales tax officials of collectorates, for reasons unknown, are forcing these sectors not to register with the department.
The CBR has detected that some of the steel re-rolling mills have shown abnormally high purchases during the tax period up to June 2004, probably to claim 'carry forward' and offset their tax dues in the subsequent months.
They also have carried forward amounts prior to budget 2004-05 because supply of billets and ingots was chargeable to sales tax at the rate of 20 percent whereas the 'M.S. products' etc were chargeable to sales tax at the rate of 15 percent.
The CBR observed that certain steel melters and re-rollers were allegedly involved in manufacture and subsequent supply of taxable products without registration with the sales tax department.
On the other hand, the steel re-rolling sector has contested that the officials and staff of certain collectorates were reportedly misguiding the taxpayers and, instead of encouraging them to pay their liabilities.
The Re-rolling Mills Association has complained that its members are being harassed on one pretext or another.
On the request of Steel Re-rolling Association, the CBR has decided to set up a joint survey team comprising members of the associations and sales tax officials.
The team would conduct survey of the re-rolling mills on the parameters devised jointly by the tax authorities and steel sector.
The CBR has also directed all collectors to set up a dedicated cell in each collectorate to monitor the payment of sales tax by the steel melters and steel re-rolling sectors and close liaison be maintained by the officer in charge with the relevant association. The collection figure should be monitored and reported to the Board on monthly basis.
The CBR has instructed the collectors to start detailed investigation regarding sales tax refund claimed by these sectors during 2003-04. The quantum of 'carry forward'/refund be verified with the actual stocks and stocks declared to the income tax department.
Under the special procedure, parameters to ascertain the minimum production on the basis of electricity units and tax liability on the basis of minimum value-addition have been notified by the Board.
The taxpayer should be encouraged to discharge their liabilities under the special procedure while audit of the units paying sales tax under the special procedure may generally be confined to scrutiny of liabilities as per notified parameters.
The CBR has ordered immediate action against units which committed non-filing, short-filing or nil-filing of sales tax returns.
The CBR has also asked the collectors to give comparison of the sales tax collection during 2004-05 and 2003-04 from steel melters and re-rolling mills.