While giving zero-rating facility on natural gas consumed by 1098 registered manufacturers of textile products, leather items, carpets, sports and surgical goods, the CBR has directed the collectors of sales tax to keep a constant liaison with Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC) to monitor the gas consumption and production of zero-rated products.
The CBR issued SRO 1039(I)/2005 and SRO 1040(I)/2005 on Saturday to levy sales tax at the rate of zero-percent on natural gas consumed by the registered manufacturers.
The zero-rating facility has been given to 492 units receiving natural gas supply from the SSGC, and 606 units receiving supply from the SNGPL. Monitoring of gas consumption would also be instrumental in ascertaining whether the gas has been consumed by the registered manufacturers or not.
The CBR has also issued instructions to all collectors of sales tax to ensure monitoring of natural gas consumption by units specified in SRO 1039(I)/2005 and SRO 1040(I)/2005.
As per directive, the CBR has issued these notifications to specify the lists and particulars of registered manufacturers, who have been given facility of zero-rating as per SRO 621(I)/2005.
The collectors should ensure that the conditions are duly fulfilled by the manufacturers falling within their respective jurisdiction. Collectors should also monitor consumption of natural gas by these units.
The collectors should also maintain a constant liaison with the suppliers of natural gas ie SSGC and SNGPL for obtaining the relevant data.
Based on monthly past consumption of natural gas by the registered units for the last one year, the collectors should work out the average monthly consumption and data be compared on monthly basis. In this regard, any fluctuation in the average monthly consumption without any reason needs to be investigated. For this purpose, month-wise comparison should be done on the basis of historical figures available with the SSGC and SNGPL.
The registered manufacturers have to fulfil certain conditions to avail zero-rating on the natural gas consumed by them.
The connection should be in the name of the registered person and bill issued by Sui Northern Gas Pipelines Limited (SNGPL) or Sui Southern Gas Company Limited (SSGC) contains the name and the sales tax registration number of such person.
In case where the connection is not in the name of such person, the registration number of such person is mentioned in the bill along with his address as declared in his application for sales tax registration.
The gas is consumed exclusively in the manufacture of goods specified in the SRO 621(I)/2005, dated the June 17, 2005, issued under clause (c) of section 4 of the Sales Tax Act, 1990.