The industrial units in federally-administered tribal areas (Fata) and provincially-administered tribal areas (Pata) have agreed to withdraw their tax appeals from the courts and pay excise and customs duties of Rs 1.5 billion for obtaining sales tax exemption of one billion rupees.
Sources told Business Recorder on Thursday that units and the Central Board of Revenue (CBR) have mutually finalized an arrangement to end litigation pertaining to the pending sales tax payments from 2002 to 2004. Under the agreement, 10 industrial units of Fata/Pata would be given exemption on sales tax arrears of one billion rupees on fulfilment of certain conditions. First, the CBR would write off sales tax demands of 2002-04 in case the units submits post dated cheques of Rs 1.5 billion excise duty/customs duty.
Secondly, Fata/Pata units would ensure revival of industrial activities in these areas for contributing reasonable taxes to the national exchequer. The sales tax exemption of arrears should be taken as a major incentive to promote industrialisation in tribal areas. The CBR will use powers of section 13 of the Sales Tax Act, 1990, to implement the agreement. According to CBR, the industries located in Fata/Pata are closed because of accumulated sales tax arrears as a result of the relief provided to the industries by the Peshawar.
High Court, which was later on decided against the units by the Supreme Court. The businessmen of tribal areas had made hue and cry at different forums due to huge amount of sales tax arrears and expressed their inability to pay the same.
To provide relief to the industries in Fata/Pata, it is proposed to exempt the arrears of sales tax against the units subject to the condition that disputed excise and customs duties are duly deposited by them.