The Finance Bill 2009-10 would amend the Sixth Schedule of Sales Tax Act to allow sales tax exemption on import of tractors, bulldozers and combined harvesters CKD kits and their direct materials by recognised local manufacturers.
It is learnt that Serial Number 69 of the Sixth Schedule of the Sales Tax Act, 1990 specifies exemptions to tractors, bulldozers and combined harvesters and CKD kits therefor imported by the recognised local manufacturers as per their approved deletion program subject to the same conditions as are envisaged for the purpose of exemption under Customs Act, 1969.
The customs SRO 656 (I) 2006 of June 27, 2006 was amended vide SRO 496(I)/2007, and direct materials for assembling or manufacture of vehicles falling under the Chapter 87 of the First Schedule of the Customs Act 1969 were exempted from customs duty. However, the corresponding change could not be made in Serial Number 69 of the Sixth Schedule of the Sales Tax Act, 1990. Therefore, it is proposed that the same may be amended by including the words "and their direct materials".
The FBR has also decided to empower Additional Collectors, Deputy Collectors and Assistant Collectors to adjudicate sales tax cases falling under section 11 and section 36 of the Sales Tax Act without any restriction relating to the amount of tax involved or amount erroneously refunded. The Additional Collectors, Deputy Collectors and Assistant Collectors would be given powers to adjudicate cases for the assessment of sales tax.
Where a person who is required to file a tax return fails to file the return for a tax period by the due date or pays an amount which is less than the amount of tax actually payable, an officer of Sales Tax shall, after a notice to show cause to such person, make an order for assessment of tax, including imposition of penalty and default surcharge. The adjudication officials would be empowered to deal with such cases.
Similarly, where a person has not paid the tax due on supplies made by him or has made short payment or has claimed input tax credit or refund which is not admissible, an officer of Sales Tax shall make an assessment of sales tax actually payable by that person or determine the amount of tax credit or tax refund which he has unlawfully claimed and shall impose a penalty and charge default surcharge.
The additional collectors and other sales tax officials would be able to adjudicate cases relating to inadmissible refunds and input tax credits. The FBR would amend the Federal Excise Rules to obtain legal backing for filing of composite return, electronically in cases where registered persons are dealing in excisable commodities.
Sources said that the FBR has also decided to introduce a provision in the Federal Excise Act 2005 to strictly deal with the non-filers and belated filers of monthly returns. The section 4 of the Federal Excise Act 2005 requires a registered person to file monthly return and payment of excise duty. No provision is available for assessment of duty, if registered person does not file return or files the return after the due date.