The Federal Board of Revenue has directed Chief Commissioners of Large Taxpayer Unit (LTUs) and Regional Tax Office (RTOs) to exercise powers under section 45(2) of the Federal Excise Act 2005 to depute Inland Revenue officers at sugar mills, as sugar is an excisable commodity governed under the excise tax laws.
The FBR has issued instructions on February 13 to the field formations empowering the Chief Commissioners to use powers of section 45 (access to records and posting of excise staff, etc) of the Federal Excise Act 2005 to depute tax officers in sugar mills. According to sources, sugar has been subjected to the Federal Excise Duty. The monitoring of sugar mills under section 40B of the Sales Tax Act 1990 is not enough.
It is necessary that the excisable commodity should be monitored under the excise law ie Federal Excise Act 2005. Therefore, the FBR has issued new instructions to the Chief Commissioners of the LTUs and RTOs to exercise powers under section 45(2) of the Federal Excise Act 2005.
As per section 45(2) of the Federal Excise Act 2005, the Board may, post officer of Federal Excise to the premises of registered person or class of such persons to monitor production, removal or sale of goods and the stock position or the maintenance of records. Provided that if a Collector, on the basis of material evidence, has reason to believe that a registered person is involved in evasion of duty, he may, by recording the reason in writing, post an officer of Federal Excise to the premises of such registered person to monitor production, removal or sale of goods and the stocks position or maintenance of records, they added.
According to the FBR's instructions issued to the field formations, the FBR has issued instructions on 'monitoring of sugar mills under section 45(2) of the Federal Excise Act, 2005 read with section 40B of the Sales Tax Act, 1990'. As per FBR directive, in partial modification of Board's letter of even number dated 8th February, 2013 on the subject cited above, it is stated that:
The subject of the said letter shall be read as "Monitoring of Sugar Mills Under Section 45(2) of the Federal Excise Act, 2005 read with Section 40B of the Sales Tax Act, 1990" and shall always be deemed to have so read; and' In para I of the said letter, "under Section 40B of the Sales Tax Act, 1990," shall be read as "under Section 45(2) of the Federal Excise Act, 2005 read with Section 40B of the Sales Tax Act, 1990," and shall always be deemed to have so read.
In para 2 of the said letter, "under section 40B ibid" shall be deleted and shall always be deemed to have so deleted, FBR's instructions added. As a result of changes made in the FBR's earlier instructions, the old instructions dated February 8, 2013 would now read as: The Board has directed that Officers of Inland Revenue be posted, with immediate effect, under Section 45(2) of the Federal Excise Act, 2005 read with Section 40B of the Sales Tax Act, 1990, at the premises of the sugar manufacturers / mills to monitor production, sale of taxable goods, stock position and actual recovery percentage of sugar.
The above permission has been granted to combat alleged evasion of taxes/duty by the registered persons. The staff so posted should be present at the premises round the clock to monitor the inputs, production, sales and discharge of duty/tax liabilities. It is further requested that special vigilance teams may also be constituted to ensure that the officers and staff posted is performing their duties efficiently and effectively. The LTUs may seek help from RTOs to overcome manpower shortage, if any, in constituting teams for posting at the premises of their registered persons as aforesaid. Weekly reports regarding monitoring should be sent to the Board regularly, it added.