The Federal Board of Revenue (FBR) has proposed increase in sales tax rates for steel melters, re-rolling mills and ship breakers in coming budget (2014-15) to generate additional revenue of Rs 6-8 billion from these sectors. Sources told Business Recorder here on Tuesday that the FBR has drafted amendments to the Sales Tax Special Procedure Rules for steel melters, re-rollers and ship breakers. It has been proposed to rationalise sales tax rates on the said sectors.
In principle, special procedures should be developed on the basis that net payable amount under normal regime at standard rate, be collected under special procedure in order to facilitate tax administration and enhance compliance. This principle needs to be re-applied in the case of steel melters, re-rollers and ship breakers. At the same time, the balance between steel melters and ship breakers requires to be maintained in budget (2014-15).
The FBR has carried out different workings and calculations for the revision of the sales tax rates on steel melters, re-rollers and ship breakers. For steel melters, the FBR has proposed to raise the sales tax of Rs 4 per unit of electricity to Rs 12.5 per unit of electricity in budget (2014-15). Another proposal under consideration is to revise the sales tax from Rs 5,862 per metric ton (PMT) to Rs 9,602 PMT for ship breakers. Similar kind of other calculations have been done to rationalise sales tax rates on the said sectors.