The sales tax on supply of cottonseed shall be levied and collected on the basis of quantity supplied, or consumed in-house for expelling of oil by composite cotton ginning units. The FBR has issued special procedure for sales tax on cottonseed oil expelled by oil expelling mills and composite units of ginning and expelling through SRO 188(l)/2015 issued, here on Friday.
According to the FBR, the amount of sales tax chargeable shall be levied and collected at the rate of Rs 6 per 40 kg at the time of supply of cottonseed by cotton ginners for in-house consumption, or to any other registered or unregistered person for the purpose of oil extraction or expelling. All cotton ginners, if not already registered or required to be registered, shall obtain sales tax registration, it said.
The FBR said that the amount of sales tax so charged and collected by the cotton ginners shall be declared in the monthly returns and shall be deposited as such without any input tax adjustment. The suppliers of cottonseed shall mention sales tax charged under this Chapter separately on the sales tax invoice to be issued by them.
The oil expelling units are using the cottonseed on which sales tax has been charged and collected in the aforesaid manner; they shall be exempted from payment of sales tax on the supplies of oil cake produced from such cottonseed. The ginner shall submit a certificate to the Commissioner having jurisdiction by the 15th of the month following the tax period for the quantity of cottonseed supplied to the growers for sowing purpose, FBR added.
Following is the text of the S.R.O. 188(l)/2015 issued here on Friday:- In exercise of the powers conferred by section 71 of the Sales Tax Act, 1990, read with clauses {9} and (46) of section 2, sections 3 and 4, sub-section (2) of section 6, section 7, section 7A, clause (b) of sub-section (1) of section 8, clause {a) of sub-section {2) of section 13, sub-sections (2A) and (3) of section 22, sections 23 and 60 thereof, and in supersession of its Notification No S.R.O.213(1)/2013 dated March, 2013, the Federal Government is pleased to direct that the following further amendments shall be made in the Sales Tax Special Procedure Rules, 2007, namely:
In the aforesaid Rules,
(a) rule "59", and rule "60", shall be re-numbered as rule 58U and rule 58V, respectively; and
(b) after rule 58V, re-numbered as aforesaid, the following new Chapter XV and rules thereunder shall be added, namely:-
"CHAPTER XV
SPECIAL PROCEDURE FOR SALES TAX ON COTTONSEED OIL EXPELLED BY OIL EXPELLING MILLS AND COMPOSITE UNITS OF GINNING AND EXPELLING
58W. Application.- The provisions of this Chapter shall apply to the persons engaged in supply of cottonseed as well as composite units of cotton ginning and expelling of oil from cottonseed.
58X. Scope and levy of tax.- The sales tax on supply of cottonseed shall be levied and collected on the basis of quantity of cottonseed supplied, or consumed in-house for expelling of oil by composite cotton ginning units.
58Y. Mode, manner and rate applicable for payment of sales tax.-(1) The amount of sales tax chargeable under rule 58X shall be levied and collected at the rate of Rs 6 per 40 kg at the time of supply of cottonseed by cotton ginners for in-house consumption, or to any other registered or unregistered person for the purpose of oil extraction or expelling.
(2) All cotton ginners, if not already registered or required to be registered, shall obtain sales tax registration for the purpose of these rules.
(3) The amount of sales tax so charged and collected by the cotton ginners shall be declared in the monthly returns and shall be deposited as such without any input tax adjustment.
(4) The suppliers of cottonseed shall mention sales tax charged under this Chapter separately on the sales tax invoice to be issued by them.
(5) The oil expelling units using the cottonseed on which sales tax has been charged and collected in the aforesaid manner shall be exempted from payment of sales tax on the supplies of oil cake produced from such cottonseed.
6) The ginner shall submit a certificate to the Commissioner having jurisdiction by the 15th of the month following the tax period for the quantity of cottonseed supplied to the growers for sowing purpose.
58Z. Monthly statement.- Each ginning unit including a composite ginning unit, shall submit to the Commissioner of Inland Revenue having jurisdiction, monthly statement of production and supply of ginned cotton, cottonseed and cottonseed oil in the format set out in Annex-I, by the is'''' day of the month following the tax period.
58ZA. Notice to be given by the ginning unit.-A ginning unit, or as the case may be, a composite ginning unit shall, at the time of commencement of ginning activity and at the time of closure thereof, inform the Commissioner of Inland Revenue having jurisdiction within three days of such commencement or closure, as the case may be.
58ZB. Final statement to be furnished by the ginning unit; (1) Each ginning unit including a composite ginning unit shall, within fifteen days of the cessation of the ginning activity, furnish to the Commissioner of Inland Revenue having jurisdiction, a statement regarding production and supply of ginned cotton, cottonseed, cottonseed oil, oil cake and oil dirt, in the format set out in Annex-J.
(2) Where the cotton ginner or the composite cotton ginning unit fails to furnish any statement or certificate as required under this Chapter, he shall be liable for penal action as provided under serial No 17 of the Table in section 33 of the Sales Tax Act, 1990"; and
(c) after Annex-H, the following new annexure shall be added, it concluded.