Commercial exporters: SRO 191, audit condition withdrawn

RECORDER REPORT

KARACHI: The Federal Board of Revenue (FBR) has, in principle, decided to withdraw SRO 191 and an audit condition for commercial importers paying 3 percent value-addition tax with immediate effect.

Sources said that now, FBR would not asked registered persons to collect NTNs or CNICs of unregistered buyers or sellers.

Pereviously, FBR had been pressing registered persons to provide details of unregistered buyers in their monthly sales tax returns.

A round of talks was held between tax officials and industry representatives at the Customs House in Karachi for resolving budget anomalies.

Sources said that successful talks were also held on matters such as SRO 191 and other issues.

Chairman FBR Mumtaz Hyder Rizvi chaired the meeting. FPCCI's Vice-President Shaikh Shakeel Ahmed Dhingra, Chairman of Korangi Association Ehtishamuddin, Mian Zahid Hussain and Shaukat Ahmed attended the meeting.

Sources said that under SRO 191, registered persons were bound to provide copies of CNICs or NTN details of unregistered persons to FBR from June 1 this year. However, registered persons did not agree with FBR's proposal and continually demanded this SRO's withdrawal.

The matter was on top of the meeting's agenda and finally the Chairman FBR announced that SRO 191 would be withdrawn from Thursday (today), the sources said.

Before the announcement of the budget, commercial importers, paying 16 percent sales tax in addition to 3 percent advanced value-addition tax at import stage, were exempted from audit under section 58-E.

However, though SRO 592 (i)/ 2012, FBR abolished Section 58-E in the budget 2012-2013 and announced to conduct audit of commercial importers.

During the meeting, industry representative also raised this issue and called for the removal of the audit condition or 3 percent value-addition tax. After detailed discussion, Chairman FBR also agreed to withdraw audit condition for commercial importers paying 3 percent advance value-addition tax.

In addition, under section 153 (i), FBR asked manufacturers to deposit chalans of 1 percent withholding tax to be received from buyers. Manufacturers are ready to work as withholding tax agents, but they sought some changes in the payment process.

To resolve this issue, the chairman FBR has formed a four-member committee to formulate modalities for collecting withholding tax from buyers via the manufacturing sector.

chief Commissioner RTOII Khwaja Tanveer, Shaikh Shakeel Ahmed, Mian Zahid Hussian and Shaukat Ahmed have been named as members of this committee, which will define the payment procedure.

Under sales tax section, the FBR can demand remaining payment of sales tax within three years, if taxpayers inadvertently deposited short payments. The demand period was raised to five years from three years by FBR in the recent budget.

On the request of industrialists, the FBR chairman also reversed the decision. Now, the FBR can demand payment of the remaining tax amount in three years, but in case of tax fraud, the FBR can demand with in five years.

Industry representatives also sought incentives to spur industrial growth and suggested that on investment of Rs100 million, tax should be collected at 2 percent for three years.