Import of plant, machinery and equipment: new provision for ST refunds to be introduced

The Federal Board of Revenue (FBR) will introduce a new provision in the Sales Tax Act 1990 to allow speedy payment of sales tax refund on import of plant, machinery and equipment within minimum possible time period.
Sources told Business Recorder here on Sunday that the decision had been taken in the last meeting of the Tax Reform Co-ordination Group (TRCG) held at the Ministry of Finance. The FBR has communicated the decisions of the TRCG to all its members for implementation as per time frame agreed by the group.
According to major decisions taken in the last meeting of the TRCG, a provision is to be created in the law to ensure that refund of sales tax on import of plant, machinery and equipment is processed within a short time frame eg one to two months. The Board had withdrawn sales tax zero-rating on the import of plant, machinery and equipment.
Secondly, the Expeditious Refund System (ERS) would be extended to the zero-rated sectors, commercial exporters and domestic refunds in the next phase. Currently, it is mandatory for the manufacturers-cum-exporters to obtain refund under the electronic system. Now the decision is to the extend the ERS to textile, leather, surgical, sports and carpet industries, commercial exporters and any refund in case generated on domestic stages. Thirdly, in an effort to register people for sales tax, manufacturers and importers will be asked to provide details of wholesalers and distributors who buy from them in the prescribed annex in the return, in the first phase. Under the decision, the FBR will ask the registered manufacturers and importers to provide particulars of the wholesalers and distributors for bringing them into the sales tax net. In the second phase, the FBR will acquire more data from other categories of registered persons within the supply chain as admissible under the law.