Importers to get exemption of sales tax audit

The CBR has introduced a new scheme for the importers to get exemption of routine sales tax audit.
In order to improve revenue collection, an optional incentive-based scheme is being proposed that commercial importers, who make up-front payment of sales tax on minimum 14 percent value-addition would not be subjected to routine audit of sales tax.
Similarly, the CBR has also devised a new scheme for improved revenue collection from the steel melters and re-rollers, on basis of value addition. The proposed measure is likely to result in increased revenue from this sector, remove distortions and reduce the discretionary powers of the auditors as well as allegations of harassment and corruption.
The CBR has given exemption from sales tax on imports/purchases of plant and equipment by civil society organisation, hospitals and educational institutions. This measure will go a long way in improving the quality of health and education services and in encouraging the social welfare works of the civil society organisations.
Keeping in view the need for documentation as well as adaptation of the law to business realities, it is proposed to substitute Section 73 in the Sales Tax Act, 1990 so that the practical difficulties in implementation are removed and the process of documentation of the economy continues smoothly. At the same time, it is proposed to amend Section 7 to allow registered persons to adjust input tax on accrual basis.
In a major revenue measure, the CBR has withdrawn sales tax exemption from cottonseed and crude vegetable oil obtained therefrom. Exemption of sales tax from cottonseed and its oil not only deprives the public exchequer of its legitimate revenue but also de-links the proper accounting of its consumption in the production of vegetable ghee/cooking oil. Accordingly, it is proposed to levy sales tax at the rate of 15 percent on supply of cottonseed, cottonseed oil and oil dirt/sludge.
However, to ensure price stability, it is proposed to zero-rate supply of oil cake so that oil expellers are able to claim required input adjustment without increase in price of this essential item for the livestock and poultry feed industries.