Central Board of Revenue (CBR) Chairman Abdullah Yousuf has assured the steel importers of his support by pledging that he will look into the matter of Sales Tax and other taxes.
Steel importers told the CBR chief that the enhancement of Sales Tax on raw material of iron & steel from 15 percent to 20 percent in the budget proposal 2007-2008 has created chaos in the steel market. The costs of steel items have seen unprecedented increase. Further, it has also resulted in an anomaly due to various rates of customs duties on iron & steel items.
In order to sort out the matter, a four-member delegation of Pakistan Iron & Steel Merchants Association (Pisma) held a meeting with Abdullah Yousuf, chairman CBR, on Thursday.
Another meeting of steel importers with CBR chairman will be held on Monday. The delegation informed the CBR chairman that in the budget the rate of Sales Tax has been increased from 15 percent to 20 percent on raw material of iron steel items.
According to this, enhancement should only be applicable on industrial raw material where the customs duties are charged from zero percent to 10 percent. The anomaly is that some of the steel products on which the duty is charged as finished products, ie 20-25 percent have also been incorporated in this enhancement of sales tax as industrial raw material.
The delegation suggested that the rate of customs duty on all iron steel items should be subject to a maximum 10 percent as it is a basic raw material for engineering industry.
Silicon sheet/coil whose rate of duty is 5 percent used by fan industry, in this regard it is suggested that only the import of prime material silicon sheet/coil used by the Fan industry should not be allowed higher than their respective capacity.
Regarding withholding tax at the import stage, the Pisma delegation informed the CBR chairman that there is a big difference of 4 percent withholding tax between commercial importers and industrial consumers. The "so-called" industrial consumers are constantly misusing the facility and are selling entire material in the market and making huge profit at the cost of the national exchequer. They suggested that the withholding tax at the rate of @ 2 percent should be levied on commercial importers.
The audit of the commercial importers was also discussed and it was requested that the regime of charging 10 percent value addition of sales tax at customs stage may be continued and the importers falling under this category may be exempted from audit of sales tax. The CBR chairman promised to look into the matter.-PR
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