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ISLAMABAD: The Federal Board of Revenue (FBR) has started seizing the sugar bags from warehouses and premises of dealers, which were cleared without affixation of tax stamps/unique identification marking (UIMs) under the track and trace system (TTS).

The FBR Sunday launched an operation against the non-compliant sugar mills involved in clearing sugar bags without affixation of tax stamps.

Inland Revenue Enforcement Network (IREN) Squad of Directorate of Intelligence & Investigation (I&I)-IR, Hyderabad, in a major counter-tax evasion operation, has seized 172 sugar bags, which were found without affixation of tax stamps from one warehouse.

In compliance of STGO 05 of 2021 dated November 11, 2021 issued by Project Director, (Track & Trace System) and specific directions of Member-IR (Operations), FBR Islamabad, and Dr Amir Talpur, Director General I&I (IR) Islamabad, the team of Directorate of I&I (IR) Hyderabad (IREN) visited area of Tower Market Hyderabad to check sugar dealers. The IREN team visited 12 warehouses and checked stock of sugar bags manufactured by various sugar mills during crushing season 2021-22. The team found sugar bags manufactured by three sugar mills including M/s Chambar Sugar Mills stocked in premises of afore-stated dealers. The sugar bags manufactured by two sugar mills were found affixed with Tax Stamps.

However, stock of 172 sugar bags manufactured by M/s Chamber Sugar Mills lying in the premises of M/s Gulzar & Co, Hyderabad were found without affixing of Tax Stamps. The team seized the stock of 172 sugar bags in violation of Section 40C of the Sales Tax Act, 1990, STGO 5 of 2021 and Sales Tax Rules, 2006 for initiating legal action against M/s Chamber Sugar Mill and the dealer in accordance with the relevant provisions of law.

No sugar bag can be removed if it’s not carrying tax stamp, UIM

It is pertinent to mention that IREN teams have conducted similar raids on sugar dealers in Lahore and Rawalpindi but found no violation as all bags of sugar were properly stamped under TTS. This, of course, is a healthy sign which reflects positively on tax compliance in sugar sector.

Dr. Muhammad Ashfaq Ahmed, Chairman, FBR has appreciated the raiding team led by Dr. Abdul Rehman Rind. He announced special reward for the members of the raiding squad and encouraged them to continue working with full commitment and integrity. He also appreciated Project Director and his enforcement drive to curb supply of untaxed goods.

Through the Sales Tax General Order 5 of 2021, Federal Board of Revenue (FBR) had imposed a ban on all sugar mills for removing sugar bags from factories/production sites/manufacturing plants without affixation of tax stamps/unique identification marking (UIMs). Sugar mills are bound to only obtain tax stamps/UIMs only from the FBR’s Licensee M/s AJCL/MITAS/Authentix Consortium.

According to the FBR’s order, the order has been issued for the implementation of Track and Trace System under SRO 250/2019.

The provisions of Section 40C(2) of the Sales Tax Act, 1990 read with Rule 150ZF of the Sales Tax Rules, 2006 mandate the FBR to notify the date for the implementation of electronic monitoring of production and sales of goods in the manner prescribed in the law on all manufacturing sites of notified sectors.

In exercise of the powers conferred under Section 40C (2) of the Sales tax Act, 1990 and Rule 150ZF of the Sales Tax Rules, 2006, it is notified that no sugar bags shall be allowed to be removed from a production site, factory premises or manufacturing plant without affixation of tax stamps/UIMs with effect from November 11, 2021, which are to be obtained/procured from the FBR’s Licensee M/s AJCL/MITAS/Authentix Consortium. This issues with the approval of the competent authority, member Inland Revenue Operations, FBR, Islamabad, the FBR added.

It is further added that Prime Minister of Pakistan had recently inaugurated TTS on sugar sector on November 23, 2021 and repeatedly expressed his resolve to ensure implementation of Track and Trace System with full force and curb movement and supply of untaxed sugar stock in Pakistan. Chairman FBR has re-iterated his resolve not to allow movement of any products of TTS-covered sectors on the roads and their sale in the market which do not bear activated tax stamps.

Dr. Qaiser Iqbal, Member IR- Operations, FBR Islamabad also appreciated the IREN staff and the project team for their successful action in Hyderabad.

He said that it is expected that over the next few months implementation of Track & Trace System, coupled with IREN’s valiant drive would help overcome the menace of illicit and non-tax paid sugar stock in the market and translate into maximizing the revenue potential.

Copyright Business Recorder, 2021


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