ISLAMABAD: The Federal Board of Revenue has started the process of implementing the Track and Trace (T&T) system in the beverage sector for real-time monitoring of the production and sales of beverages.
Sources informed that the beverage industry uses glass bottles, pet bottles and tetra packs for packing of its products. The tax department wants that each bottle or package should be verifiable through scanning besides the production data of each beverage unit should be made available to the FBR’s database in real-time.
Sources said that FBR Inland Revenue and Customs Intelligence as well as IREN directorates; ongoing crackdown not only helped with the affixation of around three billion tax stamps on cigarette packets, sugar as well as fertilizer bags, but also brought most of the local tobacco manufacturers under TTS’s fold.
Beverage industry urges govt to withdraw additional FED
Since the Islamabad High Court quashed all the pending petitions filed by local tobacco players on the implementation of T&T and now the local tobacco players are in communication with the FBR for the signing of TPAs and implementation of TTS.
On the other hand, the Central Board of Revenue AJK has also instructed directed all cigarette manufacturers in the AJK to install the Track and Trace system (latest manual/automatic applicators including tax stickers/stamps) in their units by August 1, 2023. After the said deadline, Pakistani tax authorities will not allow cigarette packs without tax stamps within the territorial jurisdiction of the country. Moreover, the clearance of their products will be halted followed by the initiation of legal action, including closure under the rules of the units concerned.
As per the data of FBR, there was a 13 per cent growth witnessed in revenue from the tobacco sector after the implementation of Track and Trace. The FBR has collected Rs149 billion from July to May 2023 which was Rs132.32 billion in the first 11 months of FY2022.Similarly, The FBR has so far implemented T&T solution on 79 sugar facilities and 136production lines.
According to FBR, sales tax collection from sugar sector during the crushing season (December 2021–March 2022) under Track and Trade System amounted to Rs26.03billion as compared to the corresponding period of the previous crushing season which stood at Rs19.9 billion, showing an increase of 31 per cent in four months only.
Furthermore, the tax department has so far implemented T&T solution in 11 fertiliser facilities and 78 production lines and with the implementation of sales tax, there will be a surge in revenue from the fertilizer sector after the imposition of five percent FED on DAP during 2023-24.
Sources said that some sugar mills and fertilizer plants are not addressing issues with regard to site readiness and non-compliance Operations as well as maintenance SOPs.
Furthermore, there is also a lack of ownership of T&T by the sugar and fertilizer units as T&T system lies without proper protection which affects the system.
Besides, the cement sector is repeatedly delaying the implementation of the T&T system to avoid monitoring of sales production and stock positions.
Recently, the FBR has deputed its teams in big cement companies for monitoring of sales production and stock positions under section 40B of the Sales Tax Act on the reports that the cement sector is allegedly involved in tax evasion by under reporting its production and sales.
Copyright Business Recorder, 2023
Comments
Comments are closed for this article.