LAHORE: Both the customs and sales tax authorities are wrongfully charging excise duty and sales tax against reprocessing and repacking of already manufactured goods, including the waste products and sterilisation of syringes and needles for medical use, said sources.
They said the department takes the act of reprocessing as manufacturing for the purposes of imposing duties and sales tax without realising that removal of foreign matters from the goods or cleansing the same would not fall within the preview of the term ‘manufacture’.
They further pointed out that the Central Excise Act enlarges the scope of the word manufacturer to such acts, processes, works and repair which may not generally be covered by the word literally.
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As a matter of fact, the word manufacturer includes any process incidental or ancillary to the completion of a manufactured product and any process of re-manufacture, remaking, reconditioning or repair and the process of packing or repacking of such product.
Processes which remove foreign matter from goods complete in themselves and processes which clean goods that are complete in themselves fall within the category of non-manufacturing, they said.
Also they added, it is not necessary that any new article may be produced in this process.
The article may even remain the same but the processing may make it a finished good different in quality or utility from the original one.
A process, in which goods, though remain same, are made marketable and are; therefore, regarded by the purchasing public as different articles having a positive and specific use in their new state, they stressed.
Sources said the definition of the word manufacturer contained in the Central Excise Act is not an absolute one but a qualified one, and thus leaves ample scope for enlarging the scope of the definition. The departmental authorities; therefore, misuse their powers and construe wrong interpretation of reprocessing and repacking activities of already manufactured goods, they said.
Copyright Business Recorder, 2023
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