Steel re-rolling mills: Tax authorities ignoring special procedure for tax collection?

LAHORE: Tax authorities are accused of ignoring amendments to the sales tax law devising special procedure for steel re-rolling mills.

Sources said the field formations were charging steel re-rolling mills sales tax against their final discharge of liability while ignoring amendments to the law.

According to the sources, sales tax special procedures rules have been enacted for steel re-rolling mills which contain an overriding clause prevailing over general charging of sales tax. A particular rate and mechanism for the imposition of sales tax on steel re-rollers has been prescribed in the rules as a final discharge of tax liability.

They said the tax authorities in the field formations take advantage of extensive changes in tax laws almost every year by avoiding reproducing relevant provisions of the law at the relevant time in order to show their performance in tax collection. Interestingly, they said, the tax authorities also contest their stance on wrongly quoted provisions of the law at the appellate forums, resulting into wastage of precious time of the adjudication forums.

According to the special procedure, every steel-melter, steel re-roller and composite unit of steel-melting and re-rolling (having single electricity meter), would pay sales tax at the rate of eight rupees per unit of electricity consumed for the production of steel bullets, ingots and mild steel products excluding stainless steel, which will be considered their final discharge of sales tax liability. Payment of the tax liability is supposed to be paid through electricity bills along with electricity charges.

However, the tax authorities rely upon the amendments made to the law subsequent to the special procedure, which contains an overriding effect of the general charge of sales tax.

According to the sources, the tax authorities rely upon a previous case law, where such disputed points had never been raised in the tax reference. In addition, said the sources, the tax years under consideration were not mentioned in that particular case. Therefore, it cannot be started with any certainty which was applicable at that particular time, they added.

Copyright Business Recorder, 2024