The Federal Board of Revenue (FBR) has directed steel melting and re-rolling mills to submit consumer number of electricity meters and electricity units consumed during month (kWh) to collect actual excise duty in sales tax mode payable and verify electricity consumption with the distribution companies (DISCOs).
The FBR has issued SRO 295(I)/2020 to amend the Sales Tax Rules, 2006 here on Wednesday. According to sources, the steel melters and re-rollers are not accurately declaring their consumption of electricity.
Sources said that the FBR had fixed minimum production criteria for steel products determined as per criterion specified.
The production criteria for steel billets and ingots is one metric ton per 700 kWh of electricity consumed.
The FBR has fixed production criteria for steel bars and other re-rolled long profiles of steel at one metric ton per 110kwh of electricity consumed.
The FBR has fixed production criteria for ship plates and other re-rollable scrap at 85 percent of the weight of the vessel imported for breaking.
Sources said that the declaration of the consumer number of electricity meters and electricity units consumed during month (kwh) would help the tax department to verify electricity consumption of steel melting and re-rolling mills with the DISCOs on regular basis.
The FBR said that the minimum production for a month shall be determined on the basis of a single or more inputs as consumed in the production process as per criterion specified in the Fourth Schedule and if minimum production so determined exceeds the actual supplies for the month, such minimum production shall be treated as quantity supplied during the month and the liability to pay duty shall be discharged accordingly.
Both actual and minimum production, and the local supplies shall be declared in the monthly return.
In case, the minimum production exceeds actual supplies for the month, the liability to pay duty shall be discharged on the basis of minimum production: provided that in case, in a subsequent month, the actual supplies exceed the minimum production, the registered person shall be entitled to get adjustment of excess duty on account of excess of minimum production over actual supplies: provided further that in a full year, as per financial year of the company or registered person, or period starting from July to June next year, in other cases, the duty actually paid shall not be less than the liability determined on the basis of minimum production for that year and in case of excess payment no refund shall be admissible, the FBR said.
In case of ship-breaking, the liability against minimum production, or actual supplies, whichever is higher, shall be deposited on monthly basis on proportionate basis depending upon the time required to break the vessel.
The payment of the FED on ship plates in aforesaid manner does not absolve ship breakers of any tax liability in respect of items other than ship plates obtained by ship-breaking.
The melters and re-rollers employing self-generated power shall install a tamperproof meter for measuring their consumption.
Such meter shall be duly locked in room with keys in the custody of a nominee of the Commissioner Inland Revenue having jurisdiction.
The officers Inland Revenue having jurisdiction shall have full access to such meter.
The minimum production of industrial units employing both distributed power and self-generated power shall be determined on the basis of total electricity consumption, the FBR added.