ISLAMABAD: The Federal Board of Revenue (FBR) has decided to establish Inland Revenue Enforcement Network (IREN) checkpoints to provide foolproof monitoring of exit points from tax-free areas, i.e. – say the former tribal areas under federal administration (Fata) and the tribal areas under provincial administration. Zones (Pata) to taxable territories.
In this regard, the FBR issued Circular No.3 of 2021 (Operations), here on Tuesday.
According to the procedure, a number of important amendments were introduced via the Finance Law of 2021, in the Sales Tax Law of 1990 (STA, 1990) applicable to various industries located in the former regions of Fata / Pata .
The most significant change brought about by the 2021 finance law concerns the new entry No. 74 added in the 8th annex to the 1990 STA, to levy a sales tax of 16 percent on all “Goods supplied by zones of old Fata / Pata to taxable areas. ”
Fata / Pata tax-exempt zones: 16 pc of GST levied on goods delivered to taxable zones
As a result, a person domiciled in Fata / Pata having the status of “active taxpayer” under Article 2 (1) of the STA, 1990, would continue to import raw materials for consumption at their own manufacturing site against deposit. post-dated checks (PDC) based on its determined installed production capacity.
Import, transport, exemption (from income tax at the import stage) and consumption of raw materials have been meticulously dealt with with FBR 2021 CGO No. 1, Circular No. 5 of 2021, circular n ° 9 of 2021 and circular n ° 13 of 2021, which remain applicable.
In order to facilitate the operationalization of the benefits provided by law, industrial units domiciled in Fata / Pata can acquire an Installed Capacity Determination Certificate (ICDC) from the Khyber-Pakhtunkhwa Department of Industries or the government Ministry of Industries. from Pakistan.
Purchases made from persons in Fata, Pata not subject to GST: ATIR
The Commissioner concerned accepts the ICDC presented until he has reason to believe that the actual installed capacity is less than the determined and certified capacity.
It goes without saying that only value-added goods should be imported and not finished products, argued the RBF.
In order to undertake foolproof surveillance of exit points from non-taxable to taxable territories, IREN checkpoints under section 40D of the STA, 1990 are established and functionalized to ensure that the tax due is paid. at the rate of 16% on goods delivered in taxable territories.
The Peshawar Regional Tax Office will also establish a Tax Office in Malakand Division for the prompt release of consignments, the processing of consumption and exemption certificates and the effective and prompt implementation of the law in the letter and mind, the RBF added.
Copyright Business Recorder, 2021