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Revenue Board directs jewellers to pay sales tax or face legal action

ISLAMABAD (April 25 2003) : The Central Board of Revenue (CBR) has directed the jewellers to honestly pay sales tax on the basis of declarations made to the Income Tax Department or face legal action under Sales Tax Act, 1990.

Official sources told Business Recorder that the CBR would neither withdrew notices served on the jewellers nor suspend adjudicating proceedings against leading jewellers.

However, the CBR has given another incentive to the jewellers to form committees within the community for ascertaining actual amount of sales tax to be paid by them.

The jewellers were required to pay sales tax for fiscal 2001-03 using two options. First, they may deposit sales tax as per income tax declarations made for fiscal 2001-02.

Secondly, jewellers may themselves work out the sales tax for the first nine months of the current fiscal on the basis of shops size, utility charges and number of workers and deposit reasonable tax on manufacturing charges, excluding gold.

“The CBR would not spare big jewellers, who were reluctant to get registered and pay sales tax,” the officials maintained.

Meanwhile, Member Sales Tax Ramzan Bhatti, representatives of All Pakistan Sarafa Association Supreme Council, Hyderabad, and other senior tax officials held marathon session here on Thursday to discuss procedure for payment of sales tax.

Sources said that the CBR had already given a number of concessions to the jewellers as the special procedure for GST collection from jewellers was issued in view of the proposals submitted by the stakeholders.

The tax officials and jewellers jointly made the rules in the past and mutually reached an agreement for payment of sales tax.

Now, it was the responsibility of the jewellers to adhere to the commitment, but unfortunately, they have not paid any tax which forced the tax authorities to issue notices for recovery of sales tax.

The jewellers community has not provided any proper justification for withdrawal of notices or suspension of adjudication proceedings.

The concerned associations took responsibility to get register big jewellery shops as well as collect sales tax from them, but the representative bodies failed to do so.

Hence, the CBR has left with no other option but to compulsorily register jewellers and take strict action against those who decline to pay principal amount, additional tax and penalties.

On the other hand, jewellers, who attended the meeting, said that the meeting failed to reach any consensus.

The CBR asked the jewellers to pay all the outstanding sales tax with effect from July 1, 2001 to avoid additional tax and penalties.

In this regard, the jewellers should have to give an undertaking to the CBR.

The jewellers said the agreement signed between them and the tax authorities specified that the registration of jewellers community would be the responsibility of their respective associations.

Whereas, the CBR has violated the agreement by starting compulsorily registration drive.

The jewellers also said that they were ready to come within the GST regime in case the CBR withdrew notices pertaining to compulsorily registration.

However, they said, the CBR has not shown its willingness to withdrew these notices.

The authorities have threatened that in case jewellers failed to comply, the CBR would not only collect additional tax and penalties, but also arrest jewellers to recover the outstanding amount, jewellers maintained.

In order to devise a new strategy to deal with the existing situation, the jewellers would call a countrywide meeting to chalk out future course of action.

Meanwhile, the jewellers are also making efforts to meet Prime Minister Mir Zafarullah Khan Jamali and hoped that a meeting between the association and PM would soon take place.

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