FinanceNews

CBR starts probe against units with low value-addition

ISLAMABAD (December 13 2003): The Central Board of Revenue (CBR) has launched a countrywide investigation drive against manufacturers showing less 'value-addition' to avoid payment of general sales tax (GST).

These companies are power producing units, also a leading independent power producer (IPP), textile and spinning mills, oil processing companies, weaving units, steel re-rolling mills, paper and paperboard units, packing units, plastic and poly-bags manufacturers and engineering companies.

Sources told Business Recorder here on Friday that CBR's 'Information System' has detected these units by analysing sales tax data of registered persons allegedly involved in showing less value-addition.

Hundreds of manufacturers are showing value-addition less than 4 percent, which is cause of alarm for the tax authorities.

According to sources, units showing more 'value-addition' pay more sales tax as compared to units showing less value-addition.

The authorities have directed all collectors of sales tax that CBR analysis involves multiple processes, which require comparison with the sales tax returns' record at the collectorates.

In case of any discrepancy, the collectors should intimate it to the Board.

However, in cases where CBR data matches with the return, the list of such units should be handed over to the concerned collector for further scrutiny of tax record.

CBR has given following details of units to the collectors for further investigation: local sale, taxable sale, local purchase, sales tax carry forward and value-addition in percentage.

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