ISLAMABAD (November 23 2002) : Taking a major step to broaden the general sales tax (GST) base, the federal tax authorities have launched a countrywide registration drive to bring thousands of local tea manufacturers, traders and suppliers into the tax net.
The Central Board of Revenue (CBR) has estimated a reasonable increase in the sales tax collection probing sales tax data pertaining to the tea industry and simultaneously registering non-filers.
Official sources told Business Recorder on Friday that Lever Brothers Pakistan Limited has conducted a survey (sector study) identifying mushroom growth of tea manufacturers and traders in Pakistan.
While considering this survey as an authentic document the Central Board of Revenue (CBR) prepared a report containing names of manufacturers, traders and tea brands with details of the annual turnover including sales tax related data. The report would be instrumental in bringing more manufactures into tax net.
The CBR has directed all its collectorates to utilise the list of such manufacturers for checking whether they are registered with the sales tax department or not. In case manufacturers are registered, the annual turnover would be verified, while comparing it with the sales tax returns.
The collectors, according to instructions, should immediately take action against such tea manufacturers/suppliers where turnover is above the exemption limit but they are not registered with the department so far.
Sources added that the regional tax authorities could exercise two options under Sales Tax Act, 1990. If a tea manufacturer is not registered, the authorities would compulsorily register such manufactures under section 19 of the Sales Tax Act, 1990.
Secondly, if the manufacturer has annual turnover above the exemption limit of Rs 0.5 million, the department would immediately issue show-cause notice to tea manufacturer for audit.
Tea suppliers with annual turnover above the exemption limit of Rs 1 million would also face sales tax audit.