ISLAMABAD (June 18 2003) : To bring undocumented sectors of economy within the sales tax net, the Central Board of Revenue (CBR) has asked the surgical instruments manufacturers to pay fixed amount of sales tax at the rate of Rs 5000 per machine/hammer on monthly basis, official sources told here on Tuesday.
On the other hand, Surgical Hammer Owners Association (Shoa), Sialkot, claimed that the sales tax department has on principle agreed to curtail fixed sales tax from Rs 5000 to Rs 2000 per machine/hammer from July 1, 2003.
The issue came to the limelight when the department issued sales tax recovery notices to 4/5 leading undocumented manufacturers of surgical instruments in Sialkot.
However, instead of paying sales tax, the unregistered industry went on strike, closing down all 175 units operating in Sialkot.
After a daylong marathon session with the surgical instruments manufacturers, CBR successfully settled the issue levying fixed tax on these units.
As per agreement, the manufacturers of surgical instruments would pay Rs 2000 per machine monthly and no further notices would be issued to any surgical instruments unit, the Association said.
The association was demanding of the authorities to levy fixed sales tax on the basis of electricity consumption, while sales tax authorities were of the view that the CBR could not check the ongoing large-scale power theft.
Its seemed strange that such a leading undocumented sector, earning huge amounts of profits, was reluctant to get itself registered with the department, officials said.
Meanwhile, Muhammad Arshad, President, and Muhammad Saleem Tahir, general secretary, Shoa, told this corespondent that they are ready to pay fixed amount of sales tax on regular basis and get registered with the sales tax department under the turnover tax regime.
The association has also decided to immediately end strike on the assurance of tax authorities that no further notices would be served.
They said that the credit goes to sales tax authorities who had come with a reasonable sales tax collection formula.
The president and general secretary of the association said that CBR has also agreed not to conduct sales tax audit of these surgical instruments manufacturers, which would be gradually brought under the sales tax regime.
The association would be responsible for registration of this sector and communicate to the tax authorities about the addition/deletion of any manufacturer in the light of their business circumstances.