ISLAMABAD: The Engineering Development Board (EDB) has proposed a fixed tax on sugar mills having equipped with bagasse-based/self-generation power plants in the budget for fiscal year 2014-15.
The proposal is related to the imposition of sales tax on captive power generation based on bagasse. The sugar mills having captive power plants for electricity generation based on bagasse be subjected to a fixed tax on the basis of each plant’s capacity, since some sugar mills have started planning the establishment steel furnaces and are not paying sales tax which is around Rs4,500, leaving the competitors uncompetitive.
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It is suggested that sales tax be charged from such sugar mills having furnaces established & running on bagasse/self generation, assuring their production at 75 percent of transformer capacity. In case of shutdown/restart, the same be intimated in writing along with re-confirmation from EDB/PSMA/& FBR and would be subject to monitoring.
The FBR has also received a proposal of the EDB on the impact of changes in sales tax in budget 2012-13 – supply of goods through international tenders.
According to the proposal, the manufacturers of engineering goods have informed that in recent amendments in the Sales Tax Act 1990, the status of supply against International Tenders has been shifted from “Zero rating” to “Exempt” by omitting Serial No. 4 “Supplies against International Tenders” from the Fifth Schedule (Section 4 of the Sales Tax Act) and by adding the same as Serial No. 12 in Table II of the Sixth Schedule under Section 13 of the Sates Tax Act.
