KARACHI: The Federal Board of Revenue (FBR) has issued procedure to avail of zero-rated sales tax facility on purchase of fuel by five export sectors.
The zero-rated sales tax facility has been allowed on the purchase of furnace oil, diesel and coal by the registered manufacturers of the five sectors.
The FBR said that the companies desired to avail of the facility should submit a request to the tax offices concerned. The tax offices should recommend approval or disapproval on the request within 30 days.
The revenue board said that zero-rated facility on furnace oil, diesel and coal would be withdrawn in cases where the registered person availing of the facility became untitled, ineligible due to the reasons, which included the business has been closed down; the business or premises has been sold out or to some other persons; the lease of the premises, where the generators/boilers are installed, has expired; the registered person has left the premises where generators/boilers are installed or has shifted to some other locations, etc.
As per the new rules, upon receipt of an application for zero-rating on furnace oil,diesel oil & coal from the registered manufacturers of the five sectors, the large taxpayers unit (LTU) or regional tax office (RTO) having jurisdiction will complete the process of physical and other necessary verifications and the Chief Commissioner Inland Revenue will, within thirty days of receipt of such letter, furnish a report conveying his express recommendation for grant of zero-rating or otherwise.
While forwarding the cases to the Board, it shall be ensured that settled CREST discrepancies are properly updated. The cases not fulfilling the requirements as specified shall not be recommended for zero-rating.
The Board within thirty days of receipt of such report from the concerned LTU/RTO, either issue a General Order for zero-rating for the applicant, or reject the request, as it may deem fit.
However, in case the report from LTU/RTO is deficient in any respect, or the Board requires further clarification on any aspect of the case, it may cause such further scrutiny or inquiry as it may require, to be completed within the time frame.
In case it is detected that a person has obtained zero-rating facility on the basis of any misrepresentation, or after obtaining zero-rating, he misuses the facility by way of supply of zero-rating furnace oil , diesel oil & coal to any other person, or uses it for any purpose other than for the manufacture of goods specified in S.R.O. 1125(1)/2011, the zero-rating shall forthwith be withdrawn ab-initio, and action shall be taken to recover the amount of sales tax chargeable on such zero-rated furnace oil , diesel oil & coal along with penalty and default surcharge.
The zero-rating facility on furnace oil , diesel oil & coal shall also be withdrawn in cases where the registered person availing the facility becomes ineligible, due to any of the following reasons; (a) the business has been closed down; (b) the business or premises has been sold out or to some other person; (c) the lease of the premises, where the generators / boilers are installed, has expired; (d) the registered person has left the premises where generators / boilers are installed or has shifted to some other location; (e) the registered person is a null, nil, non-filer and not an active taxpayer; (0 the registered person is making supplies to and from suspended / black-listed unit or his supplies and corresponding input tax credit are not verified; (g) inadmissible input tax credits have been claimed; (h) outstanding recoverable demand is not paid despite recovery notices; (i) The electricity generated through such generators / boilers is being shared with another person.
