ISLAMABAD: The Federal Board of Revenue (FBR) has decided to deploy officials at sugar mills for monitoring of production and supply of sugar.
The sources said that the tax offices having jurisdiction over sugar mills would post their officials for the crushing season 2021-2022.
In this regard the FBR would invoke Section 40B of Sales Tax Act, 1990 for physical monitoring of manufacturing and supply of the commodity.
In this regard, tax offices in Lahore have initiated the process for deploying the officials at the sugar mills. The Regional Tax Office (RTO) Lahore has placed its officials at the disposal of chief commissioner Inland Revenue, Large Taxpayers Office (LTO) Lahore.
The sources said that the monitoring would help bringing down retail price of the commodity in the local market.
It is worth mentioning that the sugar prices have gone up to Rs160 per kilogram in some parts of the country. However, as the crushing is coming near the prices have come down.
This year the FBR has planned to document all the supply chain from manufacturing to the retail sale of the sugar.
Through Finance Act, 2021 the treatment of sales tax on supply of sugar was changed and it was brought taxation at the retail price. The FBR through Circular No. 02 of 2021 stated: “Currently, the price of white crystalline sugar is fixed at Rs60 per kg in terms of SRO 812(I)/2016 dated September 02, 2016, which is considerably below the actual market price of the commodity.
“In order to address this anomaly, sugar is proposed to be included in Third Schedule of the Sales Tax Act, 1990, so that sales tax is charged and collected on actual retail price of the product at the manufacturing stage.
“This measure would not only ensure due payment of tax but also help in putting a more effective price control mechanism in place for sugar.”
The rate of sales tax at 17 per cent on retail price was to be applicable on sugar supply from July 01, 2021. However, the implementation was deferred till November 30, 2021. Therefore, the normal sales tax rate on sugar supply will be applicable from December 01, 2021.
Meantime, the FBR has increased the minimum sales tax rate on domestically produced sugar to Rs72.22 per kg from Rs60 per kg.
