ISLAMABAD: The Federal Board of Revenue (FBR) for the first time will not fix a minimum value on the supply of sugar for the purpose of sales tax calculation.
Sources told that the FBR has yet not fixed the domestic price of sugar, which is usually considerably below the actual market price of the commodity for sales tax assessment. However, the delay in the fixation of the price of sugar will result in revenue loss to the national exchequer.
Last year, the FBR issued a notification dealing with the fixation of the value of sugar for the assessment of sales tax at the domestic and import stages. As per the Lahore High Court (LHC) order, the proceedings before the FBR regarding the determination of the value of the supply of sugar shall remain suspended. Thus, the FBR will not fix the said price of the commodity till the final decision of the court.
The Pakistan Sugar Mills Association (PSMA) had written three letters to the FBR for a personal hearing in the matter of the fixation of the minimum value on the supply of sugar.
The sugar mills have informed the court that the FBR is not empowered to fix a notional value that is completely different from the market value currently prevalent. This impinges upon the rights of the petitioners to conduct their business and trade in terms of Article 18 of the Constitution.
In a communication to the FBR, the PSMA proposed that there should be no minimum value for the fixation of sugar. Furthermore, input/proposals have been again sought by the FBR for sugar value fixation. The industry pleaded that the FBR cannot exercise unbridled, unstructured, and discretionary power under proviso to section 2(46) of the Sales Tax Act to fix ex-mill sugar value.
