KARACHI: The facility of zero-rating on gas supply extended to 52 companies, manufacturing export goods and registered with the Regional Tax Office (RTO) Karachi, has been halted
The Federal Board of Revenue (FBR) in an order issued here, suspended the facility available to the companies on ‘charges’ of misusing the facility and not filing sales tax returns on a monthly basis.
It is to be noted that through an SRO on June 9, 2007, zero-rated sales tax facility on supplies was provided to five export sectors including leather, textiles, carpets, sports and surgical goods.
Similarly, the FBR through STGO 16/2007 on September 13, 2007, also allowed exemption from sales tax charged on supply of natural gas to these companies.
But it imposed conditions for availing of the facility including the connection should be in the name of a registered person and the bill issued by Sui Southern Gas Company Limited (SSGCL) should carry the name and sales tax registration number of such a person.
The facility was exclusively available for goods manufactured for export purposes.
It has been learnt that the FBR, acting on a request from the Regional Tax Offices (RTOs), suspended the facility.
The FBR has suspended the facility of a company which was not even registered for sales tax. The officials said that the authorities will recover the entire amount that was evaded through this concession.
The FBR directed the Karachi RTOs chief commissioners to coordinate with SSGCL for effective implementation of the suspension. The gas utility has been asked to start charging sales tax on the supply of gas from these 52 units.
It to be mentioned here that the revenue body has started a campaign against misuse of exemptions and concessions by taxpayers available under different notifications of the sales and income tax.
It has already issued similar notification to suspend zero-rated facility on December 27 and disallowed the exemption to 108 companies whom gas was supplied by SNGPL.
