KARACHI: By invoking the enforcement provisions of Sales Tax Act, 1990, the Federal Board of Revenue has moved against 44 ship-breakers for the recovery of outstanding dues of sales tax.
The Directorate General of Intelligence and Investigation Inland Revenue has provided list of these companies to Large Taxpayer Unit (LTU) Karachi and Regional Tax Offices (RTOs) to ensure the recovery.
The board has also provided names of ship-breakers, their NTNs, names of vessels and sales tax liability to the field staff to facilitate for the recovery process. The LTU/RTOs have also been directed to opt for appropriate action under Sales Tax Act, 1990.
On the other hand, the directorate has prepared two lists of the registered ship-breakers, the first list is for the period of July 1, 2007 to June 1, 2012. The second list is from June 2, 2012 to December 29, 2012.
As per data, the ship-breakers paid Rs 13.136 billion out of Rs 13.917 billion outstanding amount for the period July 1, 2007 to June 1, 2012 whereas the remaining amount of Rs 781 million is yet to be recovered. From June 2, 2012 to December 29, 2012, the balance sales tax liability of the ship-breakers has been estimated at around Rs 2 billion.
The procedure for revenue collection from ship-breakers is provided in Special Procedure Rules under which Sales Tax is leviable on breaking of ships instead of release at import stage. The 70.5 percent of weight (tonnage) of ship/vessel determined at import stage is considered as ship plates. The Sales Tax liability presently is calculated at Rs 4,848 per ton of ship plate. When the ship/vessel is beached for breaking, the Sales Tax determined on the basis of above calculation is deferred and secured against post dated cheques in the concerned RTOs for subsequent payment of tax.
