The Federal Board of Revenue (FBR) has taken strict enforcement measures to restrict the movement of goods including foam, ghee, cooking oil, iron and steel products, and cosmetics manufactured in tax-exempt areas into the tariff areas of Pakistan.
Official sources told Propakistani here on Thursday that the measures will also stop the smuggling of these goods from the tax-exempt areas to the tariff areas of Pakistan. Additionally, the goods manufactured in the tax-exempt areas of Azad Jammu and Kashmir (AJK), Gilgit-Baltistan (GB), and the tribal areas must be sold within the territorial jurisdiction of the said areas.
Conversely, the documented manufacturers in Pakistan have to pay full duties and taxes on these goods as per the federal tax laws. If the manufacturers from the tax-exempt areas want to sell goods in Pakistan, they must follow the FBR’s new procedure of ‘registration and liability of persons bringing taxable goods from tax-exempt areas’.
An official added that the tax-exempt units of foam, ghee, cooking oil, iron and steel products, and cosmetics established in the tax-exempt areas have an advantage over the units operating in Pakistan. These factories and manufacturing units in the tax-exempt areas of AJK, GB, and the tribal areas are now allowed to sell their tax-exempted goods in Pakistan. The new procedure will ensure the registration of goods and vehicles from these non-tariff areas into the tariff areas of Pakistan.
In this regard, persons bringing taxable goods from the tax-exempt areas of AJK, GB, and the tribal areas to the taxable areas of Pakistan must be registered under the Sales Tax Act, 1990 of the FBR.
A person bringing taxable goods from a tax-exempt area is required to be registered under the Sales Tax Act, 1990 or the Act as adopted in AJK and all the provisions of the Acts ibid will be applied accordingly.
The person bringing taxable goods from the tax-exempt area and supplying the same in the taxable area in the course and the furtherance of a taxable activity is liable to pay either tax or taxes and furnish the prescribed documents.
A registered person will be entitled to the adjustment of any input tax paid under the Sales Tax Act, 1990 as adopted in AJK, subject to the applicable provisions of the Act and the rules made thereunder,
Every registered person bringing, or causing to bring taxable goods from the tax-exempt areas into a taxable area, in the course and furtherance of taxable activity, will log into the FBR’s computerized system and electronically generate e-transport advice with a unique identification number in the form specified in STR 32. The e-transport advice will be issued prior to entry of the taxable goods into the taxable area.
The Board may specify the location and the other necessary particulars of the check-posts, including mobile teams, if any, through a notification in the Official Gazette.
The Chief Commissioners Inland Revenue of the Regional Tax Office (RTO) Peshawar, the RTO Abbottabad, the RTO Rawalpindi, the RTO Sialkot, and the RTO Quetta, or any other RTO that has jurisdiction over the areas adjoining the tax-exempt areas will establish a check-post or check-posts as notified by the Board under sub-rule (1) within the relevant regional territorial jurisdiction.
Every conveyance entering into a taxable area from the tax-exempt areas and carrying any taxable goods (including goods either deemed prima facie or suspected to be taxable) at the check-posts will be subjected to scrutiny by the authorized officer.
The FBR maintained that on the basis of credible information, mobile teams may intercept, examine, and search any conveyance on the routes emanating from the tax-exempt areas and all the relevant provisions of the Act, and these rules shall apply accordingly.
Every registered person bringing taxable goods from the tax-exempt areas into a taxable area in the course and furtherance of taxable activity will log into the FBR’s computerized system and electronically generate e-transport advice with a unique identification number in the form specified in STR-32 form. The e-transport advice will be issued prior to the entry of the taxable goods into the taxable area.
The FBR’s procedure added that a registered person will only be allowed to generate e-transport advice if he is not blacklisted or suspended under Section 21 of the Sales Tax Act and has filed a return under Section 26 thereof by the due date for the last two immediately preceding tax periods.