Video-monitoring system to be installed at units

SOHAIL SARFRAZ

ISLAMABAD: The sales tax and federal excise duty payments by manufacturers of fertilizer, cigarettes, cement, sugar and beverage would be checked through electronic/video-monitoring system to be installed at their manufacturing units in 2013-14.

Sources told Business Recorder here on Tuesday that the Federal Board of Revenue (FBR) is planning to install electronic/video-monitoring systems at fertilizer, cigarettes, cement, sugar and beverages manufacturers’ premises to check the actual sales/clearances during 2013-14.

Sources told Business Recorder here on Tuesday that the FBR has identified these sectors for the purpose of electronic monitoring during current fiscal year. Following approval of the competent authority, the FBR will notify sectors, ie, fertiliser, cigarettes, cement, sugar and beverage for monitoring/tracking of manufacturing activities, sales, clearances, etc, through electronic or other means.

The measure has been enforced through Finance Act, 2013 through amendments in the Sales Tax Act, 1990 and Federal Excise Act, 2005. It is expected that the FBR will initially implement the system at the manufacturing premises of the cigarette industry. Later, the system would be extended to other sectors like cement, sugar and beverages.

The government had introduced the new concept of ‘electronic/video-monitoring system’ at manufacturers’ premises in budget (2013-14) to check actual sales/production of goods for improving sales tax and federal excise duty collection.

Sources said that it is a general perception that neither the revenue collected is commensurate to the actual sales/production of goods in the country nor there is any system in place to check under-reporting of production by registered persons. In order to check this phenomenon of under-reporting, it has been decided that monitoring with the help of modern technological tools such as electronic monitoring, video monitoring, tax stamps, labels, etc, may be introduced.

Sources said that the Finance Act 2013 had amended Sales Tax Act, 1990 to introduce the new concept of electronic/video monitoring system. According to section 40C in the Sales Tax Act, after section 40B, the following new sub-section shall be added, namely:- “40C. Monitoring or tracking by electronic or other means? 1) Subject to such conditions, restrictions and procedures, as it may deem fit to impose or specify, the Board may, by notification in the official gazette, specify any registered person or class of registered persons or any good or class of goods in respect of which monitoring or tracking of production, sales, clearances, stocks or any other related activity may be implemented through electronic or other means as may be prescribed.

(2) From such date as may be prescribed by the Board, no taxable goods shall be removed or sold by the manufacturer or any other person without affixing tax stamp, stickers, labels, etc in any such form, style and manner as may be prescribed by the Board on this behalf,” it added.