ISLAMABAD (May 06 2003) : In a bid to provide further tax relief to textile industry, the Central Board of Revenue (CBR) is seriously considering to continue exemption of 3 percent additional sales tax ('further tax') to manufacturers-cum-suppliers of 'spun' yarn.
Three percent 'further tax' on the yarn sector is due from May 1, 2003, following expiry of SRO 966(I)/2002, which granted exemption from January 1 to April 30, 2003.
In case the CBR extends the benefit to concerned industry under 'Special Procedure for Manufacturers-cum-Suppliers of Spun Yarn Rules 2002', 121 textile units would again be able to enjoy exemption of 'further tax' from May 1, 2003.
The provision of section 3(1A) and section 73 of the Sales Tax Act, 1990 may be relaxed only for those suppliers of 'spun' yarn, who are certified members of All Pakistan Textile Mills Association (Aptma).
Official sources told Business Recorder here on Monday that CBR is examining the proposal of textile industry to give further relief of 3 percent additional tax from May 1, 2003.
The decision would be made after ascertaining the exact revenue impact.
However, the CBR would not do away with the concession in case textile sector fulfils the conditions of Special Procedure for Manufacturers-cum-Suppliers of Spun Yarn Rules 2002'.
When asked whether the concession would be notified with 'retrospective effect' or 'immediate effect', sources said that the CBR would notify 3 percent 'further tax' exemption with 'retrospective effect'.
The CBR is also examining whether the exemption given from January 1 to April 30, 2003, was instrumental in checking menace of flying invoices and enhancing GST revenue.
The CBR has noted that some unscrupulous businessmen get themselves registered with the collectorates of sales tax using fake/incomplete addresses to avoid payment of 'further tax'.
This was identified in yarn sector, which pays largest amount of sales tax. Furthermore, the phenomenon of flying/fake invoices is also common among the yarn units.
On assurance of Aptma that the concession would be instrumental in increasing revenue from textile industry.
The CBR notified the exemption of 'further tax' for a period of four months.
