ISLAMABAD (July 30 2003) : To give a major relief to the business community, the Central Board of Revenue (CBR) has decided to exclude all 'trading items' from the purview of SRO 507 issued for supply of goods manufactured from imported raw material to registered persons.
In this regard, CBR would issue an amended notification here on Wednesday.
On the directive of President, CBR Member Sales Tax Muhammad Ramzan Bhatti has redrafted SRO 507, taking into account grievances of taxpayers and recommendations of meeting between the Federation of Chambers of Commerce and Industry (FPCCI) and Finance Minister Shaukat Aziz.
Official sources told Business Recorder here on Tuesday that under earlier notification the goods manufactured from raw materials, parts and components imported at concessional rate of duties and taxes would be supplied only to registered persons.
In this regard, goods or class of goods would not be supplied to any person who was not registered/enrolled under the Sales Tax Act, 1990.
Sources pointed out that there were four basic reasons behind the issuance of SRO 507 in budget 2003-04.
First, this notification would be instrumental in expanding the sales tax net.
Furthermore, the manufacturers were bound to issue invoices, as they were restricted to sell goods only to registered or enrolled persons.
Simultaneously, the CBR has enhanced threshold limit of retailers expanding the tax net.
It was also instrumental in keeping a strict check on the consumer prices because once a person issues a sales tax invoice, it would not be possible to charge different prices from consumers.
In this way, the sales tax regime had an effective control on price hike.
Furthermore, business concerns used to import raw materials and components at concessional rate of duties and taxes, but instead of manufacturing the finished goods, these items were sold in the open market to hunt lucrative profit.
Now, the CBR would exclude all kind of 'trading items' from the purview of SRO 507, which would enable the business concerns to supply the same to the un-registered persons, sources added.
