ISLAMABAD, Dec 30: The Central Board of Revenue (CBR) has waived the levy of 3 per cent sales tax on supply of spurn yarn to unregistered person.

The facility would be available to manufacturers-cum-suppliers on experimental basis for a period of four months, said a sales tax notification issued on Monday.

For claiming the facility, the CBR notified special procedure which would be effective from January 1, 2003 till April, 2003, added the notification.

According to a sales tax official, the decision was taken following the observation that some unscrupulous persons got registered with sales tax department on fake/incomplete addressees to avoid payment of further tax.

The mischief was pronounced in the yarn sector, which was one of the larger taxable segment, which resulted into a loss to the national kitty, he said.

The official said that to cope with the situation, All Pakistan Textile Mills Association (Aptma) has suggested to CBR to waive the condition of further tax, which they believed would counter the flying invoice phenomena and actually increase GST revenue due to lesser refunds being claimed.

Under the procedure, the provisions of section 3(1A) and section 73 of the Sales Tax Act have been relaxed for those suppliers of spurn yarn who are members of Aptma and would have to fulfil the following conditions: — They shall furnish agreed information of supplies and its related payment to CBR/concerned collector in terms of provisions of section 73 of the sales tax on monthly basis; and — They shall also furnish the information relating to those supplies made from July 1, 2001 to December 31, 2002, the sales proceeds of which have been received other than through the bank instrument without complying with the provisions of section 73 of the Sales Tax Act.

In return, no action for recovery of further tax would be taken against members of Aptma, if they would fulfil the conditions. However, manufacturers-cum-suppliers against whom contravention reports have already been framed for non-fulfilment of provisions of section 73 would not be eligible for this concession.

The positive effect on revenue of the relaxation would be reviewed by CBR in March 2003, in consultation with Aptma, to decide further extension of the facility.