ISLAMABAD, May 14: The Federation of Pakistan Chambers of Commerce and Industries (FPCCI) has proposed a string of amendments in the Sales Tax Act 1990. The apex trade body has also asked the government to scale down the rate of GST to as low as 5 per cent from the current 15 per cent, which according to the FPCCI was higher and was an obstacle in the industrial growth.
The demand has been made by the FPCCI in its budget proposals for 2007-08 submitted to the Central Board of Revenue (CBR) for incorporation in the upcoming budget.
It has been suggested that the turnover threshold for the GST exemption should be enhanced from the current Rs5 million to Rs10 million for manufacturers and retailers. Moreover, the units whose annual turnover over is less than Rs10 million should also be exempted from the levy of GST or federal excise duty on utility bills.
The FPCCI proposed that the penalty for late filing of GST returns should be scaled down to Rs1,000 from Rs5,000, import of machinery and raw material for use in exportable items should be exempted from sales tax.
The sales tax at the rate of 15 per cent is levied on computer equipments and hardware. This imposition has badly affected the fast growing information technology.
It has been suggested that the sales tax imposed on hardware and equipments might be withdrawn immediately.
The apex trade body proposed to the government to reduce the rate of sales tax to 7.5 per cent from 15 per cent on writing/printing paper to provide maximum education facility in the country, surgical tapes used for wound dressing may be exempted from sales tax.
Leather and artificial leather have been made zero rated but this did not cover plastic and EVA chappals (shoes). These are used by a large poor community and deserve exemption from sales tax.
The coal mining and cutlery industries are facing numerous problems. There is a dire need for establishing power plants based on domestic coal, which needs long term availability of coal for the plant. There is sales tax on indigenous coal, whereas the import of coal for use in cement manufacturing plant exempted from sales tax.
The cutlery industry, which is a great contributor of foreign exchange to the national exchequer, needed exemption from sale tax.According to proposals for legal amendments in the Sales Tax Act, it is proposed that the payment of sales tax should be on actual delivery of goods, the recovery proceedings should only be initiated after giving a show cause notice and an opportunity to the registered person. The ceiling of Rs5 million turnovers should also be allowed for registration of wholesalers, dealers, distributors as allowed to the retailers.
The FPCCI also suggested that the restriction of payment from the business account of buyer to the business account of supplier may be waived and should be restricted to the payment of the amount of sales tax only and that too in case of exporters and not by general body of traders.
Further the time period of 180 days may also be extended up to 360 days.
