ISLAMABAD: The Federal Board of Revenue (FBR) has decided to extend the scope of Track and Trace System (TTS) from July to movement of fertiliser from factories to check tax evasion and crackdown on illicit trade.

The TTS system launched in November 2021 will cover the fertiliser industry, which has emerged as the third sector after cigarettes and sugar to be brought under the electronic monitoring system. The FBR is also working to bring beverage, cement, iron and petroleum sectors under this system.

A sales tax general order no. 15 of 2022 issued on Tuesday notified that no fertiliser bag will be allowed to be removed from a production site, factory premises or manufacturing plant or import station without affixation of tax stamps/Unique Identification Markings (UlMs) with effect from July 1.

The UIMs are to be obtained/procured from FBR’s licensee M/s AJCL/MITAS/Authentix Consortium.

The provisions of Section 40C (2) of the Sales Tax Act 1990 read with Rule 150ZF of the Sales Tax Rules, 2006 mandate FBR to notify the date for the implementation of electronic monitoring of production and sales of goods in the manner prescribed in the law on all manufacturing sites of notified sectors.

Around 45 million tonnes of cement, over four billion sticks of cigarettes, four million tonnes of sugar and 30m tonnes of fertiliser would be brought under the tax net in the wake of introduction of TTS.

Approximately 40 per cent of cigarettes are sold without paying taxes causing heavy losses to the national exchequer. For the past 15 years, the FBR has been trying to introduce the system to bring in automation but failed every time.

The FBR said the TTS installation in identified sectors would be a game-changer for improving revenue and curbing counterfeit products in the market.

Published in Dawn, April 27th, 2022