ISLAMABAD, Oct 17: The Central Board of Revenue (CBR) has notified procedure and conditions for making zero rated supplies against international tenders for Afghan refugees.
The rules may be called the ‘zero-rating of supplies against international tender for Afghan refugees rules, 2001’, which would be applied to supplies of taxable goods made by registered persons against international tender to UNICEF, UNDP, WHO, WFP, UNHCR and IRC.
The government has already exempted customs, sales tax and central excise duty on import of humanitarian aid for Afghan refugees.
To facilitate the humanitarian assistance for Afghan refugees, the CBR has also allowed the repayment of whole of customs duty paid on raw materials used in the manufacturing of goods for supply to the refugees against international tenders issued by the UN agencies.
However, it was warned that in case the goods were not supplied in time to the specific organizations or foreign exchange was not received within 120 days of making the supplies, the sale tax involved on such goods would be recovered from the supplier, besides taking legal or penal action against him under appropriate provisions of the Act.
To this effect the CBR issued two separate notifications of sales tax and central excise duty here on Wednesday.
According to the notifications the supplies against international tender for Afghan refugees would be charged to tax at the rate of zero per cent subject to the following procedure and conditions:
“3-i-The supply shall be made against international tender issued by UNICEF, WHO, WFP, UNHCR, or IRC. The contract signed with the organization concerned shall be retained by the supplier in his record along with a copy of the tender notice;”
“ii-Payment for the supply shall be received in foreign currency, which shall be surrendered to the State Bank, and the supplier shall receive payment in Pak rupees as per State Bank procedure and foreign exchange regulations. A certificate from the bank or authorized dealer in foreign exchange to this effect shall be retained by the supplier in his record;”
“iii-A zero-rated invoice shall be issued for each supply, mentioning the full particulars of the buyer and the contract number, besides the particulars required in section 23 of the Act and iv the goods shall be duly received by the organization which has signed the contract, and a certificate to this effect shall be issued by the organization which shall be duly attested by the Chief Commissioner or Commissioner of Afghan Refugees.
For maintenance of records, “the supplier shall maintain separate records of supplies of zero-rated goods and receipt of foreign currency under these rules, indicating the number and date of the international tender, number and date of the contract, name of the organization to whom goods were supplied, value of goods, amount of foreign currency involved, and number and date of the certificates obtained under clauses (ii) and (iv). The supplier shall retain the documents specified in rule 3 in his record in addition to those prescribed under section 22 of the Act.”
When filing a claim for refund of sales tax against supplies made under these rules, in addition to the relevant supporting documents specified in the Sales Tax Refund Rules, 2000, “the claimant shall now furnish the documents specified in rule 3 in original along with one set of legible photocopies. The original documents shall be returned to the claimant after tallying and endorsement of verification on the photocopies by the officer-in- charge of the refund division.”