LAHORE, Oct 24: Federal Board of Revenue (FBR) chairman Ahmed Waqar has ruled out the possibility of reduction in the rate of general sales tax (GST).
Addressing businessmen and industrialists at the Lahore Chamber of Commerce and Industry (LCCI) here on Friday, he said that no reduction was possible in the GST rate as it would disturb the entire financial system.
He also ruled out the possibility of any sort of witch-hunting in the name of business audits because the FBR was facilitating the business community instead of disturbing it. He said that audit of businesses was a general requirement and was done whenever the need for the same arose. It would not be allowed to use as a tool against the business community. Referring to the demand for a ban on import of luxury and non-essential items, the FBR chairman said that the government had decided imposing 50 per cent regulatory duty on imports instead of complete ban because the imports of such items were only $1.5 billion out of total imports of $40 billion last year.
Referring to demand for expediting the processing of refund claims, Waqar assured that the FBR would take necessary steps to ensure early refund of amounts paid by taxpayers in excess.
LCCI acting-president Mian Muzaffar Ali said that the assessment of import duty for steel and various other petro-products, including chemicals, dies and plastic raw materials, based on invoice or scanned value whichever higher, under Section 25 of the Customs Act, 1969, needed immediate review.
He stressed the need for exempting the registered taxpayers from 10 per cent withholding tax on electricity bills because it was aimed at bringing new assessees in the tax net. A speedy tax refund process should also be ensured within a strict time framework and the evaluation director-general should be asked to review import duties as and when international prices of raw materials changed in consultation with the leading chambers of commerce.
He also called for banning luxury items, especially vehicles, and reduction of duty and taxes on electricity, gas and petroleum products and stressed the need for encouraging regional trade through facilitating transit trade of China and Central Asian republics.
He said that application of Section 235 of the Income Tax Ordinance, 2001, on CNG stations was against the law and of its spirit particularly in the presence of Section 234-A which was specifically enacted for CNG stations. Section 234-A provided for the deduction of income tax in advance at the rate of four per cent of gas consumption and the tax so collected under this section shall be final tax on the income of CNG stations. Since the final tax liability had been paid by CNG stations under section 234-A, further 10 per cent of withholding tax under Section 235 was against the law. The CNG stations should, therefore, be kept out of the purview of the Section 235.
He said that the automatic refund system had failed due to mala fide of the concerned sanctioning authorities and capital was stuck with the department creating serious liquidity problems for businesses.
LCCI vice-president Shafqat Saeed Piracha, former presidents Bashir A Buksh, Iftikhar Ali Malik, Mian Misbahur Rehman, Mian Anjum Nisar and Sheikh Mohammad Asif, former senior vice-presidents Abdul Basit and Sohail Lashari, former vice-presidents Aftab Ahmad Vohra and Mubasher Sheikh also apprised the FBR chairman of the problems being faced by traders and industrialists.