30 August 2012

Shipbreaking and steel sectors: DGI & IIR all set to check tax evasion

SLAMABAD: Directorate General of Intelligence and Investigation Inland Revenue (IR) Federal Board of Revenue (FBR) is all set to check possible tax evasion in shipbreaking and steel sectors after receiving different reports of flouting rules and regulations by these industries.

Sources told Business Recorder here on Monday that the shipbreakers have to give the exact weight age of the ship while filing of goods declaration (GD) during customs clearance process. The agency has received reports that certain shipbreakers declare less quantity/weightage of ships to avoid taxes. If low weightage of a ship has been declared, it would result in less payment of sales tax. The directorate will reconcile the data with the customs department to check whether evasion of tax is taking place in the ship breaking industry.

Similarly, the agency will also verify whether the shipbreaking industry is following the Sales Tax Special Procedure Rules 2007. Shipbreakers have to pay sales tax at the specific rate per metric tonne of re-rollable scrap supplied by them. The quantity of re-rollable scrap shall constitute a certain percentage of the total LDT of the ship imported for breaking. The shipbreakers shall clear their sales tax liabilities in respect of ships weighing up to a certain LDT within four months. While in case of ships weighing more than a specific LDT, sales tax payment has to be made within eight months from the date of filing of GD. The sales tax liability shall be discharged by the ship-breaker either on completion of clearance of goods obtained from breaking of vessel or within the maximum time period allowed.

The agency would also check the tax payments made by the steel industry in view of the provisions of the relevant Chapter applicable to all steel melting, steel re-rolling and ship breaking units. The agency would thoroughly check whether the steel industry is properly paying taxes as per specific provisions of the Sales Tax Special Procedure Rules 2007.

Previously, the agency had shown remarkable performance in detection of cases in beverage and cigarette industries. The directorate had conducted raids on stockiest and wholesalers of non-duty paid or smuggled cigarettes/ tobacco in KPK. The agency had also conducted investigative audit of beverage units. The agency had also issued ‘Red Alerts’ during the Pre-Refund Analysis (PRA) of refund claims in cases where information has been received about suspected claims under new tax policy to combat menace of bogus/dubious refund claims.

Source: Business Recorder. By Imamuddin. 28 August 2012

No comments: