Cotton ginning, oil mills: Crest detects billions of rupees ST discrepancies The Federal Board of Revenue has unearthed sales tax discrepancies in the cotton ginning and oil mills sectors to the tune of billions of rupees through Computerised Risk-Based Evaluation of Sales Tax (Crest). Sources told Business Recorder here on Tuesday that the Large Taxpayer Unit (LTU) Islamabad detected seven major cases of sales tax discrepancies in zero-rated sectors. LTU Karachi 87 cases, LTU Lahore 72 cases, Regional Tax Office (RTO) Bahawalpur 349 cases, Regional Tax Office (RTO) Faisalabad 2600 cases, Regional Tax Office (RTO) Hyderabad 224 cases, Regional Tax Office (RTO) Islamabad 25 cases, Regional Tax Office (RTO) Multan 698 cases, Regional Tax Office (RTO) Peshawar 45 cases, Regional Tax Office (RTO) Quetta 9 cases, Regional Tax Office (RTO) Rawalpindi 63 cases, Regional Tax Office (RTO) Sargodha 30 cases, Regional Tax Office (RTO) Sialkot 116 cases, Regional Tax Office (RTO) Sukkur 63 cases, Regional Tax Office (RTO-I) Karachi 1869 cases, Regional Tax Office (RTO-I) Lahore 852 cases, Regional Tax Office (RTO-II) Karachi 279 cases, Regional Tax Office (RTO-II) Lahore 349 cases and Regional Tax Office (RTO-III) Karachi has detected 64 major cases of sales tax discrepancies in zero-rated sectors. Sources said that the FBR had assigned the role of co-ordinator to Directorate General of Intelligence and Investigation Inland Revenue (IR) in the recovery campaign relating to discrepancy value generated by Crest. Resultantly, the DG I&I-IR has requested the field formations to designate one officer of respective RTO/LTU to act as focal person for effective co-ordination and take immediate necessary legal action for recovery of unpaid amount of tax as pointed out by Crest by sending daily progress report to the agency. In this regard following facts are highlighted for FRB's consideration in order to assess factual position: As per condition No iii of SRO.283(1)/2011 dated April 1, 2011 and SRO1058(1)/2011, it has been categorically mentioned that no sales tax shall be payable at ginning stage. Moreover, the supply of cotton seed and oil cake was zero-rated irrespective of supplies made to registered or unregistered persons under SRO 549(I)/2008. In some cases cotton seed oil was also supplied by registered persons which is also zero rated under SRO 602(1)/2012. Before issuance of said SRO the cotton seed oil was exempt from sales tax. Hence, there is no tax impact on the supply of cotton seed, oil cake and cotton seed oil. Bulk of the discrepancy value relates to cotton ginning and oil mills sector. It is pertinent to mention that only in case of Regional Tax Office (RTO) Sargodha the discrepancy value pointed out by Crest is Rs 4,780.61 million whereas, out of said value Rs 4,725.351 million pertains to cotton ginning sector. Similar trends are expected at RTO Faisalabad, Multan, Bahawalpur, Sukkur and Hyderabad. Some of the field formations reported that in compliance with the show cause notices the registered persons submitted GDs mentioning same export value as declared in the return thereby settling discrepancy on Crest system. While, in some cases the data pertains to local zero-rated sales only and not exports, sources added.
Posted on: Wed, 05 Jun 2013 05:40:07 +0000
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