Special Procedure for Ginning Industry Rules, 1996

GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE SALES TAX WING *** Islamabad, the 10th November, 1996 NOTIFICATION (SALES TAX) S.R.O. 1271(I)/96.- In exercise of the powers conferred by section 71 of the Sales Tax Act, 1990, read with sub-section (3A) of section 3 and the first and second provisos to section 45 thereof, the Federal Government is pleased to make the following rules, namely:-- 1. Short title, application and commencement.-- (1) These Rules may be called Special Procedure for Ginning Industry Rules, 1996. (2) These shall apply to the cotton ginners and ginning factories. (3) They shall come into force at once. 2. Definitions.-- for the purpose of these Rules,-- (a) "Act" means the Sales Tax Act, 1990; (b) "ginning" means the manufacture of ginned cotton; (c) "ginning unit" means any manufacturing unit engaged in ginning; and (d) "ginner" means a person who is engaged in the manufacture and supply of ginned cotton. 3. Registration.-- (1) A ginner shall apply for registration in the form specified in the Central Board of Revenue's Notification No. SRO. 550(I)/96, dated the first July, 1996, to the Collector of Sales Tax having jurisdiction in the area where the ginning unit is situated. (2) Where a ginner is running more than one ginning unit or a composite unit dealing in ginning and spinning together or is engaged in any other taxable activity, whether the ginning and other taxable activity are carried out in the same premises or not, such ginner shall apply for registration separately in accordance with sub-rule (1) for each ginning unit and separately for other taxable activity. . (3) The application for registration shall be processed and if the application contains necessary particulars a certificate of registration indicating the registration number assigned to the applicant shall be issued. 4. Tax rate.-- All supplies by a ginner shall be charged to tax at the rates specified in the Act: Provided that where any such supply is subsequently exported, it shall be zero-rated in accordance with the provisions of section 10 of the Act. 5. Tax invoice.-- The ginner shall issue a tax invoice on the supply of taxable goods under section 23 of the Act indicating the value of taxable supply and the amount of tax due on such supply. 6. Payment of tax.- (1) The ginner shall deliver ginned cotton through a delivery note or gate pass to the registered spinning unit or to the registered exporter. The delivery notice or gate pass shall be serially numbered document and shall indicate the quantity of the cotton sold and the name of the buyer alongwith his sales tax registration number, builty number and date and registration number of the vehicle on which the ginned cotton is being carried. The spinning unit or the exporter, after receipt of ginned cotton in his premises, shall settle the terms, if any, about quantity and value of the ginned cotton with the ginner within six (06 days) days of the date of the despatch of ginned cotton from the ginning unit. The changes in quantity or value shall be indicated on the reverse side of the copies of the delivery note or gate pass issued by the ginning unit. The ginning unit shall then issue the prescribe sales tax invoice for the quantity and value of the ginned cotton agreed between the ginner and the spinning unit or the exporter. The tax invoice shall be issued of the date on which the ginned cotton was despatched against the delivery note or gate pass within seven days (07 days) of the date thereof and shall bear a cross reference of the delivery note or gate pass. The Spinning unit or Exporter shall remit amount of sales tax payable on cotton purchased by him during the month to the ginner by the 10th day of the month following the month to which the tax invoice relate, through a Bank Draft drawn and crossed in the name of the respective Collector Sales Tax. The Ginner shall issue a proper receipt for the draft received by him from the spinner or exporter. The Ginner shall deposit these drafts in the authorized branch of National Bank of Pakistan by the 15th day of that month and submit to Collector Sales Tax details of cotton sold by him during a month and amounts of sales tax deposited by him in the format given below by the 20th day of that month:- Name and Address of Ginner ______________________________________ Registration No. _______________________________________________ Month _______________________________________________________ Name of Buyer with Location and Registration No. | Tax Invoice No. and Date | Quantity of Cotton Sold | Value | Sales Tax Payable | Sales Tax Paid through Draft No. and Date (1) | (2) | (3) | (4) | (5) | (6) (2) If the ginning unit delivers or dispatches any cotton to any spinning unit or exporter without issuing the delivery note or gate pass or if he fails to issue the tax invoice within seven days (07 days) from the date of the respective delivery note or gate pass, he shall be liable to penalty under section 33 of the Act besides being liable to pay the tax. (3) If the spinning unit or exporter of ginned cotton fails to remit sales tax payable on ginned cotton purchased by him by the due date specified in sub-rule (1), besides any other action which may be taken against him under the Act, he shall not be entitled to claim adjustment or Refund of input tax in respect of such purchase unless he pays the amount of additional Tax or penalties chargeable on such late remittance under section33 and 34 of the Act, through deposit in the designated bank branch or deduction from the adjustable or refundable amount. (4) If the spinning unit or the exporter furnished bank draft for the amount of sales tax due to the ginner by the date specified in sub-rule (1) and the ginner fails to deposit the same within the due date specified therein, then the spinning unit or exporter shall be entitled to claim adjustment or penalties under section 33 and 34 besides other penal action under other provisions of the Act. (5) If the spinning unit or the exporter fails to furnish bank draft for the amount of sales tax payable on the ginned cotton purchased by him from a ginner by the due date specified in sub-rule (1), or claims adjustment or refund of input tax in contravention of sub-rule (3), besides any other action which may be taken against him, the Collector of Sales Tax may issue an order directing all ginners not to deliver or supply ginned cotton to such spinning unit or exporter without receiving prior payment of sales tax from the buyer. If a ginning unit, after receipt of such order makes delivery or supply of ginned cotton to such spinning unit or exporter without prior payment of the amount of sales tax involved, besides any other action which may be taken against him, such ginner shall be liable to pay sales tax, additional tax and penalty thereof, if any, on such supply. (6) A person aggrieved by an order of a Collector under sub-rule (5) may file a representation to the Central Board of Revenue. (7) Cases involving non-payment or short payment of sales tax by a ginner, a spinning unit or an exporter on supplies of ginned cotton made under the provisions of these rules shall be adjudicated by the officer having jurisdiction in the area where the contravention case is made 7. Notice to be given by ginner.-- Further a ginner shall, at the time of commencement of ginning activity and at the closure of ginning activity, inform the concerned Collector of Sales Tax on day earlier than the commencement of ginning activity or, as the case may be on the day following the cessation of ginning. 8. * * * 9. Records.-- A ginner shall maintain the records specified in the Act and the rules made thereunder. Amended vide SRO.481(I)/98, dated 21.05.1998 Amended vide SRO.483(I)/98, dated 27.05.1998 Amended vide SRO.118(I)/2000, dated 13.03.2000 Amended vide SRO.823(I)/2000, dated 08.11.2000 Amended vide SRO.398(I)/2001, dated 18.06.2001 Amended vide SRO.134(I)/2002, dated 06.03.2002