amendment to STPR 2006-steel related

Government of Pakistan Ministry of Finance, Economic Affairs Statistics and Revenue (Revenue Division) ** Islamabad, the 30th June, 2006 NOTIFICATION (SALES TAX) S.R.O. 678 (I)/2006.- In exercise of the powers conferred by section 71 of the Sales Tax Act, 1990, read with clauses (9) and (46) of section 2, sections 3 and 4, sub-section (2) of section 6, section 7A, clause (b) of sub-section (1) of section 8, clause (a) of sub-section (2) of section 13, sub-sections (2A) and (3) of section 22, sections 23 and 60 thereof, the Federal Government is pleased to direct that the following amendments shall be made in the Sales Tax Special Procedures Rules, 2006, namely:- In the aforesaid Rules, (a) In rule 16, for the full stop, at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:- “Provided that the retail sectors specified in column (2) of the Table below shall pay sales tax on the basis of minimum value addition as specified against each in column (3) thereof, namely:- TABLE S. No. | Retail Sector | Value Addition (1) | (2) | (3) 1. | Motorcycles | 4% 2. | Rubber Tyres | 3% 3. | Mild Steel Products i.e. Steel Bars etc. | Rs 1000/- PMT 4. | Electronic Goods of Domestic Use (Pakistan Origin) | 3% 5. | Flat Rolled Products of Chapter 72 including Tin Plate and Tin Free Steel | 3% 6. | Sanitary Wares and Tiles | 4%.”; (b) for Chapters XI and XII, the following shall respectively be substituted, namely:- “CHAPTER XI SPECIAL PROCEDURE FOR PAYMENT OF SALES TAX BY STEEL-MELTERS AND RE-ROLLERS 74. Application.- The provisions of this Chapter shall apply to all steel melting and steel re-rolling units. 75. Registration.- Every steel-melter or steel re-roller, if not already registered, shall obtain registration in the manner prescribed in Chapter I of the Sales Tax Rules, 2006. 76. Payment of tax.- (1) A steel-melter shall pay sales tax at the rate specified in sub-section (1) of section 3 of the Act on the following basis, namely:- (a) for the purpose of determination of his tax liability, the production of a steel-melter shall be calculated at the rate of eight hundred units of electricity consumed for production of one metric ton of ingots or billets; (b) where a steel-melter, melts and casts ingots or billets from locally generated scrap for which a sales tax invoice is not available, he shall pay sales tax on a fixed value addition of three thousand and six hundred rupees per metric ton; (c) where a steel-melter melts and casts ingots or billets from imported scrap against which he holds a valid GD in his name, from scrap purchased from Pakistan Steel Mills, Karachi against a valid sales tax invoice in his name, he shall pay sales tax on fixed value addition of two thousand four hundred and seventy rupees per metric ton; (d) where a steel-melter, melts and casts ingots or billets from imported scrap as well as from the scrap purchased from Pakistan Steel Mills, Karachi or uses local scrap, he shall determine his liability proportionately as under clause (b) and (c); and (e) Pakistan Steel Mills, Karachi shall pay sales tax on billets produced by it as determined under section 7 of the Act. (2) For the purpose of determination of tax liability, the production of all steel re-rollers shall be calculated at one hundred and thirty units of electricity consumed for the manufacture of one metric ton of long mild steel products (bars, reinforced bars, rods, wire rods and structural sections made of mild steel) and the re-rollers shall pay sales tax on long MS products on fixed value addition of one thousand and eight hundred rupees per metric ton: Provided that steel melters and re-rollers paying sales tax on fixed value addition shall not be entitled to any input tax adjustment. 77. Invoices and returns.- A registered steel-melter and a registered steel re-roller shall issue tax invoices as provided under section 23 showing the amount of sales tax charged on fixed value addition and file details of his production in the format set out at annex-L in addition to a monthly sales tax return under section 26 of the Act. 78. Records.- Every steel-melter and re-roller shall be required to maintain records specified under section 22 of the Act. 79. Responsibility of All Pakistan Steel Melters’ and All Pakistan Steel Re-rollers Associations.- The all Pakistan Steel Melters’ Association and all Pakistan Steel Re-rollers’ Association shall be responsible to ensure that their respective members pay sales tax in the manner specified in these rules, and in case of non-compliance, the Association shall actively assist the concerned Collectorate for enforcement and recovery of sales tax due along with default surcharge calculated thereon, besides any other proceedings that may be initiated against the defaulting steel-melter or steel re-roller under the Act. CHAPTER XII SPECIAL PROCEDURE FOR PAYMENT OF SALES TAX BY SHIP BREAKING INDUSTRY 80. Application.- The provisions of the Chapter shall apply to ship breakers. 81. Registration.- A ship breaker, if not already registered, shall obtain registration in the manner specified in Chapter I of the Sales Tax Rules, 2006. 82. Value for assessment at import stage.- Sales tax paid at import stage shall be the amount of sales tax paid as per the Goods Declaration filed under section 79 or 104 of the Customs Act, 1969 (IV of 1969): Provided that the value of ship imported for scraping or breaking for assessment at import stage shall be US$ 220 per LDT (in equivalent Pak rupees), irrespective of the actual import value. 83. Payment of tax.- (1) A ship breaker shall pay sales tax on the supplies of scrap on fixed value addition of two thousand four hundred and seventy rupees per metric ton. (2) A ship breaker shall deposit the amount of sales tax due along with the sales tax return in the form set out in annex-M, in the designated branch of National Bank of Pakistan on or before the due date. (3) A ship breaker may deposit sales tax in advance, before the time of supply, provided that all formalities i.e. issuance of sales tax invoices, maintenance of proper records, filing of monthly return, etc. are complied with. 84. Input tax adjustment.- A ship breaker paying sales tax on fixed value addition under rule 83 shall not be entitled to any input tax adjustments. 85. Wastages.- (1) Subject to a maximum aggregated wastage of seven per cent, the following shall normally be the percentage or proportion of scrap and other products obtained from the breaking of oil tankers, bulkers, cargo ships, drilling ships, warships, passenger ships and cattle carriers, namely:- (a) ship plate and profiles of ½ inch thickness and above 40% (b) ship plate and profiles of 3/8 inch thickness and above but below ½ inch 20% (c) second quality re-rollable scrap of short lengths 15% (d) small irregular pieces and re-meltable scrap 15% (e) cast iron, pipes or cast steel 7.5% (f) non-ferrous metals 0.5% (g) stores or machinery 2.0% (2) In case of ships other than those specified in sub-rule (1), the percentage of scrap and products shall be determined by local sales tax office in consultation with Pakistan Ship-Breakers’ Association. 86. Records and invoices.- In addition to records specified under the Act, the ship breakers shall maintain additional ship-wise records in the statement set out in annex-N. The ship breaker shall issue a serially numbered sales tax invoice at the time of supply under section 23 of the Act, showing the amount of sales tax charged on the basis of fixed value addition. 87. Time limit for discharging sales tax liability.- (1) The ship-breakers shall clear their sales tax liabilities in respect of ships weighing up to ten thousand LDT within four months, while in case of ships weighing more than ten thousand LDT, within eight months from the date of filing of Goods Declaration: Provided that the sales tax liability shall have to be discharged by the ship-breaker either on completion of clearance of goods of vessel or within the maximum time period allowed as aforesaid, whichever is earlier: Provided further that the sales tax liability on value addition on goods cleared during the month shall be paid along with the monthly return. (2) In case a ship-breaker fails to clear his stocks within the time limit specified in sub-rule (1), he shall pay the remaining amount of sales tax on whole of the remaining stocks by the 15th day of the following month: Provided that as and where applicable, the liability of sales tax in respect of a ship, including a ship in respect of which Goods Declaration (GD) is filed in future, shall be deemed to have been fully discharged when the import related sales tax due in respect of the ship is actually deposited on the basis of value mentioned in rule 82 as well as sales tax on local supply is actually deposited on the basis of fixed value addition mentioned in rule 83. 88. Audit.- The concerned Audit Division of the Collectorate shall commence audit of sales tax records of a ship breaker within two weeks of the expiry of the due date for filing of sales tax return and deposit of sales tax along with payment of sales tax on balance stock as provided in sub-rule (2) of rule 87, or on the expiry of time limit specified in sub-rule (1) thereof, whichever is earlier. If the tax payment is found to have been made in accordance with the provisions of these rules, the Assistant Collector In-charge Audit Division shall issue a certificate, in such format as the concerned Collector may specify to this effect.”; and (c) for the existing annex L, M and N, the following shall be substituted, namely:- “ANNEX-L [See rule 77] Name of Steel Melter/Re-roller: _____________________________________ Address:_______________________________________________________ Sales Tax Registration No.:________________________________________ Month: ________________________________________________________ DETAILS OF PRODUCTION S. No. | Details | Amount (in Rs.) 1. | Electricity units consumed for production of ingots or billets 2. | Production of ingots or billets in metric tons [Total electricity units / 800] 3. | Tax payable on production of ingots or billets ( = Rs. 3600 x 15% = Rs. 540 PMT and / or Rs 2470 x 15% = Rs. 370 PMT ) Total Tax 4. | Purchase of Scrap (in metric tons): Imported scrap Scrap purchased from Pakistan Steel Scrap purchased locally (no invoice) Total | Purchased | Used 5. | Electricity units consumed for production of MS products and Production (Units/130 = Production) | Units | Production 6. | Tax payable on production of MS Products [ =Production X 1800 x 15% = Rs. 270 PMT] 7. | Purchase & Consumption of Ingots or Billets (in MT) | Purchase | Used Signature: _____________ Name: ________________ Designation: ___________ NIC No.: ______________ Annex-M [See Rule 77] ANNEX-N [See rule 86] FORM OF REGISTER OF PURCHASE / INPUT TAX FOR SHIP-BREAKERS S. No. | Date | BE/GD/ sales tax invoice No. and date | Description of raw material | Quantity (MT) | Value (Rs.) (1) | (2) | (3) | (4) | (5) | (6) Sales tax paid (Rs.) | Quantity of taxable supplies-month wise (MT) | Sales tax paid on supplies in column (8) (Rs.) | Sales Tax paid under rule 87(2) (Rs.) | Wastage (MT) (7) | (8) | (9) | (10) | (11) ” . [C. No. 3(1)ST-L&P/2006] Sd- Shahid Ahmad Additional Secretary