Section 75 of the Sales Tax Act, 1990, provides a mechanism for the application of certain provisions of Act IV of the Customs Act, 1969, in relation to the imposition and exemption from customs duties, draw-back of duty, warehousing, confiscation, and procedural aspects concerning offenses and appeals.
The Federal Government, through the Finance Act, 2021, updated the Sales Tax Act, 1990, and empowered itself to declare the applicability of Customs Act provisions to matters pertaining to the sales tax.
The specific text of Section 75 is outlined as follows:
75. Application of the provisions of Act IV of 1969 to Sales Tax.— The Federal Government may, by notification in the official Gazette, declare that any of the provision of the Customs Act, 1969 (IV of 1969), relating to the levy of, and exemption from, customs duties, draw-back of duty, warehousing, confiscation, and procedure relating to offences and appeals shall, with such modifications and alterations as it may consider necessary or desirable to adapt them to the circumstances, be applicable in regard to like matters in respect of the tax imposed by section 3.
Key components and implications of Section 75 include:
1. Federal Government’s Authority: Section 75 grants authority to the Federal Government to issue notifications in the official Gazette, declaring the applicability of provisions of Act IV of the Customs Act, 1969, to matters related to sales tax. This discretionary power allows the government to align the legal framework to the evolving needs and circumstances of the taxation landscape.
2. Levy and Exemption from Customs Duties: The provisions of the Customs Act, 1969, related to the levy of customs duties and exemption from such duties can be made applicable to matters concerning sales tax. This facilitates the integration of customs-related mechanisms into the sales tax regime, ensuring consistency and coherence in the overall taxation framework.
3. Draw-back of Duty and Warehousing: The section enables the Federal Government to extend provisions regarding draw-back of duty and warehousing from the Customs Act to the realm of sales tax. This allows for the seamless application of established practices governing the return of duties and warehousing facilities to businesses involved in sales tax transactions.
4. Confiscation and Offenses Procedure: Provisions related to confiscation and the procedural aspects of offenses and appeals outlined in the Customs Act can be adapted and made applicable to similar matters in the context of sales tax. This ensures that the legal mechanisms for handling offenses, confiscations, and appeals are consistent across different tax-related domains.
The inclusion of Section 75 in the Sales Tax Act, 1990, reflects a regulatory approach that acknowledges the interconnected nature of customs and sales tax matters. It allows for a more comprehensive and coordinated application of legal provisions, streamlining processes and ensuring uniformity in the treatment of various tax-related issues.
While the Federal Government holds the authority to declare the applicability of Customs Act provisions, any modifications or alterations deemed necessary to adapt them to the circumstances can be implemented. This adaptability ensures that the legal framework remains responsive to the evolving dynamics of the business and taxation environment.
Stakeholders in the business and taxation sectors are encouraged to stay informed about potential notifications from the Federal Government under Section 75, as they may impact the legal landscape governing the application of customs-related provisions to sales tax matters.
