ISLAMABAD: Federal Board of Revenue (FBR) has said that the consumers items falling under mandatory retail price print will be assessed at declared retail price at clearance stage instead of determination through customs value.
The FBR issued Circular No. 01 of 2019 to explain important amendments made to Sales Tax Act, 1990 and Federal Excise Act, 2005 through Finance Act, 2019.
The FBR said that definition of value of supply has been amended to provide for application of retail price taxation to imported goods, and also to incorporate provisions from rescinded rules and STGOs.
These modifications are enumerated below:
(i) Amendment in clause (d) in section 2(46) to exclude imported Third Schedule items from purview of application of ‘customs value’ determined under section 25 of the Customs Act, 1969. These items are to be assessed on the basis of declared retail price.
Further such price is also required to be printed on imported goods as stipulated in clause (a) of section 3(2) of the Sales Tax Act, 1990.
(ii) Substitution of clause (f) in section 2(46) pertains to value of supply in case of toll manufacturing, which defines it as actual consideration received by manufacturers for the value addition carried out in relation to goods;
(iii) Newly added clause (h) defines value to be energy purchase price in case of supply by IPPs; and
(iv) Another new clause (i) transposes the provisions relating to exclusion of late payment surcharge from value, in case of supply of electricity and gas by the distribution companies, from the rescinded Sales Tax Special Procedures Rules, 2007.
The locally manufactured goods specified in Third Schedule are already chargeable to sales tax on the basis of retail price. Now, through amendment in section 3(2)(a), retail price taxation has also been made applicable to imported goods.
The importers are required to print the retail price in the manner prescribed in the aforesaid clause and such goods shall be assessed on the basis of declared retail price and not on the basis of customs value under section 25 of the Customs Act, 1969.
However, in view of difficulties at import stage, customs authorities have been asked to let the consignments cleared for the month of July, 2019 without retail price stickers through STGO 102/2019, dated 15.07.2019.
However, from 1st August, 2019, the imported items under the Third Schedule shall be cleared provided that the retail price alongwith amount of sales tax is legibly, prominently and indelibly printed or embossed on each article, packet, container, package, cover or label as the case may be.
Twelve new serial numbers have been added to Third Schedule as under
— Household electrical goods, including air conditioners, refrigerators, deep freezers, televisions, recorders and players, electric bulbs, tube-lights, electric fans, electric irons, washing machines and telephone sets.
— Household gas appliances, including cooking range, ovens, geysers and gas heaters.
— Foam or spring mattresses and other foam products for household use.
— Paints, distempers, enamels, pigments, colours, varnishes, gums, resins, dyes, glazes, thinners, blacks, cellulose lacquers and polishes sold in retail packing
— Lubricating oils, brake fluids, transmission fluid, and other vehicular fluids sold in retail packing.
— Storage batteries excluding those sold to automotive manufacturers or assemblers
— Tyres and tubes excluding those sold to automotive manufacturers or assemblers
— Auto rickshaws
Biscuits in retail packing with brand name
— Auto-parts, in retail packing, excluding those sold to automotive manufacturers or assemblers.