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Rules notified for goods supplied from tax exempt areas

ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday issued rules for tax treatment of goods supplied from tax exempt areas. In this regard the FBR issued SRO 96(I)/2021 to make amendment in Sale Tax Rules, 2006.

The Sales Tax Act, 1990 defines “tax-exempt areas” as Azad Jammu and Kashmir, Gilgit-Baltistan, Tribal Areas as defined in Article 246 of the Constitution of the Islamic Republic of Pakistan.

According to the rules , the person bringing, or causing to bring, taxable goods from tax exempt area shall be required to be registered under the Act or, as the case may be, the Sales Tax Act, 1990 as adopted in Azad Jammu and Kashmir and all the provisions of the Acts ibid shall apply accordingly.

The liability of payment of tax or taxes and furnishing of prescribed documents shall be on the person bringing, or causing to bring, taxable goods from tax exempt area and supplying the same in taxable area in the course and furtherance of taxable activity.

Subject to the applicable provisions of the Act and the rules made thereunder, a registered person shall be entitled to the adjustment of any input tax paid under the Sales Tax Act, 1990 as adopted in Azad Jammu and Kashmir.

E-transport advice.— Every registered person bringing, or causing to bring, taxable goods from tax-exempt areas into taxable area, in the course and furtherance of taxable activity, shall login to FBR computerized system and electronically generate e-transport advice, with a unique identification number, in the form specified in STR 32. The e-transport advice shall be issued prior to entry of the taxable goods in to the taxable area.

Provided that a registered person shall only be allowed to generate e-transport advice if he is not blacklisted or suspended in terms of section 21 of the Act and he has filed return under section 26 thereof by the due date for the last two immediately preceding tax periods.

Where an e-transport advice has been generated under this rule, but goods are either not transported or are not transported as per the details furnished, the e-transport advice may be canceled within twelve hours of its issuance:

Provided that the e-transport advice shall not be canceled after it has been examined by an authorized officer on any of the check-posts including the designated mobile teams.

E-transport advice shall be valid for a period of up to one day for distances of up to 100 km in the taxable areas and one additional day for every 100 km or part thereof thereafter.

Where due to unavoidable circumstances, the taxable goods cannot be transported within the validity period of the e-transport advice, the concerned Commissioner Inland Revenue, upon receiving application from the registered person, may extend the validity period.

The details of e-transport advice shall be made available to the recipient of the supply who shall convey his acceptance or rejection of the supply of goods through the FBR computerized system:

Provided that where no acceptance or rejection has been communicated by the recipient within forty-eight hours of such intimation or before the delivery of the goods, whichever is earlier, it shall be deemed that he has accepted the supply of the goods:

Provided further that the provisions of this sub-rule shall not apply where the taxable goods are brought in to the taxable area by manufacturer or importer to be sold at self-own, self-managed, self-administrated or self-operated distribution, wholesale or retail outlet.

The registered person may update the particulars of vehicle while the goods are in transit after duly intimating the concerned Commissioner Inland Revenue and providing reasons for the updating.

Only one e-transport advice may be generated against a single invoice or, as the case may be, a stock advice and one conveyance may carry multiple e-transport advices in case it is transporting taxable goods relating to multiple invoices or stock advices:

Provided where e-transport advice has been canceled under sub-rule (2), fresh e-transport advice may be generated against the same invoice or, as the case may be, stock advice.

Prescribed documents.— Every conveyance carrying taxable goods originating from tax-exempt areas and entering taxable area shall carry the following documents at the time of entering into taxable areas namely: –

sales tax invoice, in original, as prescribed under section 23 of the Act or as the case may be, under the Sales Tax Act, 1990 as adopted in Azad Jammu and Kashmir: Provided that where any taxable goods are exempt under the Sales Tax Act, 1990 as adopted in Azad Jammu and Kashmir or any notification issued thereunder, such goods shall be accompanied by a serially number invoice containing all particulars as specified in section 23 of the Act excluding the amount of sales tax and mentioning the legal provision under which exemption is claimed.:

Provided further that where the taxable goods are brought in to the taxable area by a manufacturer or importer to be sold at his self-owned, self-managed, self-administered or self-operated distribution, wholesale or retail outlet or outlets, duly declared in his STR-1 Form, such goods shall be accompanied by serially numbered stock advice in the form specified in STR-33 along with copy of STR-1 Form.

Goods declaration in case of imported goods; and e-transport advice as specified under rule 69D.

The prescribed documents shall accompany the conveyance up to the destination mentioned in the relevant e-transport advice.

Check-posts.— The Board may specify the location and other necessary particulars of check-posts, including mobile teams, if any, through a notification in the Official Gazette.

The Chief Commissioners Inland Revenue of RTO Peshawar, RTO Abbottabad, RTO Rawalpindi, RTO Sialkot and RTO Quetta or any other RTO having jurisdiction over areas adjoining tax exempt areas, shall establish check-post or check-posts, as notified by the Board under sub-rule (1), within the relevant regional territorial jurisdiction.

At the check-posts every conveyance entering into taxable area from tax exempt areas and carrying any taxable goods (including such goods as are prima facie deemed or suspected to be taxable) shall be subjected to scrutiny by the authorized officer.

On the basis of credible information, mobile teams may proceed to intercept, examine and search any conveyance on the routes emanating from tax exempt areas and all the relevant provisions of the Act and these rules shall apply accordingly. A summary report of examination of taxable goods under sub-rule (3) or as the case may be under sub-rule (4), shall be recorded online by authorized officer mentioning the unique identification number of the e-transport advice in respect of the goods examined.

Powers of the authorized officer. — Any taxable goods in respect of which any of the provisions of Act or these rules have been contravened shall be liable to be seized along with the conveyance, if any, in which such goods are laden or have been laden or which has been used for movement, carriage or transportation of such goods. 69H. Confiscation.— (1) The adjudicating authority, by passing an order in writing, shall have powers and authority to confiscate taxable goods which are brought in to taxable areas in violation of the Act and these rules.

When any goods are confiscated under these rules, such goods shall thereupon vest in the Federal Government.

The adjudicating authority after confiscation shall take and hold possession of the goods confiscated, and every officer of Inland Revenue, if required, shall assist him in taking and holding such possession.

Goods in respect of which order under sub-rule (1) has been passed, and in respect of which the option of paying a fine in lieu of confiscation has not been exercised, shall be disposed of in such manner as the Chief Commissioner Inland Revenue, having jurisdiction may direct.