Tag Archives: output

FBR is eyeing waste of output to increase additional revenue of Rs15 billion | Instant News


KARACHI: The Federal Revenue Council (FBR) aims to generate up to Rs15 billion in additional sales tax revenue by setting limits on production waste announced by producers, officials said on Saturday.

To prohibit waste and treat it as a sale, FBR has put in place a rule whereby companies’ reported wastage of raw materials equates to average wastage in the sector concerned.

Officials say large entities engage in practices that claim a significant percentage of production wastes and in some cases claim as high as 40 percent.

Through the Finance Law, 2020, new amendments were introduced to the Sales Tax Law, 1990, in which the fixation of waste would be determined by sector.

FBR in a circular issued on August 6, 2020, stated, “The changes were made to remove the discretion of the jury officers and for similar treatment throughout the board regarding allowing / prohibiting input tax credits for input items wasted during normal business processes, as long as the credit exceed the benchmarks / limits set by FBR ”. FBR on October 1, 2020 issued SRO 938 (I) / 2020 to inform the rules for implementing sectoral fixation of waste.

As a rule, the FBR Input-Output Coefficient Organization (IOCO) has been mandated to improve the limits of waste for an economic sector. “Where the level of waste has been corrected and notified by the board [FBR] Under this rule, no registered person has the right to take input tax adjustments with respect to wasted input above and above the limit set and notified by the board, “the guidelines said.

A senior FBR official said at the time of budgeting for the 2020/21 fiscal year policymakers were expecting around Rs12-15 billion in additional revenue by streamlining this process.

FBR has detected a large variant of waste claimed by manufacturing companies in various sectors including tobacco, steel, vegetable oils, food, sugar, cement, pharmaceuticals etc., the official added. He further said the wastage claimed by some industrial issues was well above international benchmarks.

The entire exercise will help FBR reduce the size of the refund, he said.

“Once the benchmark for wastage is set, FBR can add waste to sales and subtract the same amount from the plaintiff’s refund amount,” the official added.

Zeeshan Merchant, President, Karachi Tax Bar Association (KTBA) said that it is almost impossible to compare waste because of the different production environments of different companies in the same sector.

“If FBR sets limits on waste for a particular sector, the implementation stage will be more difficult because companies from the same sector can use machines of different brands, origins and capacities,” he said, adding that such situations led to an increase. in litigation.

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Breakingviews – The crisis forced Australia and China closer | Instant News


A miner holds a lump of iron ore in a mine located in the Pilbara region, Western Australia, 2 December 2013. REUTERS / David Gray

HONG KONG (Reuters Breakingviews) – Australia and China face each other despite diplomatic tensions. Supply disruptions in Brazil and weak global demand have made the two trading partners more interdependent with each other, which makes BHP miners and Rio Tinto receive Beijing infrastructure stimulus.

BHP, the world’s biggest miner, said on Tuesday that iron ore production, the main ingredient in steel making, rose 11% in the three months ended June from the previous quarter. That shows demand from the People’s Republic, BHP’s main customer, is increasing rapidly as Beijing tries to build its way out of recession. The $ 127 billion company said if China could avoid the second Covid-19 wave, annual steel production in the country would rise this year, while steel production around the world would “contract by double-digit percentages”.

His colleague, Rio, said something similar last week. As the world’s top steelmaker, China buys about three-quarters of iron ore shipments worldwide, according to Jefferies, with the majority coming from Down Under. It preserves minerals, not tourism or education, in the Sino-Australian trade center. Last year, China imported around 665 million tons from Australia, equivalent to nearly two-thirds of total iron ore imports, according to the S&P Global Market Intelligence. Official figures show that it has generated revenues of A $ 79 billion ($ 55.6 billion) for Australian exporters.

Co-dependency persists even when diplomatic relations between Canberra and Beijing explore new lows. Beijing targets Australian barley products and warns citizens not to travel or study in the country. Australia, for its part, only suspended the extradition treaty with Hong Kong after Beijing cracked down on the former British colony.

But Vale Brazil, another major mineral exporter, is still recovering from last year’s tailings dam disaster and a worsening pandemic. That makes BHP and Rio increasingly irreplaceable. Beijing’s efforts to reduce its dependence on Australia by investing in regions such as Africa will take years, if not decades, to fruition. For now, poisonous politics cannot change facts underground.

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