According to FBR authorities, the Federal Board of Revenue (FBR) has decided to consult with the sugar industry when determining the minimum price at which sugar must be supplied in order to calculate sales tax.
The Pakistan Sugar Mills Association (“PSMA”) has notified the FBR that market factors such as supply, and demand should be used to determine prices rather than the government at all. Similarly to this, FBR shouldn’t set a minimum supply value for sugar.
There shouldn’t be a minimal requirement for sugar fixation. Input and recommendations are also being sought once more by FBR in order to fix the price by December 5, 2022.
The industry argued that the proviso to section 2(46) of the Sales Tax Act prohibits FBR from fixing ex-mill sugar value by exercising unrestrained, unstructured, and discretionary power.
The industry continued, any attempts to fix a uniform or notional price of sugar (even for the purposes of sales tax calculation) are arbitrary, absurd, discriminatory, and unreasonable because the rate of sugar is not uniform throughout the season/country and actually fluctuates on a monthly, weekly, and even daily basis and may vary on the same day within the same/different cities.
In the captioned subject, the PSMA and any sugar mills have not yet had the chance to speak before FBR.
PSMA has only been asked for “feedback” and “proposals,” not anything else. It is humbly suggested that the stated commitment made by representatives of FBR for offering the chance for hearing to sugar mills, as indicated in the Order, is not satisfied by simply seeking bids.
In violation of Section 24A of the General Clauses Act of 1897, the principles of natural justice, and the aforementioned Order of the Honorable Lahore High Court, FBR rejected the earlier proposal of PSMA shared via letters dated September 28, 2022, and November 02, 2022 (the contents of which are not being repeated for the sake of brevity and may kindly be deemed to be reiterated herein).
Additionally, no explanations have been provided as to why FBR believes it is “essential” to set the ex-mill value of the sugar supply in accordance with the proviso to subsection (46) of Section 2 of the Sales Tax Act of 1990.
Therefore, after giving PSMA, sugar mills, and their respective legal counsels a chance to be heard, you are kindly asked to refer back to the aforementioned Letter and review the earlier suggestion of PSMA.
To read our blog on “Sugar mills request government approval to export sugar,” click here.
