SOHAIL SARFRAZ
ISLAMABAD (October 02 2006): The provincial excise and taxation departments have issued instructions to motor registration officials to obtain sales tax invoices on first registration of motorcycles.
Sources told Business Recorder on Sunday that the Directors-General of provincial excise and taxation departments have started implementation of SRO 560(I)/2006 to ensure collection of sales tax on registration of new motor cycles.
Quoting DG, Excise and Taxation, NWFP, sources said that the department has informed Pakistan Automotive Manufacturers Association (PAMA) that provincial excise department considers only those motorcycles for registration, which have been duly cleared by Engineering Development Board (EDB). In this regard, the EDB has provided a list of 35 local assemblers of 2-3 wheeler vehicles. Each application of the assembler is further verified by EDB and Pakistan Standards and Quality Control Authority. The certificates pertaining to recovery of sales tax, customs duty and other taxes are provided in each case by the assembler. The total of price and taxes is taken as the benchmark for calculation of registration fee, eliminating chances of loss to the government.
Sources said that PAMA and CBR have also requested the provincial governments to instruct the motor registration officials to ensure compliance of CBR's SRO.560(I)/2006 of June 5, 2006 at the time of motorcycles registration and make it compulsory for them to provide sales tax paid invoice at that time.
The instructions have been issued to all motor registration officials to ensure that the SRO is strictly followed and that no motorcycle is registered without presentation of sales tax invoice.
The instructions have been issued on the complaints that unorganised sector dealing in motorcycles was not paying any sales tax. However, the SRO 560(I)/2006 makes it mandatory for motor registration officials to ensure that registration of such vehicles is only done (and fee calculated) on the basis of price plus sales tax invoice.
Therefore, the directive has been issued to motor registering officials to ensure payment of sales tax and proper registration fee at the time of registration of motorcycles (both locally manufactured and imported) to avoid revenue loss, the NWFP Excise and Taxation department added.
It may be recalled that collectors of sales tax had received instructions to ensure that motor registration officials demand documents in case of import and sales tax invoice in case of locally assembled vehicles at the time of first registration.
Under the sales tax rules 2006, each manufacturer, or importer, who sells any vehicle through a dealer would issue sales tax invoice in the name of the dealer mentioning full particulars of such dealer and the dealer would subsequently issue sales tax invoice in the name of the customers.