Sources told Business Recorder on Saturday that the Board has recently issued a notification for registering persons providing excisable services, on the recommendations of collectors of sales tax. Collectorates of sales tax had complained to the Board that certain banks were not prepared to get registered with the department. Similarly, cable operators and other persons providing excisable services are also reluctant to obtain registration.
The Collectors of sales tax had requested for provision of powers, under federal excise law to compulsorily register persons extending excisable services.
In the sales tax law, the provisions of compulsory registration is available, which needs to be extended to encompass the excise law.
On these recommendations, the CBR has empowered the collectors of sales tax to compulsorily register the manufacturers of excisable commodities and persons/companies providing excisable services.
Sources said that the relevant notification and instructions have been issued to field formations for compliance. The collectors would shortly start registration of these service providers.
The collectors are now empowered to issue show-cause notices to persons liable to registration as per excise regime. The collector can pass an order specifying reasons for compulsory registration. On the request of the collector, the Central Registration Office (CRO) would register the person and allot him a registration number.
In the last budget, excise duty @ 5 percent is applicable on the gross amount paid by the franchisee to franchiser for having the right to sell products under his brand name or trademark. Similarly, duty is levied on fee charged by financial institutions, including banks, on the services provided by them pertaining to opening of letter of credit, brokerage, credit card processing and renewal, foreign exchange dealing and issuance of bank guarantees, etc.