First, the electricity connection will be in the name of the registered person and the bill issued by the utility provider contains the name and the registration number of such person. Secondly, in case where the connection is not in the name of such person, the registration number of such person shall be mentioned in the bill along with his address as declared in his application for sales tax registration. Thirdly, the electricity should be consumed exclusively in the manufacture of exported rice.
It has been brought to the notice of the Board that certain rice manufactures are violating provisions of STGO 36 of 2010. In all such cases, the FBR will amend the STGO 36 of 2010 to take away zero-rating facility from rice mills involved in misuse of the zero-rating scheme, sources added.
According to the FBR''s instructions issued to the Chief Commissioners of all Regional Tax Offices (RTOs), the Board has granted facility of zero-rating on electricity to 16 units of rice exporters. Fresh cases have also been received for further grant of zero-rating facility, but it has been decided to revisit the policy earlier implemented in terms of Board''s letter of 2007. Under the said FBR''s letter to the Rice Exporters Association of Pakistan, since zero-rating of utilities is done on case to case basis, the rice exporting units should approach Sales Tax Tariff Section FBR House with details of their sales tax registration and electricity/gas meter number for zero-rating of utilities as per budget announcement. The FBR will now revise the policy of grating sales tax zero-rating to the rice mills due to misuse of the facility.
The FBR said that the zero-rating facility on electricity was granted only to the exporters, but it has been transpired through profiles of some units that they are involved in both exports and local sale of rice and taking the benefit of the zero-rating regime. In this regard, the RTOs would conduct a detailed analysis through comparison of total sales (bifurcating exports and local sales) with monthly sales tax returns and income tax record of the last two years of all units. Moreover, RTO would also conduct physical verification to ascertain that the units mentioned in the said STGO are not making local supplies with categorical comments about each unit of respective jurisdiction and sent them to the Board. The FBR will omit names of the units from the list of the STGO 36 of 2010 where rice mills are making supplies to the local market, the FBR added.