The government has been given a suggestion to impose a sales tax on the actual sales price of sugar to deal with possible tax evasion.

According to details, a report containing various suggestions about the sugar sector was presented to the federal cabinet in its meeting held with Prime Minister Imran Khan in the chair on Tuesday.

The report suggested imposing sales tax on actual sales prices of sugar through an SRO by the Federal Board of Revenue (FBR).

The report highlighted the possible cartelization in the sugar sector, wherein the association of sugar mills owners were generally frontrunners of cartels. The report read, “Section 38 of Competition Act 2010 may be amended suitably, adding a minimum penalty of Rs. 75 million for violations by the associations. The penalty may be enhanced as a certain percentage of the combined turnover of the member undertakings.”

“The Competition Appellate Tribunal needs to be revised and made fully functional with regular members. This will end delays in decisions under the competition law,” added the report.

The Securities & Exchange Commission of Pakistan (SECP) has also been given a suggestion to amend the law for allowing an audit of cost accounts of the company. The report said that administrative ministries should have the power to request to SECP for cost audit for required commodities.

To deal with possible Satta [gambling/betting] in sugar, the report said, “the inspection regime should be strengthened to ensure that no sugar remains unlifted after the expiry of the forward contract.” It added that FBR should implement an IT-based track and trace system and there should be mandatory registration of brokers, sugar dealers, wholesalers with NTN and STRN linked to their bank accounts with mandatory registration of godown and automated online inventory management system. FBR should also develop a digital dashboard of stocks of sugar, according to the report.

The provincial governments, proposed the report, should ensure that no hoarding is possible. It maintained that the State Bank of Pakistan should issue advisory to commercial banks to inspect their pledged sugar stocks and to verify their presence with the collaborations with FBR and Cane Commissioners. Joint inspection teams of concerned banks, SBP, FBR, and provincial governments should be formed to verify the pledged stock after every three months, the report further said and added that the matter might be referred to Federal Investigation Agency in case of any misappropriation.

The report also suggested that the government should enhance financial penalties for late sugar crushing, and a fine of Rs. 5 million along with 12-month imprisonment should be imposed in this connection.

Source: Pro Pakistani