ISLAMABAD -National Assembly Standing Committee on Industries and Production on Monday recommended installing electronic volume tracking system at beverage companies so that every company could pay tax according to its sales.
This new system would be for coming billing cycle and will be applicable in next budget.
The Chairman FBR present at the meeting said that he will decide with stakeholders that how companies would be taxed for their previous year sales.
Earlier, representatives of beverage industry discussed their problems and concerns regarding capacity tax, with the committee.
Representatives of smaller beverage companies plead that their 70 percent sale is in summer season and capacity tax was unjustified for small companies. They further said that capacity tax was imposed after consultation with two major companies, Pepsi and Coca Cola while other companies were kept in dark.
After a long debate, Chairman Committee, Asad Umar asked that if no beverage company was in favor of capacity tax, why nobody opposed it when it was approved.
The Federal Board of Revenue implemented Capacity tax by, Federal Excise Duty and Sales Tax on Production Capacity (Aerated Waters) Rules, 2013 through an SRO 649(1)/2013.
According to this tax regime it was mandatory for the manufacturers of beverages and aerated water to pay capacity tax in lieu of the sales tax and Federal Excise Duty (FED) on the basis of production capacity of the plants and machinery of units.
During the discussion, it was surfaced that all beverage companies supported capacity tax earlier and now when it was time to pay they were finding ways to not pay in terms of taxes what they agreed earlier.
Asad Umar termed this a scam and said that it is very unethical from the beverage industry that it agreed to capacity tax and when it is time to pay, now they have gone to court.
Some beverage companies have filed a case against Capacity tax. Committee Chairman Asad Umar also held Ministry of Industries responsible for this scam and said that without consultation enforcement of capacity tax is a matter of grave concern and it could cause a loss of billions of rupees of tax revenue.
“Only two players, Pepsi and Coke were consulted for the imposition of capacity tax, someone should be held responsible for this mega scam”, he said.
He said while making further decisions Ministry should have capacity to hear from all stakeholders and then take a decision.
Umar mentioned that tobacco industry is also asking for the same electronic volume tracking system for taxing and is under consideration.