Sales Tax Special Procedure Rules for Composite Units of Cotton Ginning and Oil Extraction

Vide SRO 188(I)/2015 dated 05.03.2015 Federal Government has introduced Chapter XV ” Special Procedure for Sales Tax on Cottonseed Oil Expelled by Oil Expelling Mills and Composite Units of Ginning and Expelling” in the Sales Tax Special Procedure Rules, 2007. Salient features of the rules are as under:

1- Sales tax shall be levied @ Rs. 6/- per 40 kg of cotton seed. The sales tax so collected shall be deposited in the exchequer without any adjustment of input tax.

2- Oil cake produced from such cottonseed shall be exempt from payment of sales tax.

3- The ginning unit shall submit monthly statement of production and supplies to the concerned commissioner having jurisdiction. The ginning unit shall also submit certificate to the commissioner with regard to the seed provided to growers for sowing purpose.

4- The ginning unit shall inform the concerned commissioner in respect of starting and closure of the activity within three days of such event.

5- The ginning unit shall file final statement of production and supply to the concerned commissioner after closure of ginning activity.

6- SRO 213(I)/2013 dated 15.03.2013 has been rescinded wherein sales tax @ 2% was imposed on supply of cottonseed oil.

7- This notification has been made effective from 01.07.2014 for all practical purposes other than provision of exemption of oil cake.