RTO says raw material quota misuse unearthed

PESHAWAR: The Regional Tax Office (RTO) has identified the factors responsible for the misuse of the tax exemption quota meant for tribal districts and taken corrective measures accordingly.

A press release said in the wake of the merger of the erstwhile federally and provincially administered tribal areas with KP, the government extended the exemption from collection of Income Tax on imports of raw material to the manufacturing units located in these areas.

To ensure that the raw material being imported by these units is used solely for in-house consumption to produce finished goods, the Federal Board of Revenue (FBR), among others, introduced the scheme of quota allocation of raw material on the basis of installed production capacity of the manufacturing units.

The task of quota determination was jointly assigned to the Regional Tax Office (RTO), Peshawar and Director General of Input Output Quotient Organization. Teams were constituted from time to time for this purpose to determine the production capacity of the units and allot a quota of raw material on its basis to them.

However, on revisiting the quota-related record, it was observed excess quota was availed by these manufacturing units through tricks.