FBR to Ban All Cigarettes Without Tax Stamps Using New Track and Trace System

The government is in the final process of installation of the track and trace system at 23 functional cigarette manufacturing units in Pakistan and Azad Jammu & Kashmir.

Well-informed sources told Propakistani that the installation of the system has been almost completed at the manufacturing premises of two multinational companies. Tax stamps are now affixed on the cigarette packs manufactured by these multinational manufacturing companies. The implementation of the system at Khyber Tobacco Company is also underway.

Four small units in Mardan had obtained a stay order from the Peshawar High Court on the tripartite agreements to be signed with the FBR. The remaining small units in Mardan and the KPK are individually signing the said tripartite agreements with the FBR.

Tax authorities of Azad Kashmir have also agreed to implement the track and trace system at the units operating within the jurisdiction of the AJK. The FBR will confiscate all manufactured cigarettes without tax stamps coming from AJK to the tariff areas of the rest of Pakistan. Therefore, it would not be feasible for the units operating in the AJK to sell all stocks of cigarettes without tax stamps within the areas of the AJK. Only cigarette packs having tax stamps would be allowed to enter within the territorial jurisdiction outside the AJK.

The FBR has directed the cigarette manufacturers not to remove tobacco products from the production site, factory premises, or manufacturing plants without affixation of tax stamps/Unique Identification Marking (UIMs) from April 30, 2022 which are to be obtained/procured from the FBR’s licensee M/s AJCL.MITAS/Authentix Consortium.

The provision of section 40C(2) of the Sales Tax Act, 1990 read with Rule 150ZF of the Sales Tax Rules 2006 mandate the FBR to notify the date for the implementation of the electronic monitoring of production and sales of goods in the manner prescribed in the law on all manufacturing sites of notified sectors, the FBR added.