FBR Extends Deadline for Implementation of Tobacco Sector’s Track and Trace System

The Federal Board of Revenue (FBR) has extended the deadline for the implementation of the track and trace system for the tobacco sector from April 30, 2022, to May 20, 2022.

According to sources, the FBR will not allow the cigarette manufacturers to remove tobacco products from the production site, factory premises, or manufacturing plants without affixation of tax stamps/Unique Identification Marking (UIMs) from the extended deadline of May 20, 2020.

Previously, the deadline was April 30, 2022, which has now been extended up to May 20, 2022. The extension in the deadline would facilitate the cigarette manufacturing units to complete the process of installation of machinery for affixing tax stamps on the cigarette packs by May 20, 2022.

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

Two leading cigarette manufacturing companies are under the process of final stage of implementation of the track and trace system whereas one local company has also signed the tripartite agreement with the FBR. On the other hand, seven local manufacturers have obtained the stay order against the track and trace system and the next date of hearing has been fixed on June 8, 2022.

The FBR will also confiscate cigarette packs (without tax stamps) manufactured in Azad Jammu and Kashmir (AJK), but brought within the territorial jurisdiction of tariff areas of Pakistan. The AJK government has decided to implement the track and trace system at the cigarette manufacturing units operating within its jurisdiction. The FBR will confiscate all manufactured cigarettes without tax stamps coming from the AJK to the tariff areas of Pakistan.