Cement Companies Resisting Implementation of Track and Trace System

Cement manufacturers in the country are resisting the track and trace system of the Federal Board of Revenue (FBR) by giving irrational reasons and justifications for delaying the implementation of the system at their factories. Sources told ProPakistani that cement manufacturers have informed the FBR that the hot, humid, and dusty environment would delay the implementation of the FBR’s track and trace system. During the last meeting of the FBR with the cement association, the tax authorities categorically conveyed to the industry that each factory must install the track and trace at one production line. After successful testing, the system would be installed at entire factories. The track and trace system has become operational at the fertilizer units, but it has less significance due to sales tax exemption on fertilizers. On the other hand, the applicators are needed to be installed at cement manufacturing plants. Once the applicators are installed, the system of track and trace would become fully operational. According to sources, the system was expected to become fully functional at the cement plants by the end of March 2023. The deadline for the implementation of the track and trace system was July 1, 2022, for the cement sector. Under the Federal Board of Revenue (FBR) Rules, all assets (tangible/ intangible including applicators) and services that are required for the affixation of unique identification markings/stamps including installation, operation, and maintenance, will be the responsibility and at the cost of the licensee during the term of the license. The assets installed by the licensee for the purpose of the track and trace system shall belong to the licensee. The core material of the unique identification markings must be made of a non-removable anti-tampering substrate so that the composition of the stamp reveals evidence of any attempt to tamper or stamp remove or crumbling considerable portions of the stamp. The size of the stamp should be compatible with most label applicators in the market, according to the FBR Rules. The system will result in digital monitoring of the large-scale manufacturing and production of these key sectors. Besides, preventing revenue leakages, it will help in minimizing human intervention and thus pave the way for a transparent and reliable tax compliance system across the country.