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

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

The Federal Board of Revenue (FBR) has pushed back the deadline for the tobacco industry’s track and trace system deployment from April 30, 2022, to May 20, 2022.

According to sources, the FBR would not allow cigarette makers to remove tobacco products from production sites, factory premises, or manufacturing facilities without affixing tax stamps/Unique Identification Marking (UIMs) by the deadline of May 20, 2020.

Previously, the deadline was set for April 30, 2022, but it has now been pushed up to May 20, 2022. The deadline extension would allow cigarette manufacturing units to finish installing technology for affixing tax stamps on cigarette packs by May 20, 2022.

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

Two major cigarette manufacturers are in the final stages of implementing the track and trace system, and one local company has also inked a tripartite agreement with the FBR. On the other hand, seven local manufacturers have won a stay order against the track and trace system, with the next hearing date set for June 8, 2022.

The FBR would also seize cigarette cartons (without tax stamps) manufactured in Azad Jammu and Kashmir (AJK) but brought within the geographical jurisdiction of Pakistan’s tariff zones. The AJK administration has agreed to put the track and trace system at the cigarette production plants within its jurisdiction. The FBR will seize all manufactured cigarettes without tax stamps from the AJK to Pakistan’s tariff zones.