Pakistan : Sugar mills barred from clearing production sans digital monitoring
The FBR has barred sugar mills from clearing sugar in the upcoming crushing season until production is monitored through video surveillance or Digital Eye software. Mills must install required monitoring equipment before operations start. Non-compliance will prevent sugar clearance, as authorities enforce Section 40C to ensure transparency and curb tax evasion in the sector.
ISLAMABAD: The Federal Board of Revenue (FBR) has barred sugar mills from clearing production of sugar from factory stores during the upcoming crushing season, till Inland Revenue officials conduct production monitoring of the commodity through video surveillance, video analytics, or Digital Eye software.
In this regard, the FBR issued a Sales Tax General Order (STGO) 5 of 2025 here on Wednesday.
The FBR has directed sugar mills to purchase and install the Production Monitoring Equipment (video surveillance/ analytics) before the commencement of the upcoming sugar crushing season.
The FBR has also restricted the sugar mills from clearing production of sugar from their business premises without conducting production monitoring through video surveillance, video analytics, or Digital Eye software.
According to the notification, the provisions of Section 40C (2) of the Sales Tax Act, 1990 mandate the FBR to notify the date for the implementation of monitoring or tracking of production by electronic or other means, including video analytics, in the manner prescribed in the law on all manufacturing sites of notified sectors.
In exercise of the powers conferred under Section 40C (2) of Sales Tax Act, 1990 and Rule I50 ZQT (2) of the Sales Tax Rules, 2006, the Federal Board of Revenue is pleased to direct that before the commencement of the upcoming sugar crushing season, no person engaged in manufacturing of sugar shall remove any production from their business premises unless it has undergone the process of production monitoring.
Before the commencement of the upcoming sugar crushing season, all the sugar mills are required to procure and install Production Monitoring Equipment with the following specifications:
Requirements for the Graphical Processing Unit (GPU) include equipment being manufactured by NVIDIA, AMD, Intel, or Huawei that meets the desired specifications.
Requirements for the Central Processing Unit (CPU) include the equipment being manufactured by AMD or Intel that meets or exceeds the target specifications.
All hardware installations must be placed on standard mounting racks in standard cabinets, including but not limited to a dust-proof environmental control cabinet, dust-proof with Lock and Key option for physical security of equipment.
All hardware installations (referred to herein as Production Monitoring Equipment) include the GPU and CPU system that must enable integration with the Production Monitoring Equipment/ hardware already procured and installed by the sugar mills, the FBR maintained.
All hardware installations (referred to herein as Production Monitoring Equipment) must allow seamless monitoring of production through video surveillance, video analytics, or Digital Eye software, as defined under Rule 150ZQS of the Sales Tax Rules, 2006, as and when directed by the Board. The order was issued with the approval of the competent authority.
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Source : Business Recorder
