The Federal Board of Revenue (FBR) is mulling to issue penalty notices to sugar mills, which have failed to install video analytic system (VAS). The FBR directed Chief Commissioners of LTO, MTO, CTO of Karachi, Lahore and RTO Peshawar to issue penalty notices to non-compliant sugar mills which have not followed FBR guidelines. “The FBR will take action by imposing heavy penalties on non-compliant sugar mills and non-compliant vendors if they fail to install the video analytic equipment at their factory premises by January 31, 2021,” according to a notice sent to vendors of VAS. The notice has been sent to all the pre-qualified vendors, including: M/s AJCL (Pvt) Ltd, M/s TPL Trekker, M/s CNS Engineering & Technology, M/s. NRTC and GCS, M/s COMMTEL, M/s DWP Technologies and M/s Focus Technology Pvt Ltd. The FBR said that it has authorised seven vendors through its report on November 20, 2020 for VAS and a copy was shared with Pakistan Sugar Mills Association (PSMA) and all pre-qualified vendors to initiate the process. In order to ensure the implementation of VAS, the FBR issued a letter on December 02, 2020 directing the PSMA to provide mill wise update status of deployment of VAS by December 31, 2020, which was further extended up to January 31, 2021. “In response to the letters only a few sugar mills have issued final quotations to the vendors for installation of the system. However, a large number of sugar mills are not willing to implement the system as they have either issued provisional quotations or not issued any quotation at all the process of VAS.” The FBR observed that the pre-qualified vendors had failed to install the video analytics equipment on the sugar mills, which had issued final quotations to the pre-qualified vendors for the system. Earlier, the Federal Board of Revenue (FBR) has given a deadline to sugar mills for installing video cameras till January 15 in order to ensure real-time monitoring of sugar production. However, the government’s plan to pilot online surveillance of sugar production confronted a technical barrier as real-time video connection with the tax system couldn’t be built with crushing reaching the middle point. Monitoring cameras have initially failed to capture manufacturing activities at the sugar mills. The sources at Large Taxpayers Office (LTO) Karachi said at least two sugar mills have so far implemented the VAS from designated vendors, but the gadgets couldn’t synchronise the records of production lines with the main database of the FBR. The LTO Karachi has jurisdictions over 29 sugar mills. In order to resolve the issues between sugar mills and vendors, a meeting was scheduled on January 13 at FBR headquarters. The sources said the implementation of VAS at sugar mills would not be possible in the current crushing season. The sugar crushing season runs through November to March. The FBR has deputed its officials at sugar mills as a stopgap measure until it develops real-time video links with crushing and production processes.