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  • News Desk
  • Jan 6th, 2004
  • Comments Off on Rules to check illegal refund claims defended
The member, Sales Tax, Central Board of Revenue (CBR), Shahid Ahmed, has said that the sales tax refund rules and rules for registration have been made difficult to stop leakage of massive revenue through millions of rupees in illegal refund claims on fake invoices.

Addressing a seminar on "Sales Tax law in Pakistan", organised by the Income Tax Bar Association Karachi (ITBAK) on Monday, he said that, had some businessmen not claimed undue refund on fake invoices, the government would not have made stringent rules.

He said that the strategy behind the new fund rules was based on risk management, and the new rules would be circulated among the bar and trade bodies. Their proposals would be duly incorporated in the rules, he added.

Responding to the points raised by Rashid Malik, a tax consultant, in his detailed presentation, the CBR member said that the issue of payments on supplies would be examined with the receipt of the first sales tax returns to be filed on the new format.

He said the payment procedures could be reviewed, if the taxpayers faced problems in the new returns.

About the inadmissibility of inputs on electricity, used by the factory employees in their colonies, and on diesel used by factories in power generation, the CBR member said that the issue had been raised by a number of associations and it would be settled in the next budget.

The main problem was how to determine separately the diesel used in power generation and in vehicles, he added.

About the issue of fixing timeframe in finalising matters regarding suspension of sales tax registration, payment of refund in cases decided by the appellate tribunals and timeframe for issuing show cause notices, he clarified that there should be timeframe for finalising these matters and he would issue directives to the Sales Tax Collectors.

He also agreed with a proposal that the blacklisted person should be given full opportunity to defend himself before finalising any action.

The member, Sales Tax, CBR, urged the bar to set up a committee to have interaction with the tax planners of the CBR, and added such an exercise would greatly help in the formulation of proposals for the next budget.

Shahid Ahmed pointed out that the CBR had given certain concessions for registration of suppliers as manufacturers.

He, however, said that he would look into waiving the condition of installation of machinery for registration. All cases of transfers of registration would also be looked into favourably.

It was brought to the notice of the CBR member that, due to typing error by the computer operators, the returns of the registered persons were not properly updated in the centralised computer programme, managed by Starr information system in Lahore, which resulted in various complications, ie some time a registered person might be declared as de-registered or a non-filer.

The CBR member agreed to the proposal that in such cases, the refund claimant should submit a copy of the return filed by his supplier, along with the copy of registration, for processing of refund claims.

Shahid Ahmed did not agree to the point that the ITBAK be provided offices in the Sales Tax Collectorates, like they had in the Income Tax building, and said that the new tax reforms were aimed at minimising contacts between the taxpayers and collectors.

About the posting of Sales Tax officers at business premises, he said that the provision had not been used even once in any case. However, in special cases of suspected tax frauds, the provision could be invoked.

Earlier, ITBAK President Iqbal Salman Pasha, in his welcome address, called for lowering the tax rate, which was the main reason of corruption, as well obstacle in the way of investment in the country.

Copyright Business Recorder, 2004


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