Sources told Business Recorder here on Tuesday that it is a major case of tax evasion in paint sector involving new kind of technique used to evade the authorities. The amount of sales tax evasion comes to around Rs 316.117 million by the said unit. The importer-cum-manufacturer of paint has fraudulently has misused the facility of "Single Stage Taxation" regime to avoid the payment of sales tax with the collaboration of its dummy/self created firm. The agency is expected to expand the scope of investigation to check similar kind of frauds by other units in the paint sector, if any. On the basis of credible information that paint unit of Lahore is involved in tax evasion by way of misusing "Single Stage Taxation", notified vide Chapter-XIII of the Sales Tax Special Procedure Rules, 2007, the Directorate of Intelligence & Investigation-IR, Lahore initiated investigations in the case.
It was found that during the period from January-2014 to Dec-2015, the unit has suppressed its sales value by way of under-invoicing the value of supply of paints, distempers, enamels, pigments, colours, varnishes, resins etc. by booking sales to its dummy/self-created firm of Lahore. Under single stage taxation regime, the sales tax is collected from the manufacturer or importer, as the case may be, and the specified goods on which extra sales tax has been paid are exempt from payment of sales tax on subsequent supplies apart from value addition. In this regard, the unit knowingly, deliberately, dishonestly/fraudulently has misused the facility of "Single Stage Taxation" regime to avoid the payment of sales tax as required under section 3 of the Sales Tax Act, 1990 with the collaboration of its dummy/self created firm. The amount of sales tax involved i.e. Rs 316.117 million is thus recoverable from the registered person along with default surcharge and 100% penalty of Rs 316.117(M).
Accordingly, Contravention Report has been sent to Chief Commissioner-IR, Corporate Regional Tax Office, Lahore. Moreover, investigations in the matter for the period from January-2016 to Dec-2016 are also underway. A credible information was received that the unit located at Industrial Area, Kot Lakhpat. Lahore, is involved in massive evasion of sales tax by way of misusing the facility of "Single Stage Taxation" regime prescribed at Serial No. 9 of Special Procedure for Payment of Extra Sales Tax on Specified (Goods), Chapter-XIII of the Sales Tax Special Procedure Rules. 2007. The unit being a manufacturer of Specified Goods is liable to charge, levy and collect sales tax @normal rate i.e. 17 percent, extra tax @ 2 percent and further tax (now @2 percent previously @1 percent if supplied to un registered person) on its taxable supplies of specified goods. Chapter-XIII of the Sales Tax Special Procedure Rules, 2007 envisages that extra amount of sales tax @ 2 percent of value of supplies shall be charged levied and collected by the manufacturer of such goods in addition to the tax payable under sub section (1) & (2) of section 3 of the Sales tax Act, 1990 as the case may be. Whereas subsequent supplies of these goods are exempt from payment of the sales tax. Whereas, contrary to that said registered person has suppressed its sales value by way of under-invoicing the value of supply of paints, distempers, enamels, pigments, colours, varnishes, resins etc. by booking sales to its dummy/self-created firm.
Stock markets: SECP takes notice of misleading reports I SLAMABAD: The SECP has taken serious notice of certain stock market research reports that have taken an extremely speculative approach to sensitive matters that remain sub judice.
It is inappropriate for research analysts to speculate on how much KSE-100 index is likely to fall or rise based on possible outcomes of court cases.
Such research reports fail to demonstrate the independence, objectivity, and due care expected from research analysts and they have the potential to adversely affect the sentiment of the capital market.
The SECP has warned the relevant analysts and directed them to strictly comply with Research Analysts Regulations, 2015, and the Securities Act, 2015.
Any further non-compliance shall be dealt with the full force of the law.
Moreover, the SECP chairman has directed the relevant SECP officers to comprehensively review the Research Analysts Regulations, 2015, considering the prevailing market practices and international laws.-PR