FBR gives directives to bridge gap between actual and potential Sales Tax, FED collection

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ISLAMABAD: Federal Board of Revenue (FBR) has directed its field formations a list of administrative measures to bridge the gap between actual Sales Tax/Federal Excise collection and its true potential.

A copy of letter available with Pakistan Today states that Sales Tax and Federal Excise Duty have a significant share in domestic revenue collection and that there appears to be a big gap between actual collection and its true potential. “In order to bridge that gap, numerous amendments were made in Sales Tax Act, 1990 and Federal Excise Act, 2005 through Finance Act 2019, and now, administrative measures are required to strengthen and implement the policy corrections,” the letter reads.

Chairman FBR has directed all its field formations to take immediate action on non-filers of July and August 2019, especially where the registered persons have filed their sales tax returns for the tax periods of May and June, 2019.

Furthermore,the letter reads that there is a need to monitor registered persons paying sales lax under the Eighth Schedule of the Sales Tax Act, 1990, especially in those cases where registered persons are supplying at reduced rate.

The letter reads that the registered persons dealing in Third Schedule items be specifically monitored to ensure that sales tax is being paid on the ‘Retail Price’.

It has also been directed that printing of ‘Retail Prices’ has to be ensured and price lists of all such products have to be obtained from the manufacturers/ importers falling in Third Schedule to compare with the printed prices of products supplied in markets.

Moreover it has been directed that timely filing of Sales Tax/Federal Excise Returns, along with all the Annexure be ensured. 

The letter also states that suppliers who are just filers to remain on ATL be monitored. Field formations to activate working on these suppliers as majority of them  are Null filers or Nil filers.

Field offices have been directed to conduct investigative audits of cases that show negative value addition or high Input-Output ratio, continuous carry forward, and low output tax for the purpose of tax evasion.

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