ISLAMABAD: The Federal Board of Revenue’s field formations have reportedly issued thousands of suspicious exemption certificates in the last six years, Profit learnt on Tuesday.
Sources said that the matter came to light during internal communications sent to field formations who have been directed to furnish a report in this regard. In addition, the board has directed field formations to issue certificates for six months only.
According to details, FBR has specified the conditions and the manner for issuance of exemption certificates to exempt import of raw materials from the operation of provisions of Section 148 of the Income Tax Ordinance, 2001 for industrial undertakings for their own consumption.
Taxpayers were allowed to import 110 per cent quantity of raw materials under the SRO; however, they were liable to pay tax at the normal rate under Section 148 for the quantity exceeding 110 per cent under the conditions.
In addition, it was mandatory for commissioners to conduct physical verification before issuing the system generated certificates.
However, field formations completely negated the specified conditions and rules whereas commissioners did not keep oversight on the process of exemptions certificates nor did they submit the reports in six months.
Sources said high ups have also kept mum on this matter; subsequently, the entire import-stage taxation regime had been overhauled on June 30, 2020.
Member IR operations Dr Ashfaq was approached for his comments on the issue but no reply was received till finalisation of story.