Pkrevenue.com

Day: January 3, 2021

  • FBR directs issuing exemption certificates to gratuity, provident funds

    FBR directs issuing exemption certificates to gratuity, provident funds

    ISLAMABAD: Federal Board of Revenue (FBR) has issued directives for grant of income tax exemption to gratuity and provident funds.

    Through an office order, the FBR issued directives on complaints received from taxpayers that tax offices were refusing to grant income tax exemption against gratuity funds/ provident funds.

    The FBR expressed concern on the treatment being given by some field formations on the provident funds/ gratuity funds requests for exemption certificates under section 159/150/151 of the Income Tax Ordinance, 2001.

    The FBR said that the taxpayers had pointed out the exemption granted to the funds prior to tax year 2013, the tax offices were refusing the request for exemption certificates.

    The tax offices were asking the taxpayers to move fresh applications for recognition of the funds on the pretext that the fact of their approval is not available/evident in the FBR’s system IRIS.

    The FBR clarified the position by stating that the exemption requests of recognized provident/gratuity funds cannot be refused. Therefore, the revenue body directed the tax offices to process the exemption certificate requests of all the provident / gratuity funds who produce evidence of recognition under the relevant rules framed under the Income Tax Ordinance, 2001 or repealed law Income Tax Ordinance, 1979.

    “Further, asking for fresh applications for recognition merely on the pretext that such recognition is not available on the system is not a valid excuse,” the FBR directed.

    However, the FBR cautioned the tax offices: “Mere issuance of exemption certificate under section 159 of the Income Tax Ordinance, 2001 does not foreclose the possibility of reviewing/recalling such action in case it is later-on discovered that the taxpayer produced some incorrect/invalid or wrong evidence for obtaining the favor.”

  • Sales tax recovery: movable, immovable property may be sold without attachment

    Sales tax recovery: movable, immovable property may be sold without attachment

    ISLAMABAD: Sales tax laws have given immense powers to officers of Inland Revenue and they can recover due sales tax by selling movable or immovable property without attachment.

    Sources in Federal Board of Revenue (FBR) told PkRevenue.com that under Section 48 of the Sales Tax Act, 1990 a mechanism for recovery of arrears of tax has been defined.

    For the purpose of recovery of tax, penalty or any other demand raised under this Sales Tax Act, 1990, the officer of Inland Revenue shall have the same powers which under the Code of Civil Procedure 1908 (V of 1908), a Civil Court has for the purpose of recovery of an amount due under a decree.

    They said that Section 48(1)(b)(c) clearly mentioned that tax officials may attach and sell or sell without attachment any movable or immovable property of the registered person from whom tax is due.

    The tax officers are also empowered to recover the sales tax amount from a person whose amount is stuck up with other tax authorities.

    “[The tax officers may] deduct the amount from any money owing to person from whom such amount is recoverable and which may be at the disposal or in the control of such officer or any officer of Income Tax, Customs or Central Excise Department,” according to the law.

    The officers of Inland Revenue can order any person who holds money of a person in default, besides the officers can also:

    “Stop removal of any goods from the business premises of such person till such time the amount of tax is paid or recovered in full;

    “require by a notice in writing any person to stop clearance of imported goods or manufactured goods or attach bank accounts;

    “seal the business premises till such time the amount of tax is paid or recovered in full;

    “recover such amount by attachment and sale of any movable or immovable property of the guarantor, person, company, bank or financial institution, where a guarantor or any other person, company, bank or financial institutions fail to make payment under such guarantee, bond or instrument.”

    Provided that the Commissioner Inland Revenue or any officer of Inland Revenue shall not issue notice under this section or the rules made thereunder for recovery of any tax due from a taxpayer if the said taxpayer has filed an appeal under section 45B in respect of the order under which the tax sought to be recovered has become payable and the appeal has not been decided by the Commissioner (Appeals), subject to the condition that ten per cent of the amount of tax due has been paid by the taxpayer.

    “If any arrears of tax, default surcharge, penalty or any other amount which is adjudged or payable by any person and which cannot be recovered in the manner prescribed above, the Board or any officer authorized by the Board, may, write off the arrears in the manner as may be prescribed by the Board, the FBR said.