Section 25A of the Sales Tax Act, 1990 authorized officer of Inland Revenue the authority to obtain samples of goods or raw materials for various purposes related to sales tax.
The amendment, incorporated through the Finance Act, 2021, underscores the Federal Board of Revenue’s (FBR) commitment to ensuring accurate assessment and valuation of goods, while also providing a structured and transparent process.
Section 25A of the Sales Tax Act, 1990 reads as follows:
25A. Drawing of Samples – Where an authorized officer of Inland Revenue considers it necessary to take a sample of any goods or raw materials, for the purpose of determining their liability to sales tax or for the purpose of establishing their value or for any other reason, he may remove a minimum quantity of goods or raw materials sufficient to enable a proper examination or analysis to be made. At the time of taking the sample, the person in possession of the goods shall be informed and given the opportunity to sign the representative samples, so drawn, and take a corresponding sample for his record. Any sample taken under this section shall be taken against a proper receipt a copy each of which shall be kept in the record by the registered person and the Large Taxpayers Unit or Regional Tax Office, as the case may be.
The provision allows authorized officers of Inland Revenue to exercise their discretion in taking samples of goods or raw materials when necessary. This can be for various purposes, such as determining the liability to sales tax, establishing the value of the goods, or for any other relevant reason. The minimum quantity of goods or raw materials removed should be sufficient for a proper examination or analysis, ensuring a thorough and accurate assessment.
A crucial aspect of this provision is the transparency and fairness built into the process. The person in possession of the goods is to be informed at the time of taking the sample, and they are given the opportunity to sign the representative samples. Furthermore, the person can take a corresponding sample for their record, ensuring that there is a clear and documented trail of the sampling process.
To enhance accountability and record-keeping, any sample taken under Section 25A is required to be documented against a proper receipt. Both the registered person and the tax office, whether it be the Large Taxpayers Unit or Regional Tax Office, are mandated to keep copies of this receipt in their records.
While this amendment is seen as a positive step toward improving tax oversight and accuracy, concerns have been raised regarding the potential for misuse or arbitrary sampling. Critics argue that clear guidelines and checks and balances are essential to ensure that the authority granted under Section 25A is exercised judiciously, preventing undue disruption to businesses.
Section 25A in the Sales Tax Act, 1990 represents a strategic move by the FBR to empower tax authorities in their oversight capabilities. By allowing authorized officers to obtain samples for various purposes, the amendment aims to enhance the accuracy of assessments while promoting transparency and fairness in the sampling process. As these amendments come into effect, it will be essential for the FBR to provide clear guidelines and support to businesses, ensuring that the authority granted under Section 25A is exercised responsibly and in line with the principles of a fair and efficient taxation system.
