Penalty for denying information sharing

Penalty for denying information sharing

Section 56AB of Sales Tax Act, 1990 has revealed that a person is denying for sharing the information is liable to pay penalty.

In a bid to reinforce compliance with information-sharing requirements, the Sales Tax Act, 1990 has been amended to include Section 56AB, imposing penalties on individuals who fail to meet their obligations under this provision.

The Federal Board of Revenue (FBR) recently issued an updated version of the Sales Tax Act, incorporating amendments introduced through the Finance Act, 2021, effective up to June 30, 2021.

Section 33(28) of the Sales Tax Act, 1990 delineates the penalties for non-compliance under Section 56AB, and reads as follows:

33. Offences and Penalties – Whoever commits any offence shall, in addition to and not in derogation of any punishment to which he may be liable under any other law, be liable to the penalty mentioned against that offence:

28. Any person who is required to share information under section 56AB, fails to do so in the manner as required under the law – Such person shall pay a penalty of twenty-five thousand rupees for the first default and fifty thousand rupees for each subsequent default.

This amendment underscores the government’s commitment to bolstering transparency and accountability within the taxation framework by ensuring the timely and accurate exchange of information. Section 56AB specifically targets individuals who are obligated to share information under the Sales Tax Act, 1990.

The penalties laid out in Section 33(28) provide a clear and structured approach to address non-compliance with information-sharing requirements. For the first instance of default, the penalty is set at twenty-five thousand rupees, serving as a deterrent and signaling the seriousness of the obligation. Subsequent defaults carry a steeper penalty of fifty thousand rupees each, reinforcing the importance of consistent and accurate information disclosure.

Section 56AB likely pertains to instances where individuals, whether businesses or entities, are legally obliged to furnish specific information under the Sales Tax Act. The provision ensures that these obligations are not treated lightly and that penalties act as an effective mechanism to encourage compliance.

While the amendment is a positive step toward ensuring accountability, concerns have been raised about the potential burden on businesses, particularly smaller enterprises, that may struggle to meet these requirements. Striking a balance between enforcement and practical considerations remains a challenge for regulatory bodies.

The inclusion of Section 33(28) in the Sales Tax Act, 1990 exemplifies the government’s commitment to creating a robust and accountable taxation framework. Penalties for non-compliance under Section 56AB demonstrate a focused effort to ensure that individuals meet their information-sharing obligations promptly and accurately. As these amendments come into effect, it will be crucial for the FBR to provide clear guidelines and support to businesses to facilitate compliance, fostering a collaborative approach to taxation that balances enforcement with practicality.