Sales Tax Act 1990: imposition of default surcharge in fraud, non-payment

KARACHI: A person willfully does not make sales tax payment or commits fraud shall liable to pay default surcharge along with actual amount.
According to updated Sales Tax Act, 1990 issued by the Federal Board of Revenue (FBR) the default surcharge has been explained through Section 34.
Section 34: Default Surcharge
Sub-Section (1): Notwithstanding the provisions of section 11, if a registered person does not pay the tax due or any part thereof, whether willfully or otherwise, in time or in the manner specified under this Act, rules or notifications issued thereunder or claims a tax credit, refund or makes an adjustment which is not admissible to him, or incorrectly applies the rate of zero per cent to supplies made by him, he shall, in addition to the tax due, pay default surcharge at the rate mentioned below:—
(a) the person liable to pay any amount of tax or charge or the amount of refund erroneously made, shall pay default surcharge at the rate of twelve percent per annum, of the amount of tax due or the amount of refund erroneously made; and
(b) deleted
(c) in case, the default is on account of tax fraud, the person who has committed tax fraud shall pay default surcharge at the rate of two per cent per month, of the amount of tax evaded or the amount of refund fraudulently claimed, till such time the entire liability including the amount of default surcharge is paid.
Sub-Section (2): For the purpose of calculation of default surcharge, –
(a) in the case of inadmissible input tax credit or refund, the period of default shall be reckoned from the date of adjustment of such credit or, as the case may be, refund is received; and
(b) in the case of non-payment of tax or part thereof, the period of default shall be reckoned from the 16th day of a month (following the due date of the tax period to which the default relates) to the day preceding the date on which the tax due is actually paid.
Explanation: For the purpose of this section tax due does not include the amount of penalty.
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