Sindh Revenue Board to seal businesses not on active taxpayers list

Sindh Revenue Board to seal businesses not on active taxpayers list

KARACHI: The Sindh Revenue Board (SRB) has been vested with the power to seal the businesses of individuals not listed on the Active Taxpayers List (ATL), as per the recent amendment to the Sindh Sales Tax on Services (Amendment) Act.

The amendment, introduced through the Sindh Sales Tax on Services (Amendment) Act, empowers the SRB to take action against non-compliant businesses by invoking provisions related to the sealing of business premises. The Sindh Assembly recently passed this amendment, bringing about significant changes to the existing law.

Section 54B has been incorporated into the Sindh Sales Tax on Service Act, providing the SRB with the authority to seal business premises. The section outlines specific conditions under which the SRB can take such action against individuals who fall under the following criteria:

(a) Individuals liable to be registered under the Act but are not actually registered in terms of the provisions of Section 24.

(b) Individuals not classified as active taxpayers as per the provisions of clause (1A) of Section 2.

(c) Individuals constantly non-compliant with the provisions of the Act or the rules made thereunder.

The section specifies that if an officer of the SRB, not below the rank of a Commissioner, is satisfied that any person falls under the mentioned criteria, they may issue a written order directing the sealing of the business premises for a period not exceeding four months, after providing written notice. The premises can be de-sealed once the cause for sealing ceases to exist, as determined by the SRB officer.

Prior to this amendment, the Sindh government had already authorized the SRB to post officers to business premises under Section 54 of the Act. This section allowed the Board to post an officer to the premises of a registered person or class of persons to monitor the provision of services, subject to specified conditions and restrictions.

Additionally, Section 54A was introduced to allow monitoring or tracking of services through electronic or other means. The Board may specify registered persons or services for such monitoring, implement an electronic system, and mandate the use of electronic means for the issuance of tax invoices under the e-invoicing system.

The amendments are aimed at enhancing the SRB’s ability to enforce tax compliance, particularly targeting those who are not on the ATL or are non-compliant with tax regulations. This move aligns with the broader efforts to strengthen tax administration and revenue collection in the province. Businesses and individuals are encouraged to ensure compliance with tax obligations to avoid potential penalties and business disruptions.