The Large Taxpayers Office (LTO) Karachi, the flagship revenue collection arm of the Federal Board of Revenue (FBR), has demonstrated exceptional performance by collecting a staggering PKR 456.4 billion during the first quarter of the fiscal year 2022/2023 (July – September).
(more…)Tag: FBR
FBR, Pakistan’s national tax collecting agency, plays a crucial role in the country’s economy. Pakistan Revenue is committed to providing readers with the latest updates and developments regarding FBR activities.
-
Dar appreciates FBR for taxing rich
ISLAMABAD: Federal Minister for Finance and Revenue Muhammad Ishaq Dar on Thursday appreciated the Federal Board of Revenue (FBR) for taxing the rich.
The finance minister presided over a meeting on the revenue performance during his visit to the FBR Headquarter.
READ MORE: FBR issues procedure, collection of capital value tax
He appreciated the work done by FBR in terms of increasing the share of direct taxes (income tax and capital value tax) in the total share of taxes as compared to last year through important tax measures taken this year for taxing the rich.
The finance minister also highlighted the importance of taxpayers’ engagement in devising tax policies and revenue collection efforts.
READ MORE: FBR may extend date for return filing tax year 2022
FBR chairman Asim Ahmad extended a warm welcome to the Minister on behalf of the FBR team.
The chairman gave the presentation and explained various revenue initiatives taken by FBR and issues currently being faced in revenue administration.
READ MORE: FBR allows refund adjustment to facilitate return filing
It was briefed to the minister that FBR has successfully achieved its monthly targets for the months of July and August, 2022 and will also achieve the quarterly target up to September, 2022.
This performance is despite the slowing down of economy in the month of September due to floods, import contraction and shrinking of demand due to inflation in the country as well as no sales tax on petroleum products.
READ MORE: FPCCI seeks statutory time for return filing after error removals
The finance minister appreciated the FBR team for their efforts in meeting the targets. He assured the team that he will extend full support in the performance of their duties and will engaged with them frequently.
He advised the FBR team to position themselves to the quick changes in economic outlook. Dar further advised the FBR to increase its efforts to achieve the true tax potential.
-
FBR issues procedure, collection of capital value tax
ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday issued procedure and collection of capital value tax (CVT).
The government through Finance Act, 2022 imposed capital value tax on sale of immovable properties and motor vehicles.
Following are the procedure and collection of the CVT.
READ MORE: FBR may extend date for return filing tax year 2022
Declaration of assets. – (1) Every person who is liable to pay capital value tax on assets mentioned in clauses (b) and (c) of sub-section (2) of section 8 of Finance Act, 2022 shall file the electronic declaration in Iris as set out in the Form- A attached to these rules.
(2) The value of foreign assets shall be converted in rupees as per ready transactions exchange rates for mark to market revaluation notified by the State Bank of Pakistan applicable for the last day of the tax year.
Statements to be filed by persons collecting capital value tax on motor vehicle. – (l) Every motor vehicle registration authority or a manufacturer or a person selling motor vehicle through auction liable to collect CVT in respect of motor vehicle in Pakistan shall furnish to the Commissioner a quarterly electronic statement in Iris as per schedule mentioned in sub-section (2) of section 165 of the Ordinance.
(2) Every person liable to collect CVT in respect of motor vehicle in Pakistan shall also furnish to the Commissioner an annual electronic statement in Iris for the relevant tax year within thirty days of the end of tax year, in addition to statement to be filed under sub-rule (1) of this rule.
READ MORE: FBR allows refund adjustment to facilitate return filing
(3) The provisions of sub-sections (2A), (2B) and (4) of section 165 of the Ordinance shall, in so far as relevant, apply to statements filed under this rule.
(4) The statement shall be filed in the manner as provided in Iris.
Collection of capital value tax. (1) The tax required to be collected by a registration authority, manufacturer or a person selling motor vehicle through auction shall be paid by way of credit to the Federal Government through a computerized payment receipt (CPR) or SWAPS payment receipt (SPR) as set out in the Form ‘B’ attached to these rules.
READ MORE: FPCCI seeks statutory time for return filing after error removals
(2) The person required to pay tax in respect of foreign assets or assets specified by the Federal Government shall pay tax by way of credit to the Federal Government through a computerized payment receipt (CPR) at time the income tax return for the tax year is due for payment of tax on foreign movable assets, as set out in the Form ‘C-l’ and for payment of tax on foreign immovable assets, as set out in the Form ‘C-2’ appended to these rules.
(3) All sums being capital value tax collected under section 8 of the Finance Act, 2022, shall be paid by way of credit to the Federal Government by remittance into the government treasury or in the authorized branches of the State Bank of Pakistan or the National Bank of Pakistan, –
READ MORE: FBR advised to extend tax return filing date for three months
(i) on the same day in case these have been collected by or on behalf of government;
(ii) in other cases, such amount shall be paid within one week from the date of such collection.
-
FBR may extend date for return filing tax year 2022
ISLAMABAD: Federal Board of Revenue (FBR) likely to extend the last date for filing income tax return for tax year 2022 considering the prevailing situation due to floods and technical issues on the online return form.
The last date for filing income tax return for tax year 2022 is September 30, 2022. The FBR already announced that it would not extend the date and urged the taxpayers to make compliance within due date.
READ MORE: FBR allows refund adjustment to facilitate return filing
Sources in the FBR said that although no decision had been taken so far in this regard. However, the revenue body was considering seriously on the date extension sought by the business community.
Chambers and association have approached the FBR to extend the last date for filing income tax return, which is expiring on September 30, 2022.
Muhammad Idrees, President, Karachi Chamber of Commerce and Industry (KCCI) in a letter sent to the Finance Minister requested to issue to the FBR for extension in last date for filing income tax returns from September 30, 2022 to December 31, 2022 keeping in view the unusual situation emerging all over the country due to recent rainfalls and flash floods.
He stated that the chamber was constantly being approached by the members of the business and industrial community and also by the people belonging to different walks of life who wanted the last date to be extended till December 31, 2022.
READ MORE: FPCCI seeks statutory time for return filing after error removals
“Due imposition of ban on imports which was followed by unusual situation all over the country emerging after torrential rainfalls and flashfloods, the taxpayers, particularly the members of the business & industrial community, are facing a lot of problems as a large portion of receivables from various parts of the country badly hit by floods are still pending,” he said.
It was a well-known fact that the business, commercial, agricultural and all other activities in the flood-hit areas have come to a total halt which has created serious cashflow issues and it will take at least two more months to return to normalcy.
In this scenario, it has become inevitable to provide relief to loyal taxpayers in shape of extension in last date hence, keeping in view the ground realities, he requested the Finance Minister to order FBR to extend the last date for filing income returns to December 31, 2022 which will be widely welcomed by the loyal taxpayers from all over the country.
Besides, the return filing portal is also encountered with some glitches which the tax practitioners said those were not removed so far.
READ MORE: FBR advised to extend tax return filing date for three months
Karachi Tax Bar Association (KTBA) recently highlighted problems on the online return form. It said Column for adjustment of brought forward capital losses under the head of capital gains is not available in Income tax return form due to which tax on capital gain cannot be calculated correctly.
The Column of tax credit for specified industrial undertakings u/s 65G of the Income Tax Ordinance, 2001 is inadvertently available in the Tax Credits Annexure of income tax return for salaried individuals, which has no correlation with such tax credit.
Although the rate of tax on contract receipts under section 153 was reduced from 7.5 per cent to 7 per cent for Tax Year 2022, however, there is no column for such reduced rate in the return for the TY 2022 available on IRIS.
The draft of manual return forms for the Individuals and AOPs for the Tax Year 2022 was issued belatedly on August 26, 2022, whereas the final SRO. 1733(1)/2022 was issued on September 13, 2022 meaning thereby only 17 days of time has been allowed to file the manual returns, which is insufficient as provided under the law.
The IRIS portal is calculating incorrect tax liability on gain on sale of immovable properties in violation of section 37(1A) of the Income Tax Ordinance, 2001 which needs to be taken care off as soon as possible.
The IRIS portal is calculating incorrect tax on profit/yield on Bahbood Certificates/ Pensioner’s Benefit Account/ Shuhada Family Welfare Account in violation of clause (6) of Part-III, 2nd Schedule of the Income Tax Ordinance, 2001, which provides that tax shall not exceed 10 percent of such Profit/ Yield.
READ MORE: PTBA suggests measures to resolve refund adjustment ahead return filing deadline
There lies no option list in drop downs country and currency under Code “7006” having description “Investment (Non-Business) (Account / Annuity / Bond / Certificate / Debenture / Deposit / Fund / Instrument / Policy / Share / Stock / Unit, etc.)” due to which a taxpayer remains unable to file the Foreign Income & Assets Statement under section 116A(1) of the Ordinance.
Opening wealth is being shown in “Reconciliation of Net Assets” Value of opening net assets is being shown under code ‘703002’ despite the fact that the taxpayer’s residency status is selected as “non-resident” for Tax Year 2022 after which, he should not be required to file the wealth statement including reconciliation of net assets.
The withholding rates on payment of Dividend @ 7.5 per cent, 15 per cent and 25 per cent, (under section 150 of the Ordinance) are appearing in the Income Tax Return Form of “Income for a person deriving income only from salary and other sources and the Column Code 64330052 (Dividend u/s 150 @25 per cent) is missing.
Proviso was inserted under section 22(2) of the Tax Ordinance by Finance Act, 2020 whereby depreciation on additions to fixed assets made after 01-Jul-2020 would be reduced by 50 per cent However, when entries related to written down values are entered in in depreciation schedule as opening values, the IRIS is calculating depreciation at 50 per cent on total values.
-
Customs examiner penalized for submitting misleading lab reports
ISLAMABAD: Federal Board of Revenue (FBR) has imposed major penalty upon a Customs chemical examiner for submitting wrong / misleading laboratory reports.
According to details disciplinary proceedings under the Civil Servants (Efficiency & Discipline) Rules, 2020 were initiated against Aftab Ahmad, Assistant Chemical Examiner (BS-17), while posted at Collectorate of Customs, Port Muhammad Bin Qasim, Karachi on July 13, 2021.
READ MORE: FBR allows refund adjustment to facilitate return filing
Engr. Habib Ahmed the then Additional Collector (PCS/BS-19), Collectorate of Customs (Exports), Karachi was appointed as Inquiry Officer to conduct inquiry on account of various omission and commission committed by the accused officer constituting “Inefficiency” and “Misconduct”.
The inquiry officer submitted in the report on April 09, 2022 according to which the charges of “Inefficiency” and “Misconduct” were established against the accused officer.
On the basis of inquiry report, a show cause notice was issued on May 28, 2022 to Aftab Ahmad, Assistant Chemical Examiner (BS-17), Collectorate of Customs Appraisement (West), Karachi.
READ MORE: FPCCI seeks statutory time for return filing after error removals
He submitted reply to the Show Cause Notice, which was received in the Board on June 29, 2022, wherein he denied all the allegations/charges and requested that the Show Cause Notice is illegal and requires to be withdrawn.
He also requested personal hearing enabling him to explain his case in person as well.
In order to meet the ends of justice, opportunity of personal hearing was granted to the accused and the Authority appointed Member (Admn/HR) as Hearing Officer.
On August 22, 2022, the accused officer appeared before the Hearing Officer. During the course of personal hearing, the submissions made by the accused officer were found without evidence and merits for submitting wrong/misleading laboratory test reports.
READ MORE: FBR advised to extend tax return filing date for three months
Moreover, the Hearing Officer had observed that the accused officer had nothing new to say in his defense. Accordingly, the case was submitted to the Authority i.e. Secretary Revenue Division/Chairman, FBR for decision.
The Authority i.e. Secretary Revenue Division/Chairman, FBR, after having carefully considered the record of the case, the Inquiry Report, reply to the Show Cause Notice and submission made by the accused during the personal hearing before the Hearing Officer, observed that charges of “Inefficiency” and “Misconduct” under Rule 3(a) & (b) of Civil Servants (Efficiency & Discipline) Rules, 2020 stand established against the accused officer.
READ MORE: PTBA suggests measures to resolve refund adjustment ahead return filing deadline
The Authority, therefore, imposed major penalty of “Reduction to a Lower Post as Deputy Assistant Chemical Examiner (BS-16)” for a period of three (3) years”, upon Aftab Ahmad, Assistant Chemical Examiner (BS-17), under Rule 4(3)(b) of the Civil Servants (Efficiency & Discipline) Rules, 2020.
-
PTBA identifies ambiguity in property value declaration
Pakistan Tax Bar Association (PTBA) on Tuesday identified ambiguity in declaring of immovable property in income tax return filing.
PTBA President Rana Munir Hussain in a letter to the chairman of Federal Board of Revenue (FBR) stated that the apex tax bar had received several representations from the members of different affiliated tax bars across the country; one of the reasons of delay in filing of Income Tax Return for the Tax Year 2022 in is an ambiguity in declaration of value of the properties purchased and sold during the year.
READ MORE: FBR allows refund adjustment to facilitate return filing
The said burning issues need the consideration of the FBR in the light of prevailing circumstances.
In this respect tax bar summarized the following questions: –
Question No. 1
A tax payer sold his immovable property in consideration of Rs.6,000,000/- through a written agreement to sell during the tax year 2022 and received the said amount in shape of pay order as provided u/s 75A of the Income Tax Ordinance 2001.
READ MORE: FPCCI seeks statutory time for return filing after error removals
Whereas at the time of execution of sale deed the parties were compelled to mention the sale price at Rs.7,500,000/- as per rate notified by the D.C being minimum price.
The PTBA urged the FBR to clarify that can the tax payer (seller) incorporate the sale proceed at Rs.7,500,000/- as appearing on the registered sale deed in his wealth reconciliation statement or he will have to record the actual consideration of Rs.6,000,000/- received from the buyer?
Question No. 2
A tax payer sold his immovable property through agreement to sell in consideration of Rs.40,000,000/- and received the said amount in shape of pay order as provided u/s 75A of the Ordinance.
READ MORE: FBR advised to extend tax return filing date for three months
Sale deed was executed at Rs.45,000,000/- being the minimum price notified by D.C.
On the other hand, the seller as well as the buyer paid the tax u/s 236C and 235K at the value fixed by FBR i.e. Rs.6,500,000/-.
Clarification is sought.
Whether the seller can record in his wealth statement the amount at Rs.65,000,000/- whereas in actual, he received Rs.40,000,000/-.
What price of the asset has to declared by the buyer in his wealth statement?
READ MORE: PTBA suggests measures to resolve refund adjustment ahead return filing deadline
The actual price paid at Rs.40,000,000/- ; OR
The price fixed by D.C. at Rs.45,000,000/-; OR
The price fixed by FBR at Rs.65,000,000/-.
In the light of the submissions made above it is requested to issue a clarification as early as possible. Moreover, timely decision taking in this regard would not only be appreciated by the taxpayers/legal fraternity, who are working very hard day and night by playing their part towards the legal responsibility for contributing towards national exchequer but also in collection of taxes at the appropriate time.
-
FBR allows refund adjustment to facilitate return filing
ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday allowed refund adjustment to facilitate taxpayers in filing returns for tax year 2022.
The FBR said it had received a number of representations from various Tax bars, businesses and other stakeholders on the issue of non-availability of refund adjustment tab in the return forms available in the Iris, an online portal of FBR for return filing.
READ MORE: FPCCI seeks statutory time for return filing after error removals
In order to ensure smooth filing of returns and to improve ease of doing business and decrease cost of compliance of taxpayers, the revenue board has enabled refund adjustment tab in the return forms.
“This facility will enable taxpayers to adjust their pending refund claims against admitted liability of Tax Year 2022 at the time of filing of tax returns who had filed applications to claim their outstanding refunds of previous years,” the FBR said.
READ MORE: FBR advised to extend tax return filing date for three months
In this regard it is informed that refunds applications filed up to September 09, 2022 are eligible for adjustment of refunds.
“This facility is available to all taxpayers who have not claimed excess adjustment against previous years’ refunds,” the FBR added.
Previously, the Pakistan Tax Bar Association (PTBA) and affiliated tax bars in the country strongly criticized the FBR for denying the right of adjusting past years refunds against current liability.
READ MORE: PTBA suggests measures to resolve refund adjustment ahead return filing deadline
The PTBA on September 24, 2022 approached the FBR chairman to resolve the issue and the apex tax bar also suggested measures to facilitate taxpayers in this regard.
It said that adjustment of earlier refunds due, in the cases against admitted tax liability for Tax Year 2022 is a statutory right of a taxpayer, which has always been acknowledged, even by the system of IRIS from years to years.
Tax Year 2022 is the first Tax Year where for the key to claim adjustment of refund in the return form available on portal, has been blocked without assigning any plausible legal justification.
The sole stance of the officials of FBR in this respect is that various tax payers claim refunds in their returns which is not admissible.
READ MORE: Penalties for failure to file return tax year 2022 within due date
“We wish to bring on record that PTBA would never support any such illegal action of any person and at the same time it is submitted that the responsibility to verify the authenticity of refund was on the field formations of the FBR who never took any pain to verify the claim of refunds at their own,” the apex tax bar said.
On the other side facility to adjust refund against admitted tax liability for Tax Year 2022 has been taken away due to which the taxpayers have been forced to pay tax in cash, no matter how much refund is due to them.
-
FPCCI seeks statutory time for return filing after error removals
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the apex trade body of the country, has urged the tax authorities to give statutory time for filing tax return after removing all errors in the return form.
“Proper legal time for compliance should be granted as per the statute after resolving all problems in the tax return forms,” said Suleman Chawla in a letter sent to Asim Ahmad, chairman, Federal Board of Revenue (FBR).
READ MORE: FBR advised to extend tax return filing date for three months
The apex trade body pointed out numerous errors and mistakes in the return forms on the Iris – the online filing portal of the FBR – both technical, related to IT, and legal.
Due to the technical errors the tax filers are reluctant to pay undue taxes, and their consultants remain unable to file the returns, the FPCCI said in the letter sent on September 24, 2022.
“It is regretful to note that none of the issues have been addressed as yet and, therefore, the pace of compliance of filing the tax returns is very slow,” Suleman Chawla said.
READ MORE: PTBA suggests measures to resolve refund adjustment ahead return filing deadline
The FPCCI highlighted the following issues in its letter to the FBR chairman:
Column for adjustment of brought forward capital losses under the head of capital gains tax is not available in income tax returns form due to which tax on capital gain cannot be calculated correctly.
The column of tax credit for specified industrial undertaking under section 65G of the Income Tax Ordinance, 2001 is inadvertently available in the tax credit annexure of income tax return for salaried individuals, which has no correlation with such tax credit.
READ MORE: Penalties for failure to file return tax year 2022 within due date
Column for adjustment of brought forward capital losses under the head of capital gains is not available in Income tax return form due to which tax on capital gain cannot be calculated correctly.
The Column of tax credit for specified industrial undertakings u/s 65G of the Income Tax Ordinance, 2001 is inadvertently available in the Tax Credits Annexure of income tax return for salaried individuals, which has no correlation with such tax credit.
Although the rate of tax on contract receipts under section 153 was reduced from 7.5% to 7% for Tax Year 2022, however, there is no column for such reduced rate in the return for the TY 2022 available on IRIS.
The draft of manual return forms for the Individuals and AOPs for the Tax Year 2022 was issued belatedly on August 26, 2022, whereas the final SRO. 1733(1)/2022 was issued on September 13, 2022 meaning thereby only 17 days of time has been allowed to file the manual returns, which is insufficient as provided under the law.
READ MORE: FBR fails to remove return filing glitches; KTBA seeks legal time
The IRIS portal is calculating incorrect tax liability on gain on sale of immovable properties in violation of section 37(1A) of the Income Tax Ordinance, 2001 which needs to be taken care off as soon as possible.
The IRIS portal is calculating incorrect tax on profit/yield on Bahbood Certificates/ Pensioner’s Benefit Account/ Shuhada Family Welfare Account in violation of clause (6) of Part-III, 2nd Schedule of the Income Tax Ordinance, 2001, which provides that tax shall not exceed 10 percent of such Profit/ Yield.
There lies no option list in drop downs country and currency under Code “7006” having description “Investment (Non-Business) (Account / Annuity / Bond / Certificate / Debenture / Deposit / Fund / Instrument / Policy / Share / Stock / Unit, etc.)” due to which a taxpayer remains unable to file the Foreign Income & Assets Statement under section 116A(1) of the Ordinance.
Opening wealth is being shown in “Reconciliation of Net Assets” Value of opening net assets is being shown under code ‘703002’ despite the fact that the taxpayer’s residency status is selected as “non-resident” for Tax Year 2022 after which, he should not be required to file the wealth statement including reconciliation of net assets.
The withholding rates on payment of Dividend @ 7.5%, 15% and 25%, (under section 150 of the Ordinance) are appearing in the Income Tax Return Form of “Income for a person deriving income only from salary and other sources and the Column Code 64330052 (Dividend u/s 150 @25%) is missing.
Proviso was inserted under section 22(2) of the Tax Ordinance by Finance Act, 2020 whereby depreciation on additions to fixed assets made after 01-Jul-2020 would be reduced by 50% However, when entries related to written down values are entered in in depreciation schedule as opening values, the IRIS is calculating depreciation at 50% on total values.
In addition to above, what lately has been done by FBR is that it has deleted the column of “Adjustment of Refunds”, which is certainly an afterthought while the Manual Tax Returns, which were issued vide SRO 1612(I)/2022 dated 26 August, 2022 do retain the “Column of Tax Return Refund”. There is no explanation or justification for this glaring disparity, which is to be taken care of the clarification of Taxpayers.
Online Refund Adjustment Column is still not available on Return loaded on IRIS irrespective of the fact that it is available in the SRO issued by Board.
Profit on debt/interest income on government securities is subject to FTR
-
FBR advised to extend tax return filing date for three months
KARACHI: The Federal Board of Revenue (FBR) has been advised to extend the last date for filing income tax returns at least for next three months.
Muhammad Idrees, President, Karachi Chamber of Commerce and Industry (KCCI) in a letter sent to the Finance Minister on Monday requested to issue to the FBR for extension in last date for filing income tax returns from September 30, 2022 to December 31, 2022 keeping in view the unusual situation emerging all over the country due to recent rainfalls and flash floods.
READ MORE: PTBA suggests measures to resolve refund adjustment ahead return filing deadline
KCCI President stated that the chamber was constantly being approached by the members of the business and industrial community and also by the people belonging to different walks of life who wanted the last date to be extended till December 31.
READ MORE: Penalties for failure to file return tax year 2022 within due date
“Due imposition of ban on imports which was followed by unusual situation all over the country emerging after torrential rainfalls and flashfloods, the taxpayers, particularly the members of the business & industrial community, are facing a lot of problems as a large portion of receivables from various parts of the country badly hit by floods are still pending,” he said, adding that it was a well-known fact that the business, commercial, agricultural and all other activities in the flood-hit areas have come to a total halt which has created serious cashflow issues and it will take at least two more months to return to normalcy.
READ MORE: FBR fails to remove return filing glitches; KTBA seeks legal time
In this scenario, it has become inevitable to provide relief to loyal taxpayers in shape of extension in last date hence, keeping in view the ground realities, he requested the Finance Minister to order FBR to extend the last date for filing income returns to December 31, 2022 which will be widely welcomed by the loyal taxpayers from all over the country.
READ MORE: FBR advised to fix glitches for smooth filing of income tax returns
-
PTBA suggests measures to resolve refund adjustment ahead return filing deadline
Pakistan Tax Bar Association (PTBA) has suggested measures to tax authorities to resolve the issue of refund adjustment just ahead of the deadline to file income tax return tax year 2022.
It is important to note that the last date for filing income tax return is September 30, 2022.
READ MORE: Penalties for failure to file return tax year 2022 within due date
The Federal Board of Revenue (FBR) has blocked the adjustment of previous years’ refunds in the income tax return form for the tax year 2022. PTBA and its affiliated tax bars raised the issues on various times but the issue is not resolved so far.
The PTBA on September 24, 2022 once again approached the FBR chairman to resolve the issue and the apex tax bar also suggested measures to facilitate taxpayers in this regard.
It said that adjustment of earlier refunds due, in the cases against admitted tax liability for Tax Year 2022 is a statutory right of a taxpayer, which has always been acknowledged, even by the system of IRIS from years to years.
READ MORE: FBR fails to remove return filing glitches; KTBA seeks legal time
Tax Year 2022 is the first Tax Year where for the key to claim adjustment of refund in the return form available on portal, has been blocked without assigning any plausible legal justification.
The sole stance of the officials of FBR in this respect is that various tax payers claim refunds in their returns which is not admissible.
“We wish to bring on record that PTBA would never support any such illegal action of any person and at the same time it is submitted that the responsibility to verify the authenticity of refund was on the field formations of the FBR who never took any pain to verify the claim of refunds at their own.”
On the other side facility to adjust refund against admitted tax liability for Tax Year 2022 has been taken away due to which the taxpayers have been forced to pay tax in cash, no matter how much refund is due to them.
READ MORE: FBR advised to fix glitches for smooth filing of income tax returns
It would not be out of place to mention here that there are plethora of cases decided by the Courts of the Country that the taxpayer cannot be deprived of his right to claim admissible refunds either in cash or through adjustment of same against his any tax liability payable under the law.
The Federal Tax Ombudsman (FTO) Vide order dated 27-05-2022 in an own motion case has recommended to grant adjustment of the refund against admitted tax liability in terms of section 170(3)(a) of the Ordinance
The PTBA suggested following steps to resolve the issue of adjustment of refunds:
1. In the column of refund adjustment in return available on portal there may be a link to specify the Tax Year where from the tax payer is making adjustment of Refund.
2. The returns from Tax Year 2014 onward have been submitted through IRIS and every return submitted by the tax payer is clearly depicting the amount of refund claimed by the tax payer.
3. For example, if the tax payer claims the refund adjustment from Tax Year-2016, the system should automatically check that either any refund for Tax Year 2016 is claimed and appearing on the return for Tax Year 2016 or not.
READ MORE: Dental practitioners directed to get sales tax registration
4. If refund is claimed and appearing on the return of Tax Year 2016, the system should allow the tax payer to claim refund adjustment against his tax demand for Tax Year 2022.
5. After submission of tax return for Tax Year 2022, the concerned officer holding jurisdiction over the case be made responsible to first verify the withholdings/payments made by the tax payer in the year from which refund adjustment has been claimed by the tax payer through ITMS.
6. If the data available on ITMS verifies the deductions, collections and payments made and claimed by the taxpayer, no further action would be required except making adjustment entries in the DCR regarding adjustment of refund for Tax Year 2016 against tax demand for Tax Year 2022, so that the taxpayer may not be able to claim the same refund again.
7. If data available on ITMS does not match with the claim of the taxpayer, then the concerned officer should call the tax payer to explain his position in line with post refund audit under the Sales Tax Act.
8. If the tax payer fails to verify his claim of refund, then a strict action may be taken against that tax payer in accordance with the relevant provisions of law.
9. A time line be fixed for verification of the claim of refund by the concerned officer, so that, the matter may not be kept pending for indefinite period.
The PTBA said that in the light of the submissions made above it is requested that the taxpayers may not be deprived from their statutory right to claim the refund adjustment of other year(s) against demand of this year.
Moreover, timely decision taking in this regard by this good office would not only be appreciated by the taxpayers/legal fraternity, who are working very hard day & night by playing their part towards the legal responsibility for contributing towards national exchequer but also in collection of taxes at the appropriate time.