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Tag: RTO-II Karachi

  • RTO-II Karachi seals Baklava Palace for integration failure

    RTO-II Karachi seals Baklava Palace for integration failure

    KARACHI: Regional Tax Office (RTO) – II, Karachi on Monday sealed a sweet shop i.e. M/s. Baklava Palace for failure to mandatory integrate with online system.

    RTO – II, Karachi, an arm of the Federal Board of Revenue (FBR), while continuing its crackdown against non-compliant Tier-1 retailers, sealed the business premises of M/s. Baklava Palace, located at Khayaban-e-Shamsheer, DHA Phase V, Karachi.

    READ MORE: RTO-II Karachi seals electronics shop for integration failure

    The RTO –II Karachi during its drive against non-compliant Tier-1 Retailers had sealed many other retail outlets including Dhamtal and Rafi Electronics.

    According to officials at Zone-III, RTO-II, Karachi said that the tax office had already passed an order on January 01, 2022 against the Tier-1 retailer for mandatory integration.

    “M/s. Baklava Palace (NTN 2668310-5) is conducting taxable activities as a retailer and comes under the purview of Tier-1 retailer as defined under clause (a) and (e) of Section 2(43A) of the Sales Tax Act, 1990.

    READ MORE: FBR issues procedure for restoration of input tax adjustment

    “As per 2nd provisio of Section 3(9A) of the Sales Tax Act, 1990, read with clause (2) of Rule 150ZEA of the Sales tax Rules, 2006, they were required to integrate their Point of Sale (POS)/retail outlet with the FBR’s computerized system for real-time reporting of sales in the mode and manner prescribed in Chapter XIV-AA of the Sales Tax Rules, 2006.

    “The taxpayer is also included in STGO No. 16 of 2022 dated May 06, 2022. However, record shows that M/s. Baklava Palace has not integrated their POS / retail outlet till date,” the official told PkRevenue.com

    All the Tier-1 retailers are required to integrate with the FBR under Section 33 of the Sales Tax Act, 1990. The RTO-II had warned the Tier-1 retailer that in case it failed to integrate in the manner as required under the Sales Tax Act, 1990 and the rules made thereunder, the business premises will be sealed.

    READ MORE: POS service fee issue hampers sales tax return filing

    Under the Sales tax Act. 1990: it is an offence: “A person required to integrate his business as integrated under sub-section (9A) of Section 3, who fails to get himself registered under the Act, and if integrated, fails to integrate in the manner as required under the law and rules made thereunder.”

    The penalties for the offence are included as:

    (i) penalty of five hundred thousand rupees for first default;

    (ii) penalty of one million rupees for second default after fifteen days of order for first default;

    (iii) penalty of two million rupees for third default after fifteen days of order for second default;

    (iv) penalty of three million rupees for fourth default after fifteen days of order for third default:

    READ MORE: FBR issues list of 185 retailers for mandatory integration

    Notwithstanding above, the business premises of such person shall be liable to be sealed by an officer of Inland Revenue in the manner prescribed.

    Provided that if the retailer integrates his business with the Board’s Computerized System before imposition of penalty for second default, penalty for first default shall be waived by the Commissioner.

  • RTO-II Karachi seals electronics shop for integration failure

    RTO-II Karachi seals electronics shop for integration failure

    KARACHI: Regional Tax Office (RTO) – II, Karachi on Saturday sealed a shop of electronics goods for failure to mandatory integrate with online system.

    RTO – II, Karachi, an arm of the FBR, while continuing its crackdown against non-compliant Tier-1 retailers, sealed the business premises of M/s. Rafi Electronics located at Gulshan e Iqbal, Karachi.

    READ MORE: FBR issues procedure for restoration of input tax adjustment

    The tax authorities also imposed an amount of Rs500,000 as penalty for non-compliance.

    According to officials at Zone-III, RTO-II, Karachi said that the tax office had already passed an order on January 01, 2022 against the Tier-1 retailer for mandatory integration. Further, the penalty amount of Rs500,000 was also imposed for non-compliance.

    “The retailer despite receiving the order has failed to install Point of Sale (POS) and integrate the unit till the sealing of the unit,” an official said.

    READ MORE: POS service fee issue hampers sales tax return filing

    All the Tier-1 retailers are required to integrate with the FBR under Section 33 of the Sales Tax Act, 1990. The RTO-II had warned the Tier-1 retailer that in case it failed to integrate in the manner as required under the Sales Tax Act, 1990 and the rules made thereunder, the business premises will be sealed.

    Under the Sales tax Act. 1990: it is an offence: “A person required to integrate his business as integrated under sub-section (9A) of Section 3, who fails to get himself registered under the Act, and if integrated, fails to integrate in the manner as required under the law and rules made thereunder.”

    The penalties for the offence are included as:

    (i) penalty of five hundred thousand rupees for first default;

    READ MORE: FBR issues list of 185 retailers for mandatory integration

    (ii) penalty of one million rupees for second default after fifteen days of order for first default;

    (iii) penalty of two million rupees for third default after fifteen days of order for second default;

    (iv) penalty of three million rupees for fourth default after fifteen days of order for third default:

    Notwithstanding above, the business premises of such person shall be liable to be sealed by an officer of Inland Revenue in the manner prescribed.

    Provided that if the retailer integrates his business with the Board’s Computerized System before imposition of penalty for second default, penalty for first default shall be waived by the Commissioner.

    READ MORE: Adjustment restrictions hamper return filing by retailers

  • BTB efforts help RTO-II Karachi to post unprecedented 60% growth: CCIR

    BTB efforts help RTO-II Karachi to post unprecedented 60% growth: CCIR

    KARACHI: The efforts of tax officials for broadening the tax base (BTB) helped Regional Tax Office (RTO)-II Karachi to achieve above 60 percent revenue collection growth in February 2020.

    (more…)
  • Tax collection from rental income surges by 68% on better enforcement

    Tax collection from rental income surges by 68% on better enforcement

    The Regional Tax Office (RTO)-II Karachi has reported a remarkable surge in tax collection from property income during the first eight months (July-February) of the current fiscal year, marking a significant increase of 68 percent.

    (more…)
  • Criminal proceedings against officials of RTO-II Karachi in fake sales tax refunds ordered

    Criminal proceedings against officials of RTO-II Karachi in fake sales tax refunds ordered

    KARACHI: Federal Tax Ombudsman (FTO) has directed tax authorities to initiate criminal proceedings against officials involved in processing bogus sales tax refunds.

    In an own motion in bogus refunds, the FTO observed that failure of the Regional Tax Office (RTO)-II Karachi to initiate action against the persons/officials involved in registration of fake refund payment and retrieval of refund already issued prior to issuance of red alert, was tantamount to maladministration.

    The FTO ordered the FBR to:

    — direct the Chief Commissioner Inland Revenue, RTO-II Karachi to investigate and identify the officials involved in registration of fake RP and initiate legal action against those found involved;

    — identify the officers/officials who were involved in processing bogus sales tax refund on the basis of fake and flying invoices and issuing refund pertaining to tax period August 12 and take appropriate criminal/disciplinary action against them.

    — initiate appropriate action including criminal proceedings leading to prosecution of RPO and recovery of amount of Rs3 million, swindled from public exchequer.

    The FTO directed the tax authorities to ensure compliance of the order within 45 days from the issuance of the order i.e. February 24, 2020.

    The tax ombudsman in its own motion initiated investigation in irregularities committed by the FBR field formations in processing and sanctioning of bogus sales tax refunds during the period 2011-2014 identified by Directorate General Intelligence and Investigation of FBR and ‘Red Alerts’ were issued to the field formations concerned but neither any action was initiated against the fake claimants nor their connivers in the department, who were involved in bogus registration, processing and sanctioning of fraudulent refund and issuance of refund cheques, nor against the related officers/officials of bank branches concerned and PRAL management.

    The FBR issued the instance order in the case of M/s Victory International, engaged in the manufacturing of plastic products.
    The investigation of I&I FBR revealed that the RP got registered on November 11, 2010 as a manufacturer of plastic product but claimed refund of Rs3 million for tax period August 2012 on the basis of fake invoices issued by irrelevant suppliers from paper, steel, electric sectors therefore the whole activity chain was treated as engineered with aim to obtain illegal refund.

  • Tax authorities capture huge cash transactions of dress designers; start assessment

    Tax authorities capture huge cash transactions of dress designers; start assessment

    KARACHI: Tax authorities have captured millions of rupees cash transactions by many dress designers. The authorities are now making assessment on the basis of such transactions for imposing income tax for past five years, sources said on Wednesday.

    The sources said that the tax authorities had captured the cash transactions while disguising themselves as customers during their visits to those places where mostly wedding dresses were being displayed for sale.

    Regional Tax Office (RTO) II, Karachi, a revenue collecting arm of Federal Board of Revenue (FBR), identified such dress designers, who were evading income tax. The office issued notices to explain the reasons of very low amount of tax payment or no payment of tax at all.

    The tax office during survey found that there was a sector of marriage dress designers, who charge exorbitant amount for the bridal dress making.

    Some of the designer even charge millions for a single dress but when their income tax returns were analyzed it was found that quite a large number of these dress designers are paying very meager amount of tax i.e. their declared income does not commensurate with their receipts.

    Some of them are even not on tax roll.

    The RTO-II Karachi identified the following dress designers:

    01. Shehrnaz

    02. Nada Tai

    03. Aisha Ahmed

    04. Wardha Saleem

    05. Sanam Chaudhri

    06. Sania Maskatiya

    07. Cartes by Pasho

    08. Silhouettes by Ash & Uzma

    09. Nida Azwer

    10. Waqar J. Khan

    11. Kavalier Laser Cut Innovations

    12. Rozina Munib

    13. Ayesha Sarfaraz

    14. Farida Qureshi

    15. Saleha

    16. Mahin

    17. Natasha Kamal

    18. Basic

    19. Sarah Arshad Gilani

    20. Amna Chaudhry

    21. Chikankari

    22. House of Farah V

    23. Sable Vogue

    24. Zuri by Zainab Fawad

    The sources said that the returns of above were being analyzed and desk audit was being conducted.
    The information obtained about their income would be cross matched with declared income and wealth statement filed and withholding statement filed by withholding agents.

    The tax office estimated huge loss of revenue would be detected.

    Notices under section 176 of Income Tax Ordinance, 2001 have been issued and further progress would be finalized by February 27, 2020.

  • Criminal proceeding initiated in sales tax refunds issuance on bogus invoices

    Criminal proceeding initiated in sales tax refunds issuance on bogus invoices

    KARACHI: Regional Tax Office (RTO)-II Karachi has initiated criminal proceeding against persons involved in obtaining sales tax refunds on fake and flying invoices.

    According to statement on Tuesday, the tax office had unearthed a gang of fraudsters who were engaged in tax fraud on the strength of bogus/fake/flying invoices and claimed dubious/bogus Rs230 million sales tax refunds.

    The declared business activity of the units does not match with the nature of goods/raw materials against which purchases / imports have been shown and subsequently bogus inputs have been claimed.

    As per chain inquiry, there were dummy buyers and only doing paper transactions.

    The RTO-II Karachi lodged FBR against units included: M/s Oriental Chemcial Industries; M/s. Premier Industries/Paramount Industries; M/s. Younus Enterprises/Escord Industries.

    The tax office said that the accused/owners of these bogus units were not available in the declared business address. However following measures were taken to retrieve loss of revenue by RTO-II Karachi:

    (a) FIRs have been lodged against the all three accused persons/owners before special judge (customs and taxation) Karachi and criminal proceedings have been initiated under Section 37A of the Sales Tax Act, 1990.

    (b) Names of owners of M/s. Oriental Chemical Industries, M/s. Paramount Industries and M/s. Escord Industries have been sent for Exit Control List (ECL).

    The tax office said that all the three cases had been suspended / blacklisted under Section 21(2) of the Sales Tax Act, 1990.

    It further said that the bank accounts have been attached for recover under Section 48 of the Sales Tax Act, 1990.

    “Letters to all banks have also been written for getting information about the beneficiary bank accounts, whereby, cheques issued as result of the generated RPOs were deposited.”

    Letters to registrar offices, Bahria Town and DHA Karachi have also been written to get information about properties/assets for recovery purpose.

  • Withholding tax collection on profit from bank deposits surges by 194pc

    Withholding tax collection on profit from bank deposits surges by 194pc

    KARACHI: The collection of withholding tax from profit on bank deposits registered unprecedented growth of 194 percent during first quarter of first fiscal year as the tax rates increased by 100 percent for persons not on the Active Taxpayers List (ATL).

    Sources in Regional Tax Office (RTO) –II Karachi said that the withholding tax collection under Section 151(1)(b) of Income Tax Ordinance, 2001 increased to Rs14.56 billion during first quarter (July – September) of fiscal year 2019/2020 as compared with Rs4.95 billion in the corresponding period of the last fiscal year.

    The sources explained that under Section 151(1)(b) withholding tax is collected on profit on debt paid by banking companies or financial institutions on account or deposit maintained.

    Every banking company is required to collect 10 percent of the gross yield/profit paid up to Rs500,000 or 15 percent of the gross yield / profit paid exceeding amount Rs500,000 at the time the profit on debt is credited to the account of the recipient or is actually paid, whichever is earlier.

    The sources said that it is mandatory for the banks to collect double the amount of withholding tax from those persons receiving profit on debt but not on the Active Taxpayers List (ATL).

    The government through Finance Act, 2019 introduced 10th Schedule to the Income Tax Ordinance, 2001 to enhance the rate of withholding tax by 100 percent on certain transactions.

    The measure has been taken to force persons making large transactions and paying withholding tax on such transactions but remained outside the tax net.

    The sources said that after the implementation of the 10th Schedule the pace of return filing for Tax Year 2018 increased in order to avoid paying 100 percent higher rate of withholding tax.

    According to ATL updated October 21, 2019 the number of return filers were increased to 2.64 million for tax year 2018 as compared with 1.84 million returns received for tax year 2017.

  • RTO-II starts return filing facilitation drive next week

    RTO-II starts return filing facilitation drive next week

    KARACHI: Regional Tax Office (RTO) –II Karachi to launch drive from next week in order to facilitate people to file their annual income tax returns.

    FBR teams will set up camp offices at large corporate and government offices besides visiting markets and shopping plazas to encourage salary and business individuals to file their returns, said Badaruddin Ahmed Qureshi, Chief Commissioner, Inland Revenue, RTO-II, Karachi at a press conference on Friday.

    The chief commissioner said that the purpose of the facilitation drive was to achieve 5 million income tax return filers during next few years. “The FBR has already received over 2.1 million income tax returns for tax year 2018,” the chief commissioner said.

    He further added that the last date for filing income tax returns for tax year 2018 had been extended up to August 02, 2019.

    He said that in order to achieve five million-milestone the FBR launched several measures to encourage / force persons having taxable income to file their returns.

    The chief commissioner said that in first phase the RTO Karachi would ask large corporate entities and provincial departments to assure return filing by their employees having taxable income.

    The tax office identified that employees of large organizations such as Pakistan International Airlines (PIA), National Bank of Pakistan (NBP), Pakistan Railways (PR) had taxable income but were not filing their income tax returns.

    He said that the RTO-II Karachi would set up camp offices at various organizations for the enforcement of return filing. The camp offices would be set up at PIA, NBP, SSGC, Police, KMC, Water Board, Sindh Building Control Authority etc.

    The chief commissioner said that the office had received details of doctors. He said that Pakistan Medical and Dental Council (PMDC) had 68,000 registered doctors out of which only 6,500 were filing annual income tax returns.

    The chief commissioner said that it would be difficult to conceal transactions in future as FBR with the help of other regulators had established electronic system for information sharing.

    The chief commissioner said that the FBR was facing enforcement problems due to human resource capacity but in order to ensure compliance a NGO was being engaged for the task of return filing.

    He said that the tax office had get volunteers from the NGO would file returns of those who did not want to pay fee of lawyers.

    A training session for those volunteers had been held recently at the tax office.