Tag: Sales Tax Act 1990

KARACHI: The sales tax laws have authorized suo moto powers to Federal Board of Revenue (FBR) and Commissioner of Inland Revenue (IR) to call for records from department and taxpayers.

The Section 45 of updated Sales Tax Act, 1990 explained the suo moto powers of FBR and IR commissioner to call for records in any case.

Section 45A: Power of the Board and Commissioner to call for records:

Sub-Section (1): The Board may, of its own motion, or otherwise call for and examine the record of any departmental proceedings under this Act or the rules made there under for the purpose of satisfying itself as to the legality or propriety of any decision or order passed therein by an Officer of Inland Revenue, it may pass such order as it may think fit:

Provided that no order imposing or enhancing any penalty or fine requiring payment of a greater amount of Sales Tax than the originally levied shall be passed unless the person affected by such order has been given an opportunity of showing cause and of being heard.

Sub-Section (2): No proceeding under 9[this section] shall be initiated in a case where an appeal under Section 45B or Section 46 is pending.

Sub-Section (3): No order shall be made under this Section after the expiry of five years from the date of original decision or order of the sub-ordinate officer referred to in sub-section (1).

Sub-Section (4): The Commissioner may, suo moto, call for and examine the record of any proceeding under this Act or the rules made thereunder for the purpose of satisfying himself as to the legality or propriety of any decision or order passed by an officer of Inland Revenue subordinate to him, and pass such order as he may deem fit.

Section 45B: Appeals

Sub-Section (1): Any person, other than the Sales Tax Department, aggrieved by any decision or order passed under sections 10, 11, 25, 36, or 66, by an officer of Inland Revenue may, within thirty days of the date of receipt of such decision or order, prefer appeal to the Commissioner Inland Revenue (Appeals):

Provided that an appeal preferred after the expiry of thirty days may be admitted by the Commissioner Inland Revenue (Appeals) if he is satisfied that the appellant has sufficient cause for not preferring the appeal within the specified period:

Provided further that the appeal shall be accompanied by a fee of one thousand rupees to be paid in such manner as the Board may prescribe.

Sub-Section (1A): Where in a particular case, the Commissioner (Appeals) is of the opinion recovery of tax levied under this act, shall cause undue hardship to the taxpayer, he, after affording opportunity of being heard to the commissioner or officer of Inland revenue against whose orders appeal has been made, may stay the recovery of such tax for a period not exceeding thirty days in aggregate.

Sub-Section (2): The Commissioner Inland Revenue (Appeals) may, after giving both parties to the appeal an opportunity of being heard, pass such order as he thinks fit, confirming, varying, altering, setting aside or annulling the decision or order appealed against:

Provided that such order shall be passed not later than one hundred and twenty days from the date of filing of appeal or within such extended period as the Commissioner (Appeals) may, for reasons to be recorded in writing fix:

Provided further that such extended period shall, in no case, exceed sixty days:

Provided further that any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or the time taken through adjournment by the petitioner not exceeding thirty days shall be excluded from the computation of aforesaid periods.

Sub-Section (3): In deciding an appeal, the Commissioner of Inland Revenue (Appeals) may make such further inquiry as may be necessary provided that he shall not remand the case for de novo consideration.

KARACHI: Authorized officers of Inland Revenue have access to business premises of sales tax registered taxpayers to inspect record of sales and purchases.

According to Section 38 of updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), explained the powers of authorized officers of Inland Revenue to enter business premises for inspecting records.

Section 38: Authorized officers to have access to premises, stocks, accounts and records

Sub-Section (1): Any officer authorized in this behalf by the Board or the Commissioner shall have free access to business or manufacturing premises, registered office or any other place where any stocks, business records or documents required under this Act are kept or maintained belonging to any registered person or a person liable for registration or whose business activities are covered under this Act or who may be required for any inquiry or investigation in any tax fraud committed by him or his agent or any other person; and such officer may, at any time, inspect the goods, stocks, records, data, documents, correspondence, accounts and statements, utility bills, bank statements, information regarding nature and sources of funds or assets with which his business is financed, and any other records or documents, including those which are required under any of the Federal, Provincial or local laws maintained in any form or mode and may take into his custody such records, statements, diskettes, documents or any part thereof, in original or copies thereof in such form as the authorized officer may deem fit against a signed receipt.

Sub-Section (2): The registered person, his agent or any other person specified in sub-section (1) shall be bound to answer any question or furnish such information or explanation as may be asked by the authorized officer.

Sub-Section(3): The department of direct and indirect taxes or any other Government department, local bodies, autonomous bodies, corporations or such other institutions shall supply requisite information and render necessary assistance to the authorized officer in the course of inquiry or investigation under this section.

Section 38A: Power to call for information

The Commissioner may, by notice in writing, require any person, including a banking company, to furnish such information or such statement in connection with any investigation or inquiry in cases of tax fraud, as may be specified in such notice:

Provided that the Commissioner may require any regulatory authority to provide information concerning the licenses and authorizations issued by it.

Section 38B: Obligation to produce documents and provide information

Sub-Section (1): Notwithstanding anything contained in this Act or any other law for the time being in force, any person required to maintain the record under the Act, on demand by an officer, not below the rank of an Assistant Commissioner Inland Revenue, by notice in writing, as and when specified in the notice, shall,–

(a) produce for examination, such documents or records which the officer of Inland Revenue considers necessary or relevant to the audit, inquiry or investigation under the Act;

(b) allow the officer of Inland Revenue to take extracts from or copies of such documents or records; and

(c) appear before the officer of Inland Revenue and answer any question put to him concerning the documents and records relating to the audit or inquiry or investigation referred to in clause (a) above.

Sub-Section (2): An officer of Inland Revenue conducting an audit, inquiry or, as the case may be, an investigation under the Act, may require in writing any person, department, company or organization to furnish such information as is held by that person, department, company or organization, which, in the opinion of the officer of Inland Revenue, is relevant to such audit, inquiry or investigation.

Sub-Section (3): The Board may require, in writing, any person, department, company or organization, as the case may be, to provide any information or data held by that person, department, company or organization, which, in the opinion of the Board, is required for purposes of formulation of policy or administering the Customs, Sales Tax, Federal Excise or Income Tax.

Sub-Section (4): Every person, department, company or organization shall furnish the information requisitioned by the Board or the officer of Sales Tax under sub-section (2) or (3), within the time specified in the notice issued by the Board or, as the case may be, the officer of Inland Revenue.

KARACHI: The sales tax law has authorized officers of Inland Revenue to arrest persons committing fraud or any other offence.

The Section 37A of the updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR) explained the powers of IR officers for making arrests.

Section 37A: Power to arrest and prosecute

Sub-Section (1): An officer of Inland Revenue not below the rank of an Assistant Commissioner of Inland Revenue or any other officer of equal rank authorised by the Board in this behalf, who on the basis of material evidence has reason to believe that any person has committed a tax fraud or any offence warranting prosecution under this Act, may cause arrest of such person.

Sub- Section (2): All arrests made under this Act shall be carried out in accordance with the relevant provisions of the Code of Criminal Procedure, 1898 (Act V of 1898).

Sub-Section (3): deleted

Sub-Section (4): Notwithstanding anything contained in sub-section (1) to subsection (3) or any other provision of this Act, where any person has committed a tax fraud or any offence warranting prosecution under this Act, the Commissioner may, either before or after the institution of any proceedings for recovery of tax, compound the offence if such person pays the amount of tax due along with such default surcharge and penalty as is determined under the provisions of this Act.

Sub-Section (5): Where the person suspected of tax fraud or any offence warranting prosecution under this Act is a company, every director or officer of that company whom the authorized officer has reason to believe is personally responsible for actions of the company contributing the tax fraud or any offence warranting prosecution under this Act shall be liable to arrest; provided that any arrest under this sub-section shall not absolve the company from the liabilities of payment of tax, default surcharge and penalty imposed under this Act.

KARACHI: Any persons attempted to gain unauthorized access to computerized system of Federal Board of Revenue (FBR) is liable to penalty and imprisonment up to one year.

According to updated Sales Tax Act, 1990 issued by the FBR, the person trying to get unlawful access to computerized system would face harsh action.

The law explained:

Any person who,-

(a) knowingly and without lawful authority gains access to or attempts to gain access to the computerized system; or

(b) unauthorizedly uses or discloses or publishes or otherwise disseminates information obtained from the computerized system; or

(c) falsifies any record or information stored in the computerized system; or

(d) knowingly or dishonestly damages or impairs the computerized system; or

(e) knowingly or dishonestly damages or impairs any duplicate tape or disc or other medium on which any information obtained from the computerized system is kept or stored; or

(f) unauthorizedly uses unique user identifier of any other registered user to authenticate a transmission of information to the computerized system; or

(g) fails to comply with or contravenes any of the conditions prescribed for security of unique user identifier.

“Such person shall pay a penalty of twenty-five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher.”

“He shall, further be liable, upon conviction by the Special Judge, to imprisonment for a term which may extend to one year, or with fine which may extend to an amount equal to the loss of tax involved, or with both.”

KARACHI: A person may be penalized up to five year imprisonment for obstructing or denying access any officer of Inland Revenue to the business premises or records.

The updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR) explained offenses and penalties.

As per Section 33 of the Sales Tax Act, 1990 following are offenses and penalties:

Any person who denies or obstructs the access of an authorized officer to the business premises, registered office or to any other place where records are kept, or otherwise refuses access to the stocks, accounts or records or fails to present the same when required under section 25, 38 38A or 40B.

Such person shall pay a penalty of twenty five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher.

“He shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to five years, or with fine which may extend to an amount equal to the loss of tax involved, or with both.”

Any person who, –

(a) submits a false or forged document to any officer of Inland revenue; or

(b) destroys, alters, mutilates or falsifies the records including a sales tax invoice; or

(c) Knowingly or fraudulently makes false statement, false declaration, false representation, false personification, gives any false information or issues or uses a document which is forged or false.

Such person shall pay a penalty of twenty five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher.

“He shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to three years, or with fine which may extend to an amount equal to the amount of tax involved, or with both.”

Any person who commits, causes to commit or attempts to commit the tax fraud, or abets or connives in commissioning of tax fraud.

Such person shall pay a penalty of twenty five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher.

“He shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to five years, or with fine which may extend to an amount equal to the loss of tax involved, or with both.”

Where any person violates any embargo placed on removal of goods in connection with recovery of tax.

Such person shall pay a penalty of twenty five thousand rupees or ten per cent of the amount of the tax involved, whichever is higher.

“He shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to one year, or with fine which may extend to amount equal to the amount of tax involved, or with both.”

KARACHI: The sales tax law has defined fine and penalty for persons fail to file sales tax returns within due date. The law also defined penalty for miscalculation and other obligations.

The updated Sales Tax Act, 1990 issued by the Federal Board of Revenue (FBR) explained the offences and penalties under section 33.

Following are the offences and penalties:

If a person fails to furnish a return within the due date then Such person shall pay a penalty of five thousand rupees:

Provided that in case a person files a return within ten days of the due date, he shall pay a penalty of one hundred rupees for each day of default.

Any person who fails to issue an invoice when required under this Act than such person shall pay a penalty of five thousand rupees or three per cent of the amount of the tax involved, whichever is higher.

Any person who un-authorizedly issues an invoice in which an amount of tax is specified, in such cases the person shall pay a penalty of ten thousand rupees or five per cent of the amount of the tax involved, whichever is higher.

Any person who fails to notify the changes of material nature in the particulars of registration of taxable activity then such person shall pay a penalty of five thousand rupees.

Any person who fails to deposit the amount of tax due or any part thereof in the time or manner laid down under this Act or rules or orders made there under.

Such person shall pay a penalty of ten thousand rupees or five per cent of the amount of the tax involved, whichever is higher:

Provided that, if the amount of tax or any part thereof is paid within ten days from the due date, the defaulter shall pay a penalty of five hundred rupees for each day of default:

Provided further that no penalty shall be imposed when any miscalculation is made for the first time during a year:

Provided further that if the amount of tax due is not paid even after the expiry of a period of sixty days of issuance of the notice for such payments by an officer of Inland Revenue, not below the rank of Assistant Commissioner Inland Revenue, the defaulter shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to three years, or with fine which may extend to amount equal to the amount of tax involved, or with both.

Any person who repeats erroneous calculation in the return during a year whereby amount of tax less than the actual tax due is paid. In that case such person shall pay a penalty of five thousand rupees or three per cent of the amount of the tax involved, whichever is higher.