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Tag: Sales Tax Act 1990

  • Sales Tax Act 1990: One year jail for unauthorized access to FBR computerized system

    Sales Tax Act 1990: One year jail for unauthorized access to FBR computerized system

    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.”

  • Sales Tax Act 1990: 5-year jail for obstructing IR officers to business premises

    Sales Tax Act 1990: 5-year jail for obstructing IR officers to business premises

    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.”

  • Sales Tax Act 1990: penalty for non-filing, miscalculation

    Sales Tax Act 1990: penalty for non-filing, miscalculation

    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.

  • Sales Tax Act 1990: three years imprisonment for persons fail to get registration

    Sales Tax Act 1990: three years imprisonment for persons fail to get registration

    KARACHI: Persons making taxable supplies but failed to get registration with tax department then such persons are liable to three years imprisonment, which may be extendable.

    According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), the fines and penalties had been prescribed for persons deliberately violated the laws.

    According to the law, any person who is required to apply for registration under this Act fails to make an application for registration before making taxable supplies.

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

    Provided that such person who is required to get himself registered under this Act, fails to get registered within sixty days of the commencement of taxable activity, 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 fails to maintain records required under this Act or the rules made there under.

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

    Where a registered person who, without any reasonable cause, in non compliance with the provisions of section 25, –

    (a) fails to produce the record on receipt of first notice;

    (b) fails to produce the record on receipt of second notice; and

    (c) fails to produce the record on receipt of third notice.

    Then such person shall pay a penalty of five thousand rupees;

    such person shall pay a penalty of ten thousand rupees; and

    such person shall pay a penalty of fifty thousand rupees.

    Any person who fails to furnish the information required by the Board through a notification issued under sub-section (5) of section 26.

    Such person shall pay a penalty of ten thousand rupees.

  • Sales Tax Act 1990: FBR may appoint special panels for audit

    Sales Tax Act 1990: FBR may appoint special panels for audit

    KARACHI: Federal Board of Revenue (FBR) has been empowered under sales tax law to appoint special audit panels for conducting audit of any registered person.

    The updated Sales Tax Act, 1990 issued by the FBR, the Section 32A explains the powers of the revenue body for appointment of special audit panels.

    Section 32A: Audit by Special Audit Panels

    Sub-Section (1): The Board may appoint as many special audit panels as may be necessary, comprising two or more members from the following, –

    (a) an officer or officers of Inland Revenue;

    (b) a firm of chartered accountants as defined under the Chartered Accountants Ordinance, 1961 (X of 1961);

    (b) a firm of cost and management accountants as defined under the Cost and Management Accountants Act, 1966 (XIV of 1966); or

    (d) any other person as directed by the Board,

    to conduct audit of a registered person or persons, including audit of refund claims and forensic audit and the scope of such audit shall be determined by the Board or the Commissioner Inland Revenue on a case-to-case basis. In addition, the Board may, where it considers appropriate, also get such audit conducted jointly with similar audits being conducted by provincial administrations of sales tax on services.

    Sub-Section (2): Notwithstanding that records of a registered person have been audited by an officer appointed under section 30, the Board or a Commissioner may direct special audit panel appointed under sub-section (1) to audit the records of any registered person.

    Sub-Section (3): Every member of special audit panel appointed under sub-section (1), shall have the powers of an officer of Inland Revenue under sections 25, 37 and 38.

    Sub-Section (4): Each special audit panel shall be headed by a chairman who shall be an officer of Inland Revenue.

    Sub-Section (5): If any one member of the special audit panel, other than the chairman, is absent from conducting an audit, the proceedings of the audit may continue and the audit conducted by the special audit panel shall not be invalid or be called in question merely on the ground of such absence.

    Sub-Section (6): The Board may prescribe rules in respect of constitution, procedure and working of special audit panel.

  • Sales Tax Act 1990: return filing requirement by registered persons

    Sales Tax Act 1990: return filing requirement by registered persons

    KARACHI: A sales tax registered person is required to file true and correct sales tax return on monthly basis by providing details of supplies and persons whom the supplies were made during the period.

    According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), the Section 26 explained the requirement of filing sales tax return by registered persons.

    Section 26: Return

    Sub-Section (1): Every registered person hall furnish not later than the due date a true and correct return in the prescribed form to a designated bank or any other office specified by the Board [FBR], indicating the purchases and the supplies made during a tax period, the tax due and paid and such other information, as may be prescribed;

    Provided that the Board may, by notification in the official Gazette, require any person or class of persons to submit return on quarterly basis:

    Provided further that the Board may, by notification in the official Gazette, require any person or class of persons to submit such return as may be prescribed annually in addition to the monthly return or quarterly return:

    Provided also that the return filed electronically on the web or any magnetic media or any other computer readable media as may be specified by the Board shall also be deemed to be a return for the purpose of sub-section (1) and the Board may, by notification in the official Gazette, make rules for determining eligibility of the data of such returns and e-intermediaries who will digitize the data of such returns and transmit the same electronically under their digital signatures.

    Sub-Section (2): omitted

    Sub-Section (3): A registered person may, subject to approval of the Commissioner Inland Revenue having jurisdiction, file a revised return within one hundred and twenty days of the filing of return under sub-section (1) or, as the case may be, sub-section (2), or under clause (a) or clause (b) of section 27, to correct any omission or wrong declaration made therein.

    Sub-Section (4): Notwithstanding the penalties prescribed in section 33, if a registered person wishes to file revised return voluntarily along with deposit of the amount of tax short paid or amount of tax evaded along with default surcharge, whenever it comes to his notice, before receipt of notice of audit, no penalty shall be recovered from him:

    Provided that in case the registered person wishes to deposit the amount of tax as pointed out by the officer of Inland Revenue during the audit, or at any time before issuance of the show cause notice, he may deposit the evaded amount of tax, default surcharge under section (34), and twenty five percent of the penalty payable under section 33 along with the levied return:

    Provided further that in case the registered person wishes to deposit the amount after issuance of show cause notice, he shall deposit the evaded amount of sales tax, default surcharge under section 34, and full amount of leviable penalty under section 33 along with the revised return and thereafter, the show cause notice, shall stands abated.

    Sub-Section (5): The Board may, by notification in the official Gazette, require any person or class of persons, for any goods of such description or class, to furnish such summary or details or particulars pertaining to the imports, purchases and supplies during any tax period or periods, in such format as may be specified.

  • Sales Tax Act 1990: tax officials authorized to access record

    Sales Tax Act 1990: tax officials authorized to access record

    KARACHI: The sales tax law has authorized tax officials to access record maintain by registered persons for the purpose of investigation and audit.

    According to updated Sales Tax Act, 1990 issued by the Federal Board of Revenue (FBR), the Section 25 explained maintenance of record by taxpayer and authority of tax department to access the record and conduct audit.

    Section 25: Access to record, documents, etc.

    Sub-Section (1): A person who is required to maintain any record or documents under this Act or any other law shall, as and when required by Commissioner, produce record or documents which are in his possession or control or in the possession or control of his agent; and where such record or documents have been kept on electronic data, he shall allow access to the officer of Inland Revenue authorized by the Commissioner and use of any machine on which such data is kept.

    Sub-Section (2): The officer of Inland Revenue authorized by the Commissioner, on the basis of the record, obtained under sub-section (1), may, once in a year, conduct audit:

    Provided that in case the Commissioner has information or sufficient evidence showing that such registered person is involved in tax fraud or evasion of tax, he may authorize an officer of Inland Revenue, not below the rank of Assistant Commissioner, to conduct an inquiry or investigation under section 38:

    Provided further that nothing in this sub-section, shall bar the officer of Inland Revenue from conducting audit of the records of the registered person if the same were earlier audited by the office of the Auditor-General of Pakistan:

    Provided also that audit under this section shall be conducted only once in every three years.

    Sub-Section (3): After completion of Audit under this section or any other provision of this Act, the officer of Inland Revenue may, after obtaining the registered person’s explanation on all the issues raised in the audit shall pass an order under section (11).

    Sub-Section (4): Omitted

    Sub-Section (5): Notwithstanding the penalties prescribed in section 33, if a registered person wishes to deposit the amount of tax short paid or amount of tax evaded along with default surcharge voluntarily, whenever it comes to his notice, before receipt of notice of audit, no penalty shall be recovered from him:

    Provided if a registered person wishes to deposit the amount of tax short paid or amount of tax evaded along with default surcharge during the audit, or at any time before issuance of show cause notice he may deposit the evaded amount of tax, default surcharge under section 34, and twenty five per cent of the penalty payable under section 33:

    Provided further that if a registered person wishes to deposit the amount of tax short paid or amount of tax evaded along with default surcharge after issuance of show cause notice, he shall deposit the evaded amount of tax, default surcharge under section 34, and full amount of the penalty payable under section 33 and thereafter, the show cause notice, shall stand abated.

    Explanation.– For the purpose of sections 25, 38, 38A, 38B and 45A and for removal of doubt, it is declared that the powers of the Board, Commissioner or officer of Inland Revenue under these sections are independent of the powers of the Board under section 72B and nothing contained in section 72B restricts the powers of the Board, Commissioner or Officer of Inland revenue to have access to premises, stocks, accounts, records, etc. under these sections or to conduct audit under these sections.

  • Sales Tax Act 1990: six years record required to be maintained

    Sales Tax Act 1990: six years record required to be maintained

    As per Section 24 of the Sales Tax Act, 1990, a person engaged in taxable supplies is mandated to preserve records and documents for a period of six years, effective from the end of the tax period to which such records or documents relate.

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  • Sales Tax Act 1990: requirement of issuing tax invoice

    Sales Tax Act 1990: requirement of issuing tax invoice

    KARACHI: A person making taxable supplies is required to issue serially numbered tax invoice at the time of making supply of goods.

    According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), the Section 23 of the Act explained the requirement of issuing tax invoice.

    Section 23: Tax Invoices

    Sub-Section (1): A registered person making a taxable supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars, namely: –

    (a) name, address and registration number of the supplier;

    (b) name, address and registration number of the recipient;

    (c) date of issue of invoice;

    (d) description and quantity of goods;

    (e) value exclusive of tax;

    (f) amount of sales tax; and

    (g) value inclusive of tax:

    Provided that the Board may, by notification in the official Gazette, specify such modified invoices for different persons or classes of persons:

    Provided further that not more than one tax invoice shall be issued for a taxable supply.

    Sub-Section (2): No person other than a registered person or a person paying retail tax shall issue an invoice under this section.

    Sub-Section (3): A registered person making a taxable supply may, subject to such conditions, restrictions and limitations as the Board may, by notification in the official Gazette, specify, issue invoices to another registered person electronically and to the Board as well as to the Commissioner, as may be specified.

    Sub-Section (4): The Board may, by notification in the Official Gazette, prescribe the manner and procedure for regulating the issuance and authentication of tax invoices.

  • Sales Tax Act 1990: maintaining record for taxable supplies

    Sales Tax Act 1990: maintaining record for taxable supplies

    KARACHI: A person making taxable supplies is required to maintain record of goods and keep at his office for scrutiny by tax officials.

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