KARACHI: Federal Board of Revenue (FBR) has been urged provisions of Sales Tax Act, 1990 related to ‘power to arrest’ should not be invoked without going trial of a taxpayer.
In its budget proposals for 2017/2017, the FPCCI said that in the recent past unusual exercise of powers to arrest has been witnessed irrespective of the nature of allegations, past history of the taxpayers and industrial infrastructure set up by them.
“A person having investment in shape of industry cannot fly over night to avoid trial,” FPCCI said.
Any abuse of this most harsh provision of the law resulted in total defamation of the sales tax law and FBR’s administration. Such harsh provision of the law is one of the reasons for narrow sales tax regime during last 20 years.
Persons having large manufacturing setup, public or private limited firms should not be allowed to arrest without prior trial.
The FPCCI said that proposed change will help in curtailment of discretionary powers of tax officials and removal of harassment to taxpayers.
Meanwhile Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has said that short paid sales tax recovery without issuing show cause notice is against the Constitution of Pakistan.
In its budget recommendations for 2017/2018, the FPCCI said that the payment of tax less than the tax indicated in the return is recoverable from registered person without giving him a show cause notice in terms of section 11-A of Sales Tax Act, 1990.
Interestingly, in the existing electronic sales tax filing system there is no provision for short payment. The powers given under 11-A are thus superfluous and unnecessary. There are judgment of the higher courts also against this provision of law.
“The provision is also in direct contradiction of Article 10-A of the Constitution of Pakistan,” the FPCCI said.
The FPCCI said that on the one hand, government is bent upon curtailing the discretionary powers of tax officials to the minimum level whereas on the other hand government is taking measures to enhance their discretionary powers. “It is entirely in contrast to the government policy,” it added.
Therefore, the FPCCI recommended that Section 11A should be omitted / deleted so that no action may be taken without issuance of show cause notice.
