SIALKOT: The Federal Board of Revenue (FBR) has directed field formations to stop issuing blanket exemption certificates to government departments from payment of advance tax under section 231 B of the Income Tax Ordinance,2001 at the time of registration and transfer of motor vehicles.
In this regard, the FBR has issued instructions to Regional Tax Offices on the exemption certificate issued to government departments under section 231 B. The FBR has further directed the RTOs to check misuse of the facility and do not issue exemption certificates to government departments without purchase invoices, sources said.
According to FBR sources, advance tax under section 231 B of the Income Tax Ordinance,2001 is chargeable on private motor vehicles and it is collected by provincial and federal excise and taxation departments at the time of registration and transfer of motor vehicles.
The FBR has observed that applications for grant of exemption under section 231 B are received from government departments claiming blanket exemption and the same are issued by various RTOs, without requisitioning necessary details and documents, i.e purchase invoices which are essential for processing of such cases. It is, therefore, desired that following aspects may be kept in view and essential details/documents may be obtained while granting the said exemption. Firstly, no blanket exemption certificate it to be issued in any case. Any such issuance shall be treated as prejudicial to the interest of revenue.
Secondly, while processing exemption cases under section 231 B detailed information about the vehicles indicating it’s make, model, chassis and engine number and capacity may be obtained, examined ant made integral part of the certificate.
Thirdly, irrespective of the status of claimant department, purchase invoices may be obtained in order to ascertain the actual ownership and to ensure that the vehicles to the registered are actually purchased by the government organizations claiming exemption.
Fourthly, in case any instance of mis-declarstion is detected the same may be notified to the management of concerned government department under intimation to IR-Wing the FBR added.
