MULTAN: The Federal Board of Revenue (FBR) has directed its field tax offices, including Large Taxpayers Offices (LTOs) and Regional Tax Offices (RTOs), to adopt a standardized approach for the suspension and blacklisting of sales tax registered persons.
These directives aim to ensure uniformity in compliance with Rule 12 of the Sales Tax Rules, 2006, and Section 21(2) of the Sales Tax Act, 1969.
The FBR emphasized that the suspension of a registered person’s status may occur if there is evidence of tax fraud, issuance of fake invoices, or other violations.
Key indicators include non-availability at the declared address, refusal to allow access to business premises, submission of abnormal tax profiles, or transactions with blacklisted entities.
The Commissioner may suspend such registration without prior notice pending further investigation, issuing a written order that must be shared with the concerned person and other relevant offices, including the FBR’s computer systems.
According to the FBR, registered persons who fail to file sales tax returns for six consecutive months will face automatic suspension without prior notification. In cases where a suspended person has dealings with buyers or suppliers under another jurisdiction, the concerned Commissioner must inform the Chief Commissioner of the respective LTO or RTO to initiate appropriate proceedings against these associated entities.
The FBR also clarified that during the period of suspension, the suspended entity is not entitled to claim input tax adjustments or refunds. Additionally, other registered persons cannot claim refunds or input tax adjustments on the basis of invoices issued by the suspended party, irrespective of whether the invoices were issued before or after the suspension.Tax filing services
If no show-cause notice is issued to the suspended person within seven days of suspension, the suspension order becomes void. However, if a notice is issued, the registered person is given 15 days to respond and present records. Based on this response and any hearing provided, the Commissioner may either revoke the suspension or proceed with blacklisting the individual.
In cases of blacklisting, the FBR mandates that the Commissioner issue a detailed, appealable order specifying the reasons and consequences of blacklisting. This includes the inadmissibility of refunds or input tax claims made by the blacklisted entity or its associated parties, as well as any recoveries or penalties to be imposed. Such orders must be issued within 90 days of the notice, failing which the suspension becomes void.
The FBR further instructed all LTOs and RTOs to circulate updated blacklists, along with related invoices, to all concerned sections to ensure proper implementation. Inland Revenue officers must also take action against any registered persons claiming input tax or refunds based on blacklisted invoices by issuing show-cause notices and passing orders accordingly.
These guidelines reflect the FBR’s commitment to strengthening tax compliance and addressing fraudulent practices while ensuring transparency and consistency across its operations.
