ISLAMABAD: The Federal Board of Revenue (FBR) has detected a tax evasion case Rs 1,306.82 million allegedly by M/s Habib Construction Services (Private) Limited (NTN 3237053).
According to details, the company allegedly committed the fraud by avoiding the deduction of withholding tax on contractual receipts. The FBR has issued a formal notice to the taxpayer for the recovery of the said amount.
According to section 153 (1) (c) of the Income Tax ordinance 2001, every prescribed person making a payment in full or part including a payment by way of advance to a resident person or permanent establishment in Pakistan of a non-resident person on the execution of a contract other than a contract for the sale of goods or the rendering of services shall at the time of making the payment deduct tax from the gross amount payable at rate specified in Division III of the First Schedule. M/s Habib Construction Services (Private) Limited filed the income tax returns for the tax years 2009 to 2014.
During audit process it has observed that as per Federal Board of Revenue e-portal , tax deducted from M/s Habib Construction Services by the withholding agents concerned was much less than the tax deduction declared by it in its tax returns for the tax years 2009 to 2011.
It indicated that either the tax was not deducted under section 153 (1) (c) or was not deposited in the government treasury at all. This resulted in revenue loss of Rs1,306.82 million. FBR has directed to the concerned CRTO that immediate action as per law should be taken and recovery be made from the contractor along with penalties and default surcharge. FBR also recommended that a facts finding inquiry be conducted into the matter to fix the responsibility.
