ISLAMABAD: Federal Board of Revenue (FBR) ordered to 16 field formation including Karachi, Peshawar and Faisalabad to expedite efforts for recovery of Rs1120.98 million under the head of sales tax from 905 tax payers acting as withholding agents.
Sources told Customs Today that Federal Board of Revenue received credible information that dozens of registered companies and non-registered persons are not paying sales tax on prescribed rates with the help of withholding agents.
According to Rule, 2 (2) and 2 (3) (i) of the sales tax special procedure (withholding tax) rule, 2007 a withholding agent was required to deduct an amount equal to one fifth of the total sales tax shown in the sales tax invoice issued by a registered person and on purchase of taxable goods from non-registered person, was required to deduct sales tax at the applicable rate of the value of taxable supplies made to him from the payment due to the supplier.
Sources said that 905 tax payers acting as withholding agents registered with sixteen (16) field offices of FBR made taxable purchases from registered and non registered persons but did not deduct the sales tax at the prescribed rates while making payment to the suppliers.
No legal action was taken by the field formations. This resulted loss of Rs1120.98 million to national exchequer. FBR has also directed to field formations to expedite adjudication and legal proceedings and furnish the report in non responded cases.
