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FBR detects irregular claim of reduced rate of ST by black listed companies

FBR detects irregular claim of reduced rate of ST by black listed companies

ISLAMABAD: Federal Board of Revenue (FBR) has detected Rs1,013.465 million irregular claim of reduced rate of sales tax by three black registered companies. FBR has directed the Regional Tax Office-III Karachi to take stern action against the officials at fault and proceed for recovery of government revenue.

According to condition (xiii) of SRO 1125 (1) 2011 dated 31st December 2011, the benefit shall be available to such registered persons who appear on Active Taxpayer List (ATL) on the website of Federal Board of Revenue.

Three taxpayers named M/s Yasrab International with national tax number (0567479-4), M/s M. Corporation with national tax number (3225942-5) and M/s Zam Zam Industries with national tax number (2195873-4), registered with Regional Tax Office III Karachi were declared black-listed as these companies are not appearing on Active Tax Payer List of Federal Board of Revenue, but they charged zero and two percent of sales tax amounting to Rs22.139 million on taxable supply of Rs6,276.47 million.

The actual amount of recovery was Rs1,035.606 million instead of Rs22.139 million. No action was taken by Regional Tax Office for recovery despite the lapse of 2-5 years.

Federal Board of Revenue was of the view that loss of Rs1,013.465 million was incurred to government revenue. Federal Board of Revenue has directed the field formation (RTO III Karachi) to finalize legal proceedings and submit updated status of the cases.

It is important to mention here that M/S Zam Zam industries paid Rs 17.446 million sales tax on value of supply worth Rs 2,241.278 million, but the payable sales tax amount was Rs364.595 million. The company short-paid sales tax by Rs 347.148 million.