ISLAMABAD (April 14 2003) : To control the phenomenon of fake/flying invoices, the buyer of the fake invoices would be held responsible for committing tax fraud.
As per the decision of CBR conveyed to Business Recorder here on Sunday, the newly established Starr automation refund system has collected enough data which would be instrumental in conducting audit to hunt persons involved in the business of fake invoices.
The CBR would conduct countrywide desk audit of wholesalers and distributors to check whether the genuine registered wholesalers and distributors have issued sales tax invoices for claiming sales tax refund.
Audit would also be conducted to verify that registered companies have properly followed the provisions of section 73 of the Sales Tax Act, 1990.
Sources expressed confidence that desk audit would effectively control the phenomenon of flying invoices in future.
Whoever claims refund on the receipt of another person would be held responsible for buying on flying invoices. In case of detection, the buyer would be prosecuted for committing tax fraud, under the law.
It would be the responsibility of the refund claimant that the invoice presented by him is purchased from genuine registered person.
In case a person is found to be involved in claiming fake refund, the buyer of fake invoices would be held responsible.
Sources said that the CBR has already given concession to the spinning sector to itself control the phenomena of flying invoices till April 30, 2003. The CBR will see at the right time whether the spinners have themselves properly adhered to the commitment made with the tax authorities to control the menace of flying invoices.