CBR proposes amendment in Sales Tax Act, 1990

ISLAMABAD (June 11 2004): The Central Board of Revenue (CBR) has proposed amendment in the Sales Tax Act, 1990 to introduce new measures in the budget for controlling the menace of flying/fake invoices, sources told Business Recorder here on Thursday.

The tax authorities will make comprehensives changes in the procedure to deal with the suspected units allegedly involved in the business of flying/fake invoices or committed other serious violations under the Sales Tax Act, 1990.

The CBR is likely to introduce a new section in the Sales Tax Act to enhance the powers of collectors of sales tax to deal with the units blacklisted on the allegations of using fake/flying invoices.

At present, collectors are empowered to blacklist any registered/enrolled unit allegedly involved in tax evasion/fraud, issuance of fake invoices, non-filers of sales tax returns for the last six or more months and not available at the given business address.

The new law would combat use of sales tax invoices issued by the blacklisted units/companies.

The CBR had already decided that the buyer of fake invoices would be held responsible for commercial tax fraud.

The sources said that the newly established STARR automation refund system has collected enough data, which would be instrumental in conducting audit to hunt people involved in the business of fake invoices.

The existing procedure of blacklisting units included non-availability of registered person at the given address, refusal to allow access to business premises or to furnish record to an authorised sales tax officer, abnormal tax profile such as taking abnormal input tax adjustment, continuos carry-forward or sudden increase in turnover, making substantial purchases from or supplies to other blacklisted/suspended people and non-filers of sales tax returns for six or more months.

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