Customs told not to interfere in income tax matters

ISLAMABAD (July 05 2003) : To check the misuse of discretionary powers of custom officials, the Central Board of Revenue (CBR) has asked custom authorities not to intervene in matters falling within the domain of Income Tax Ordinance 2001 or the repealed Ordinance 1979.

The issue came to limelight when a collector of customs challenged the wrong issuance of exemption certificate by a Commissioner of Income Tax (CIT) during finalisation of adjudication proceedings.

The collector intentionally bypassed the concerned commissioner to verify genuineness of an exemption certificate and, on his own, issued an order blaming CIT for issuance of wrong certificate.

This was not only tantamount to violation of laid down law, but also a source of harassment to the importer.

Official sources told Business Recorder here on Friday that the adjudicating authorities were misusing the powers by interfering in matters beyond their legal jurisdiction.

Sub-section (1) of section 148 of the Income Tax Ordinance 2001 requires the collector of customs to collect advance tax from every importer of goods, unless a certificate of exemption is produced by the importer.

The Commissioner of Income Tax is empowered under section 159 of the Ordinance 2001 as well as SRO 593(I)91 to issue exemption certificate.

Once the certificate is issued by the commissioner, the collector is relieved of his obligation to collect tax under the said section.

Sources pointed out that if collector of customs has any doubt about the genuineness of exemption certificate, he should get it verified from the concerned commissioner of income tax.

However, it is outside the purview of the collector of customs to adjudicate as to whether an exemption certificate is permissible under the Income Tax Ordinance.

Keeping the legal aspects, all collectors of customs have been informed to desist from adjudicating any matter that falls within the domain of Income Tax Ordinance 2001 or repealed Ordinance 1979, instead, wrongly issued certificate should be referred to the concerned CIT, officials added.

It may be recalled that CBR has recently directed the Commissioners of Income Tax (CITs) not to insist on compilation of irrelevant documents causing delay in the issuance of exemption certificate to business community.

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