ISLAMABAD (March 20 2003) : The sales tax auditors of the Central Board of Revenue (CBR) have invented a new method of blackmailing the taxpayers demanding documents after completion of audit without giving any reason.
The auditors misuse powers of Section 25 of the Sales Tax Act, 1990 just to harass the business community to get monetary and other favours from the taxpayers.
The CBR has issued warning notices to all the collectors of sales tax to avoid demanding unnecessary documents after completion of audit, which gives a bad name to the concerned authorities.
The authorities have recently sanctioned post of “member audit” within the tax machinery, while it seems that the CBR has no monitoring system to effectively check sales tax auditors.
Under Section 25 of the Act, “A person who is required to maintain any record or documents under this Act 2 (or any other law) shall, as and when required by an officer of Sales Tax, produce record or documents which are in his possession or control or in the possession or control of his agent; and where such record or documents have been kept on electronic data, he shall allow access to such officer of Sales Tax and use of any machine on which such data is kept”.
As the CBR has not specified that sales tax officials were bound to give reason for demanding documents under the above-mentioned section, the sales tax auditors widely use this section as a tool to fleece business community.
The CBR has received a number of complaints that the collectorates of sales tax were intentionally demanding documents and photocopies after audit under Section 25 of the Sales Tax Act without assigning reason or purpose thereof.
Accordingly, a lot of inconvenience was being caused to the registered people.
Taking into account these complaints, the CBR has directed the collectors to ensure that the auditors must give solid reason in writing to the taxpayers, while demanding the documents.
The registered people may be asked to provide documents stating the reason for the documents, ie re-audit, investigation audit or any other reason.
The CBR has termed it a serious situation, which requires immediate attention of the collectors to avoid such incidents in future.