ISLAMABAD (July 23 2003) : Responding to apprehensions of business community, the Central Board of Revenue (CBR) has referred section-40B of Sales Tax Act for expert opinion of the anomaly committee in the light of suggestions made by private sector.
<br> Over 400 sizing units are protesting against the introduction of section 40B, whereby tax officials are empowered to monitor production/sale of taxable goods/stocks to check tax evasion.
Sources said here on Tuesday that the anomaly committee, if required, would recommend amendment in section 40B after going through the proposals floated by all stakeholders. Any amendment in this section would require approval by parliament.
As far as sizing units of Faisalabad are concerned, the CBR is ready to negotiate with this sector on three demands floated by them.
Commenting on the status of this section, sources pointed out that there is misunderstanding among the business concerns pertaining to section 40B.
First, CBR cannot depute any officer at the suspected unit for an indefinite period.
The monitoring of production, sale of taxable goods and the stock position would be on temporary basis.
Secondly, the authorities would consult trade bodies/associations before deputing sales tax officer at any suspected unit.
The association/trade body would ask the unit to correct its records, and pay evaded amount of sales tax forthwith.
In case the unit ignores the warning of the association and continues the practice of tax evasion, CBR would temporarily depute sales tax officer at the unit–as a last option, said sources.
They said that business community, particularly industrial units, should not be afraid of Section 40B as the CBR would try its level best to use these powers in minimum number of cases.
Following is the text of the amendment introduced in Sales Tax Act:
“40B-Posting of Sales Tax Officer: Subject to such conditions and restrictions, as deemed fit to impose, the Central Board of Revenue, may post Officer of Sales Tax to the premises of registered person or class of such persons to monitor production, sale of taxable goods and the stock position:
“Provided that if a Collector, on the basis of material evidence, has reason to believe that a registered person is involved in evasion of sales tax or tax fraud, he may, by recording the reason in writing, post an Officer of Sales Tax to the premises of such registered person to monitor production or sale of taxable goods and the stocks position”.