Directorate General Intelligence and Investigation Inland Revenue (IR) Federal Board of Revenue has started issuing ''red alerts'' during the Pre-Refund Analysis (PRA) of refund claims filed by registered persons of Karachi and other cities where information has been received about suspected claims to combat the menace of bogus/dubious sales tax refunds.
Sources told Business Recorder here on Saturday that the DG I&I IR has enforced a new measure to check bogus refund claims by issuing ''Red Alerts'' to the concerned Regional Tax Offices (RTOs) for immediate system analysis and tax profiles verification before issuance of the sales tax refund claims. The intelligence arm of the FBR has starting issuing ''Red Alerts'' in all such cases where suspected sales tax claims have been filed and information has been disseminated to the field formations for compliance.
The DG I&I IR has identified cases of ''red alerts'' on the basis of high-risk areas identified on the basis of monthly sales tax analysis and federal excise returns being filed by the registered persons. During analysis of the sales tax returns, the agency has picked high-risk areas which formed basis for issuing ''Red Alerts'' in case of filing of sales tax claims, sources said.
The agency would continue to disseminate information about the sales tax refund claims declared as ''red alerts'' for further action by the field formations.
The cases falling within the category of ''red alerts'' would be subjected to computerised analysis using the refund software of the FBR to check the authenticity of the data electronically maintained by the department. The purpose of the ''Red Alerts'' is to check the claims internally by the department without stopping the routine procedure for processing of refund claims.
The concept of ''red alerts'' would make the tax officials vigilant to check cases where refund claims are under process but some information has been received which makes such claims doubtful. ''red alerts'' constitute an advisory instrument and shall be confined only to statement of facts and brief reasons which necessitated the generation of the said alerts.
Sources said that under no circumstances, these alerts should be used to hamper the normal refund processing. The LTUs and RTOs would strictly conduct pre-refund analysis based on the following parameters. The PRA shall be initiated on the basis of some information received through some formal or informal channels, passed on to the officers (not below the rank of Additional Director) of the Directorate General of Intelligence and Investigation Inland Revenue or its Regional Directorates. For initiation of any action under PRA explicit approval of Regional Director is mandatory. No contact whatsoever shall be made with the taxpayers or refund processing tax offices/officers/officials, sources said.
The ''red alerts'' shall be generated on the basis of information received vis-à-vis case facts and the additional information gathered by the vigilance cells of regional tax offices. These self-contained Alerts shall be transmitted directly to the concerned Chief Commissioners/ Commissioners and Centralised Sales Tax Refund Office (CSTRO) and Director HQ I&I-IR.
All refund cases (Income Tax/Sales Tax) wherein amount exceeds Rs 500,000 (five hundred thousand) shall be monitored by Vigilance Cells, sources added. The Vigilance Unit, Directorate General I&I-IR HQ Islamabad shall collate, co-ordinate the overall position emerging from the whole exercise and report the corrective measures to the concerned authorities of the Centralised Refund Monitoring.
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