Attachment of bank accounts of taxpayers: FBR orders sales tax/FED recovery only after approval by field committees

ISLAMABAD: The Federal Board of Revenue (FBR) has directed Inland Revenue (IR) field formations to recover sales tax/federal excise duty through attachment of bank accounts of taxpayers only after prior approval of the field committees.

In this regard, the FBR has issued new instructions to all the Chief Commissioners of IR on the sales tax recovery.

According to the FBR, in case, there is no restraining order by any court or law, or there is no stay order by the Commissioner IR (Appeals) or the Tribunal, the recovery of tax through bank attachment under section 48 of the Sales Tax Act, 1990 read with rule 71(2) (b) of the Sales Tax Rules, 2006 or rule 60 (1) (b) of the Federal Excise Rules, 2005 shall only be undertaken with the prior approval of the committee to be constituted at formation level. The committee shall comprise two senior Commissioners and be headed by the Chief Commissioner Inland Revenue.

Bank account attachments: FBR imposes curbs on tax recovery

The following FBR’s instructions shall be implemented by field formations for recovery of sale tax and federal excise duty and proposing reference applications or civil petitions for leave to appeal:-

(a) In respect of the officers of Inland Revenue, the Zonal Commissioners shall ensure that the jurisdiction in respect of a taxpayer is exercised by the concerned officer, all notices issued are properly served in the manner as provided in the Sales Tax Act, 1990 or the Federal Excise Act, 2005.

The Zonal Commissioners shall also ensure that the orders under any provisions of the said Acts are passed after providing sufficient opportunity of being heard to the taxpayer, and recovery measures under the provisions of sections 48 of the Sales Tax Act, 1990 or rule 60 (1) (b) of the Federal Excise Rules, 2005 shall be undertaken only after the time provided under rule 71(1) of the Sales Tax Rules, 2006 read with rule 60 of the Federal Excise Rules, 2005 has expired. No further proceedings for recovery of tax shall be taken when an order restraining the recovery of tax by any court of law is received. In case, the restraining order is received after initiation of recovery measures under any provisions of the said Ordinance, but before actual recovery of the tax amount, no further action shall be taken for recovery of tax, FBR said.

Similarly, no further proceedings for recovery of tax shall be taken when a stay order by the Appellate Tribunal Inland Revenue (Tribunal) or the Commissioner Inland Revenue (Appeals) is received. In case, the stay order from the Tribunal or the Commissioner IR (Appeals) is received after initiation of recovery measures under any provisions of the said Ordinance, but before actual recovery of the tax amount, no further action shall be taken for recovery of tax.

While proposing filing reference applications and civil petitions for leave to appeal before the higher courts, the Zonal Commissioners are expected to exercise good judgment while filing reference application or civil petition for leave to appeal in cases where a question of law is involved, FBR added.

Copyright Business Recorder, 2024