Revenue collection: PRA asks FBR to stop officials from unlawful interference

Punjab Revenue Authority (PRA) has drawn the attention of the Federal Board of Revenue (FBR) towards that the unlawful interference in the revenue collection working of the PRA by the officers of Inland Revenue by intimidating to the owners of different restaurants in Punjab, creating serious trouble for provincial tax body, which had started collection of taxes from restaurants.
The PRA Chief Iftikhar Qutab has made a request to the FBR Chairman Ali Arshad Hakeem to take notice of the situation and stop the FBR officials from unlawful activities. According to an official letter no PRA/Restaurants 46/12, written by the PRA Chief to the FBR Chief dated November 14, 2012 mention that the interference of the Large Taxpayers Units (RTUs) and Regional Taxpayers Units (RTUs) staff create hindrance by creating anomaly among the taxpayers asking them continue paying Federal Sales Tax to the FBR.
The Punjab government has levied and started collection of Punjab Sales Tax on the services provided by the restaurants in the province from October 6. The PRA had also requested the FBR trough its official communication to discontinue the receipt and collection of sales tax on services provided by the restaurants in Punjab.
However, the PRA has observed that the officers and staff of Inland Revenue are still compelling the owners of different restaurants in Punjab to continue paying Federal Sales Tax to the FBR treating the restaurant service as supply of food and restaurants are registered manufacturers under Sales Tax Act 1990.
However, factually, the issue of treating restaurants as service providers was settled and there is no room for any further deliberation on the question of restaurants as service provider was left. On the other side, the intervention of the officers or staff of Inland Revenue department culminating in unlawful receipt of sales tax in Federal government's account is not only unwarrantable but also amount to dishonouring the constitutional right of the province of Punjab.
The PRA Chief Iftikhar Qutab asked the FBR Chief Ali Arshad Hakeem to immediately issue necessary instructions to the LTUs/RTOs concerned not to interfere with the enforcement and collection of Punjab Sales Tax on service provided by the restaurants in the province of Punjab. The PRA chief expressing trust in the FBR hoped that the FBR will realise the sensitivity of the issue and take immediate appropriate corrective measures as early as possible to maintain harmony among the provincial and federal revenue collection department.