Clarification

Apropos to a news item appeared Daily "Business Recorder" captioned "Tax liabilities: PTA's accounts frozen; Rs two billion recover" on June 6, 2013. It is clarified that FBR has made the forceful recovery of Rs 2.03 billion without any established right to receive the said amount while the case was being heard by its very own Appellate Tribunal of Inland Revenue (ATIR).
All the funds of Pakistan Telecommunication Authority (PTA) remain in National Bank, and knowing this fact, and understanding that PTA can not act swiftly to stop any high handedness or forceful recovery, the FBR officials had not left any avenue to recover funds from the Bank accounts of PTA. In this connection, they had charged tax on the basis of information and explanatory notes of the PTA's Financial Statements, regardless of the fact that those amounts were only for information and had not been arrived in the bank accounts of PTA. It was explained that due to litigation by certain WLL operators for the moratorium on the said payment, which was granted later while staggering of the remaining amount in 10 equal instalments which was denied by Authority but being pressed at all levels by the operators. However the amount was not received from WLL operators hence no tax was justified to be paid on the amount yet to be received.
PTA would like to clarify further that, particularly at this instance LTU of FBR has created an arbitrary demand from the explanatory notes of the PTA's Financial Statements; where in the balance of ISF was discussed in the year 2011. Upon explanation of the PTA's position the officials transferred it as an income of year 2006 and created demand for the year 2006, the same was therefore contested at the available forums within FBR, and the case is under discussion at Appellate ATIR.
Earlier considering the facts of the case the ATIR had granted stay from recovery for 2 times, this time seeing the near expiration of Stay, PTA had applied for a stay and the hearing was fixed on June 5th, 2013, and the LTU officers were also called to attend. However the Judges of ATIR were not been able to hold the court and FBR knowing the fact that stay is not operative took the chance and recovered the amount from PTA account without informing PTA and showed it as a big successful recovery against PTA which is a blatant violation of all set norms. This recovery is without taking into account the fact that there is already an available overpayment by PTA from the previous year's calculations duly elaborated and explained to FBR and amounting to Rs 400/- million.
It is further clarified that, PTA was exempt from heavy deduction and payments of tax. As the surplus of all PTA's receipts already goes to Federal Consolidated Fund, which are divisible pool and all collection of FBR also goes to the divisible pool. Since the day PTA was made a taxable entity, PTA had always endeavoured to pay and clear the obligation within due time and as per rules. The officials of FBR, however it seems, had considered this government functionary as an entity for the completion of their tax targets.
It may be added that any such recoveries from govt entities do not increase even a penny to the overall exchequer, due to the fact that in case of non-recovery this amount is bound for the Federal Consolidated Fund (FCF) where all the collections of FBR are deposited. Taking this route of deposit through FBR does not increases FCF, but may be decrease that due to compulsory deduction by FBR from all the funds collected by it.
It may be noted that, FBR and LTU officers also charged tax on the amounts become receivable for FCF from Public Account (Which is not a divisible Pool) due to Initial License Fees (ILF), on which receipts tax was already calculated and paid. And the earlier forcefully recovered tax on balance of receivable to Public Account shown for information purpose in PTA's balance sheet, which is otherwise contested at various forums within FBR.
It may be further clarified that, PTA and all its members, officials and staff had always been abiding all the laws and regulations applicable to them and in this respect, timely and accurate payment of taxes had always been a priority, and in this way we deposit the quarterly advance tax, and all the taxes deducted from all the payments made by PTA to other parties including the staff salaries.-PR