The issue of the blacklisted and suspected units has been taken up by the All Pakistan Textile Mills Association (Aptma) in its proposals for 2004-05 Federal budget.
It has suggested that a specific timeframe of not more than one month, in any case, may be laid down within which the collector of customs was required to complete his inquiry, and in case of clean audit report, the registered/enrolled person's name may also be removed from the suspected/suspended units' list forthwith.
"It is true," Aptma says, "the issuance of fake/flying invoices is a big threat to the smooth functioning of the sales tax system.
"However, it has been seen that in the effort to curb the menace of fake/flying invoices, the department has been blacklisting/suspending the registration of the bona-fide taxpayers without giving them any opportunity to clarify their position," said the Aptma.
"Furthermore, once a person is blacklisted, it takes him ages to get the inquiry against him completed. Even after the clean audit report, the sales tax authorities do not remove the name of the registered person from the list of suspected/suspended persons' list immediately," it said.
The Aptma said: "Under section 21(4) of the Sales Tax Act 1990, a registered/enrolled person may be blacklisted or his registration/enrolment suspended, pending further inquiry where the collector is satisfied that he has issued fake invoices, evaded tax or committed tax fraud."
"The order of the suspension/blacklisting will be in writing and copy of the same is requited to be sent to the registered or enrolled person, and the show-cause notice for the recovery of evaded amount of the tax and de-registration/de-enrollment shall be issued within 90 days of completion of the inquiry," it said.
The Central Board of Revenue (CBR), the Aptma said, had also issued a Sales Tax General Order (STGO) No.6/2003 to ensure that the sales tax collectorates follow a uniform policy for blacklisting and suspension of the sales tax registration/enrollment of the suspected persons.
Referring to the new proposed Sales Tax Refund Rules, 2004, Aptma said that the draft of these rules, as was circulated by the CBR in February, had been reviewed.
It offered the following areas for improvement:
-- The excessive documentation requirement should be minimised.
-- Payment records, including banking instruments, should not be required for audit purposes with relation to the refund claims. This requirement would result in unavoidable delays in sanctioning of the refunds to the exporters.
-- No timeframe for sanctioning of refunds is given in the rules for either of the Green, Yellow and Red channel claimant.
Highlighting the irritants of the Duty and Tax Remission Rules for Exports (DTRE) Rules 2001, the Aptma suggested removal of the following for turning the scheme into an adaptable option for the exporters.
-- Rule 297(5)(ii) allows a DTRE exporter to procure imported input goods free of duties and taxes from another DTRE approved person on approval from the collector of customs. Similarly, finished odds/yarn should also be allowed to transfer to a DTRE holder as it is to be ultimately exported in the form of fabric, knitted cloth, towels etc, thereby making contribution in earning the precious foreign exchange for the country.
-- Under the DTRE rule 298, no surcharge is payable on the utilised inputs of less than 10 percent, if such inputs are sold in the local market by the manufacturer. Option may also be extended on the unutilised inputs of less than 10 percent, if carried forward by the manufacturer, for consumption of these inputs in the next period instead of selling them in the local market.
-- For attracting value-added sector to avail of the DTRE scheme, two years' special permission be granted to the DTRE-holder to transfer finished goods/yarn to direct exporter without payment of the sales tax and duties under the Standard Purchase Orders (SPO) for the export.
The State Bank of Pakistan (SBP) recognises the SPOs for the export refinance and income tax department also recognises the concept of the SPO under section 154 (3B) of the Income Tax Ordinance, 2001. Supplies made under SPO scheme can be verified on the production of an audited bill of export/shipping bill.
-- Renewal of extension of the DTRE approval may be allowed for procurement of goods also, as is allowed in utilisation period to facilitate the exporters to meet the requirements of the foreign buyers.
-- Rule 302 allows adjustment of the sales tax on electricity bills on proportionate basis. The word "proportionate" should be deleted so that the DTRE-holder can avail of 100 percent adjustment of the sales tax paid on electricity/utilities.
-- Procedure is required to be laid down with respect to the input goods procured prior to obtaining the DTRE approval in case these goods are to be utilised and exported in any DTRE consignment.
Comments
Comments are closed.