The government is likely to relax some conditions of the new law - Missing Traders Fraud - under which all partners in the supply chain would be jointly liable to deposit the unpaid amount of tax not paid at any stage of supply.
Official sources told Business Recorder on Sunday that the law was introduced in the budget, but has not been implemented so far. On the other hand, the Central Board of Revenue (CBR) has on principle agreed to issue a simplified Standard Operating Procedure (SOP) for implementing the law in consultation with the business community.
In this regard, some proposals are under consideration for making this law practicable and acceptable to trade chambers and federation.
Sources said that the concept of the Missing Traders Fraud had been made part of the Finance Act, 2006, but the SOP is yet to be chalked out keeping in view reservations of the taxpayers. All issues pertaining to the practical difficulties being faced by the taxpayers would be taken into account before issuing the procedure. In the 2006-07 budget, the Board had introduced several strict provisions in the Sales Tax Act, 1990 to reject fraudulent refund claims where the amount is not actually deposited by the supplier in the national exchequer.
Section 8 of the Sales Tax Act was amended through Finance Bill 2006 to disallow refund or 'input tax adjustment' in case the tax claimed is not deposited by the respective supplier.
Similarly, the Board had introduced a system for checking refunds claimed by persons whose suppliers have collected tax from them, but not deposited in the treasury.
Under the Missing Traders Fraud, both the buyer and the seller would be responsible for depositing the amount of due tax if not deposited. Prior to this amendment, the buyer was not held responsible even if his supplier had not deposited the tax recovered from him.
Comments
Comments are closed.