FBR to impose embargo on chronic sales tax defaulters

Collectors will be required to take action under section 48 of the Sales Tax Act, 1990: The Federal Board of Revenue (FBR) has decided to impose an embargo including stoppage of clearance from factories on taxpayers from whom recovery of Sales Tax arrears is impossible.
Sources told Business Recorder on Sunday that the FBR has directed the collectors of sales tax to obtain necessary permission from the Sales Tax Wing before imposing embargo on registered companies.
According to the instructions, recovery of arrears may be made in accordance with law in a most transparent manner and no discriminatory treatment be accorded to any taxpayer.
The collectors should refer such cases to the Board for imposition of embargo with solid proof calling for extreme action, the directive added. Sources said that the collectors would take action against the taxpayers under section 48 of the Sales Tax Act, 1990. The legal proceedings would cover cases where the collectors had issued show cause notices and given complete opportunity to the taxpayers for recovery of arrears. On completion of all formalities, the adjudication authority issues order-in-original (OIO) for recovery of sales tax. In cases where the taxpayer failed to deposit the adjudicated amount, it becomes arrear for which embargo is imposed for recovery.
However, it is necessary that the collector must have applied all clause specified in the section 48 of the Sales Tax Act for recovery of unpaid amount of sales tax.
SOURCES SAID THAT THE COLLECTOR HAS THE OPTION TO ADOPT ANY OF THE FOLLOWING EXTREME ACTIONS FOR RECOVERY OF ARREARS:
First, the department can deduct the amount from any money owing to person from whom such amount is recoverable and which may be at the disposal or in the control of tax officer.
Secondly, collector may require, by a notice in writing, any person who holds or may subsequently hold any money for or on account of the person from whom tax may be recoverable to pay to such officer the amount specified in the notice.
Through embargo, the collector is legally empowered to stop removal of any goods from the business premises of unit till such time the amount of tax is paid or fully recovered.
The collector can also direct the unit to stop clearance of imported goods or manufactured goods or attach bank accounts; seal the business premises or attach and sell or sell without attachment any movable or immovable property of the registered person from whom tax is due.
The department is also authorised to recover arrears by attachment and sale of any movable or immovable property of the guarantor, person, company, bank or financial institution where a guarantor or any other person, company, bank or financial institution fails to make payment under such guarantee, bond or instrument.