The Senior Vice President, Karachi Chamber of Commerce and Industry (KCCI), Jawed Bilwani has urged the Member (Audit), Federal Board of Revenue (FBR), Abrar Ahmed Khan to withdraw Audit by the Sales Tax Audit Department (STAD) and the Directorate of Revenue Receipt Audit (DRRA).
In a letter to the member, he drew attention to a major irritant and hurdle to five zero rated export sectors is the unnecessary and most redundant Audit of ST carried out by the STAD and DRRA about which, large number of KCCI members have been complaining to us.
These five export sectors, which have been zero rated, are being harassed unnecessarily by the STAD and DRRA for the Audit of 1percent, which is after all refundable. Moreover, it is obvious that the amount of money spent on the above Audit Departments, carrying out these Audits, exceeds the revenue generated from this futile exercise.
This is a loss of precious time and money on the part of the Government and consequently exporters, who are already burdened with multifarious issues and problems, face harassment, loss of precious time and money. The exporters are battling for their survival on the Global Market due to the severest ever competition from the neighbouring and other competing countries, who are provided with a very well prepared and level playing field by their Governments.
Similarly, commercial importers, who are under special procedure, need to pay Value Addition Tax of 2percent in advance at the time of clearance of goods and are immune from Audit under Section 7-A of the ST Act, 1990. Therefore, Audit for them is also a futile exercise and not required at all. Previously, when such ST Audit had ended, revenue generation had increased greatly, which was indeed, beneficial to the FBR and the nation.
During the tenure of the previous FBR Chairman, owing to creation and introduction of business friendly policies, the environment had greatly improved and much revenue was generated. Even during initial two months of the current year, record revenue was collected by the FBR, as in the first month it was Rs 20 billion more than the target.
Bilwani pointed out that not only the economy of our country is in great crisis with the dwindling foreign exchange reserves, the exporters, businessmen and the industry itself is also plagued with insurmountable problems like rising dollar-rupee parity resulting into high cost of inputs, frequent load shedding, negative travel advisory by importing countries, difficult international market situation due to financial debacles in the US and European Union. As a result, they are greatly over burdened and this restoration of all kinds of ST Audit will prove to be another nail in the coffins.
It is always pragmatic that when a policy gives good results and proves most beneficial such as the previous decision to end all kinds of Audit by STAD and DRRA, such a policy is still continued due to its benefits, he said.
As the previous policy resulted in much revenue generation, it is really surprising and not at all understood why the previous policy has been reversed and the FBR has again started Audits by the STAD and DRRA just for the sake of 1 percent, which is in any case refundable.
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