FBR and collectorates: lack of coordination worries taxpayers

A large number of regular taxpayers has received notices regarding e-enrolment and non-filing of tax returns, due to lack of coordination between the Federal Board of Revenue (FBR) and regional collectorates.
The local collectorate has alleged many regular taxpayers that they neither got themselves enrolled nor filed sales tax returns in the current financial year, and termed it as a violation of Section 26 read with Sales Tax Rules 2007 of the Sales Tax Act, 1990, which attracts penalties under Section 33 of the Act.
The collectorate also directed taxpayers to deposit the due amount of sales tax, if any, besides extending cooperation to visiting teams assigned to resolve these issues.
Sources, however, said local collectorates were violating the instructions circulated by the board to restrain its officials from visiting premises of taxpayers. They said the exercise was not only aimed at determining non-filers of sales tax returns for current fiscal year but it was also providing lucrative opportunity to mal-practitioners.
They said the notices issued to taxpayers were subjected to multiple sales tax registrations, which were cancelled by the board under the Rule 10 of the Sales Tax Rules, 2006.
The sources said lack of coordination between the FBR and the regional collectorates had led the issue in limelight and added that since the annulment of multiple registrations, taxpayers were allowed to file consolidated returns.
They said the taxpayers were regularly filing their consolidated monthly returns but the local collectorate had issued notices related to their cancelled sales tax registrations, owing to lack of coordination.
According to the Rule 10, if a person holding multiple sales tax registrations, he shall retain only one registration and surrender all other registrations under intimation to CRO.
Alternatively, such registered persons shall file only one return for the tax period July 2008 and on wards, against the registration number they wish to retain and all other registration numbers shall be cancelled by CRO.
The tax liabilities against the registrations cancelled in the aforesaid manner shall be transferred against the registration retained and in case of such registrations being in different collectorates, the collector having jurisdiction over cancelled registrations shall ensure that tax arrears' files are transferred to the collectorate having jurisdiction over the registration so retained.
Meanwhile, Muhammad Idress, president of Karachi Electronics Dealers Association said in a statement that the notices regarding income tax and sales tax were hampering business activities. He said these notices were not only creating problems for business community but also destabilising the country's economy. He urged the Prime Minister to take prompt measures to eradicate these practices on priority basis.