The Large Taxpayer Unit (LTU) at Lahore has detected short/non-payment of sales tax by several sugar mills of Punjab, causing huge loss to the national kitty. Sources told Business Recorder here on Tuesday that the audit teams of the tax department have framed Audit Observations against certain sugar mills falling in the jurisdiction of Lahore LTU.
In some cases, sugar mills have violated certain provisions of Sales Tax Act, 1990. It is learnt that Lahore LTU has framed audit observations against many units having registered offices in Lahore. Resultantly, the department has raised sales tax liability against sugar mills. Based on the audit observations, the tax department is legally empowered to issue recovery notices to mills involved in short-payment or non-payment of sales tax during a specific tax period.
According to the Audit Observations of the tax department, under section 3(1) read with section 6 and 11 of the Sales Tax Act 1990, there shall be charged levied and paid sales tax at the rate leviable from time to time of the value of taxable supplies made by a registered person in the course or furtherance of any taxable activity carried on by him.
The scrutiny of available sales tax record ie soft copy of sale tax returns/profiles of sugar mills, under the jurisdiction of LTU, Lahore transpired that registered person is a manufacturer of sugar. The examination of monthly sale tax returns showed that registered person has non/short paid the sale tax. The lapse resulted in non-payment of sale tax.
The audit officers added that the tax department should direct the sugar mills to justify the matter or amount pointed out to be recovered from registered units along with penalty and default surcharge leviable under section 33 and section 34 of the Sales Tax Act, 1990, under intimation to audit department.
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