AGL 40.02 Decreased By ▼ -0.01 (-0.02%)
AIRLINK 127.99 Increased By ▲ 0.29 (0.23%)
BOP 6.66 Increased By ▲ 0.05 (0.76%)
CNERGY 4.44 Decreased By ▼ -0.16 (-3.48%)
DCL 8.75 Decreased By ▼ -0.04 (-0.46%)
DFML 41.24 Decreased By ▼ -0.34 (-0.82%)
DGKC 86.18 Increased By ▲ 0.39 (0.45%)
FCCL 32.40 Decreased By ▼ -0.09 (-0.28%)
FFBL 64.89 Increased By ▲ 0.86 (1.34%)
FFL 11.61 Increased By ▲ 1.06 (10.05%)
HUBC 112.51 Increased By ▲ 1.74 (1.57%)
HUMNL 14.75 Decreased By ▼ -0.32 (-2.12%)
KEL 5.08 Increased By ▲ 0.20 (4.1%)
KOSM 7.38 Decreased By ▼ -0.07 (-0.94%)
MLCF 40.44 Decreased By ▼ -0.08 (-0.2%)
NBP 61.00 Decreased By ▼ -0.05 (-0.08%)
OGDC 193.60 Decreased By ▼ -1.27 (-0.65%)
PAEL 26.88 Decreased By ▼ -0.63 (-2.29%)
PIBTL 7.31 Decreased By ▼ -0.50 (-6.4%)
PPL 152.25 Decreased By ▼ -0.28 (-0.18%)
PRL 26.20 Decreased By ▼ -0.38 (-1.43%)
PTC 16.11 Decreased By ▼ -0.15 (-0.92%)
SEARL 85.50 Increased By ▲ 1.36 (1.62%)
TELE 7.70 Decreased By ▼ -0.26 (-3.27%)
TOMCL 36.95 Increased By ▲ 0.35 (0.96%)
TPLP 8.77 Increased By ▲ 0.11 (1.27%)
TREET 16.80 Decreased By ▼ -0.86 (-4.87%)
TRG 62.20 Increased By ▲ 3.58 (6.11%)
UNITY 28.07 Increased By ▲ 1.21 (4.5%)
WTL 1.32 Decreased By ▼ -0.06 (-4.35%)
BR100 10,081 Increased By 80.6 (0.81%)
BR30 31,142 Increased By 139.8 (0.45%)
KSE100 94,764 Increased By 571.8 (0.61%)
KSE30 29,410 Increased By 209 (0.72%)

The Federal Board of Revenue (FBR) has decided to issue 'Red Alerts' during the Pre-Refund Analysis (PRA) of refund claims in cases where information has been received about suspected claims under new tax policy to combat menace of bogus/dubious refund claims.
Sources told Business Recorder here on Wednesday that the Directorate General of Intelligence and Investigation Inland Revenue has issued policy guidelines to the Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) about the 'Red Alerts' to be issued for immediate system analysis and tax profiles verifications before issuance of the sales tax refund claims. The cases falling within the category of 'Red Alerts' would be subjected to computerised analysis using the refund software of the FBR to check the authenticity of the data electronically maintained by the department. The purpose of the 'Red Alerts' is to check the claims internally by the department without stopping the routine procedure for processing of refund claims. The concept of 'Red Alerts' would make the tax officials vigilant to check cases where refund claims are under process but some information has been received which makes such claims doubtful.
According to FBR's instructions to the field formations, 'Red Alerts' constitute an advisory instrument and shall be confined only to statement of facts and brief reasons which necessitated the generation of the said alerts. Under no circumstances, these alerts should be used to hamper the normal refund processing.
The LTUs and RTOs would strictly conduct pre-refund analysis based on the following parameters. The PRA shall be initiated on the basis of some information received through some formal complaint or informal channels, passed on to the officers (not below the rank of Additional Director) of the Directorate General of Intelligence and Investigation Inland Revenue or its Regional Directorates, the FBR stated.
For initiation of any action under PRA explicit approval of Regional Director of the directorate is mandatory. No contact whatsoever shall be made with the taxpayers or refund processing tax offices/officers/officials, FBR said. The FBR has further cautioned the tax officials that the PRA shall be restricted to system analysis, to be conducted through live access to the operating software. The 'Red Alerts' shall be generated on the basis of information received vis-à-vis case facts and the additional information gathered by the vigilance cells. These self-contained Alerts shall be transmitted directly to the concerned Chief Commissioners/Commissioners and Centralised Sales Tax Refund Office (CSTRO) and Director HQs I&I-IR.
The Directorate General I&I-IR has further directed the LTUs/RTOs that the agency has been entrusted with another extraordinary task of checking bogus/dubious Income Tax/Sales Tax Refunds. Apart from the magnitude of the problem in question, its sensitive nature further adds to complexity of the given task. Any such assignment not only poses a challenge, but it also exposes the designated agency to an enormous risk of corruption as well. In order to enable FBR's field offices for combating the menace of bogus/dubious refunds in a fair and transparent way, a detailed standing operating procedure (SOP) has been evolved for across the board application.
Under the directorate guidelines, the FBR has created Vigilance Cells in all major cities. Initially one Vigilance Cell each shall be created through order by Director concerned at Karachi, Lahore, Faisalabad and Islamabad. The said cell can be a 2/3 member squad, depending upon the availability of required officials. Two member cell would include one Auditor/senior Auditor and one income tax inspector (ITI), whereas three member cell to include two Auditors/Senior Auditors and one ITI. For outstations, exercise specific mobile Vigilance Cells can be created on as and when required basis. The number of vigilance cells can be enhanced by bringing sound justifications on record and under intimation to Directorate General I&I-IR HQ.
About the functioning of the Vigilance Cells, the directorate I&I IR said that the Vigilance Cell shall be headed by the senior most among the members of the cell. The regional Vigilance Cell(s) shall report to the Additional Director designated by the Director concerned. Each vigilance cell shall have complete access to the software controlling/managing Income Tax/Sales Tax refunds. Each cell shall be responsible for Pre-Refund Analysis (PRA) and Post-Refund Monitoring (PRM).
The FBR has also issued Post-Refund Monitoring system, to be followed by the field formations under the policy to check the fraudulent refunds claims. According to the guidelines, all refund cases (Income Tax/Sales Tax) wherein amount exceeds Rs 500,000 (five hundred thousand) shall be monitored by Vigilance Cells. PRM shall be based on certain parameters. As per parameters of the Post-Refund Monitoring system, on weekly basis refund information shall be collected from concerned Commissioners on the specified format.
Depending upon the quantum of cases each vigilance unit shall take up minimum 10 cases (8 non-company cases and 2 corporate cases each month on the basis of revenue involved), wherein detailed post-refund monitoring check shall be applied ie genuineness of deduction/payment of Tax (the amount which constitutes the basis of refund claim) in Government treasury, compliance of statutory and procedural obligations, general background of the issuance of refund, names and designation of all officers/officials who processed the said refunds and bank A/C trail where refund has finally landed.
The Directorate I&I IR has further directed the LTUs/RTOs that the government treasuries dealing with clearance of Income Tax/Sales Tax Refund cheques are mostly functioning at FBR's data processing units (DPCs). The refund cheques cleared finally land in the said treasuries. The copies of all such cheques need to be obtained, for feeding in FBR's databank. No contact with the taxpayers shall be made by Vigilance cells during Post-Refund Monitoring exercise.
The FBR has further directed the field formations that all details and documents required for PRM may be requisitioned in writing and any incident of non-co-operation may be brought into the knowledge of concerned supervisory officers and Directorate General I&I-IR HQ. The Post-Refund Monitoring check reports shall be generated by the designated Additional Director and countersigned by the concerned Director I&I-IR.
All Post-Refund Monitoring check reports be forwarded to Directorate General I&I-IR HQs for further necessary action. The Vigilance Unit Directorate General I&I-IR HQ Islamabad shall collate, co-ordinate the overall position emerging from the whole exercise and report the corrective measures to the concerned authorities of the Centralised Refund Monitoring, the FBR said.

Copyright Business Recorder, 2011

Comments

Comments are closed.