Proposal endorsed: ADRC decisions should be binding on FBR and taxpayers: TRC

In a major move to facilitate business community, the Federal Board of Revenue (FBR) has endorsed a proposal of the Tax Reform Commission (TRC) to make recommendations of the Alternate Dispute Resolution Mechanism (ADRC) binding on both the FBR and the taxpayers. Sources told Business Recorder here Thursday that the decision has been taken in the last meeting of the tax reform implementation committee held at FBR (HQ), Islamabad.
At present, the decision of the ADRC is not binding on the FBR. In case the proposal has been implemented the decisions of the ADRC would be bindings on the both the FBR and the applicant businessman. Abid Shaban Advocate Member TRC deliberated upon the scope of the implementation committee during the meeting. He shared his experiences regarding the existing status of organisation and expounded his future vision with the participants. On the subject of pending litigation and Alternate Dispute Resolution, Abid Shaban apprised the members about the existing status of the pending appeals at various Appellate fora. He emphasised the need for devising a mechanism for Advance Ruling and suggested that it should be an autonomous body not falling under the administrative control of Federal Board of Revenue. Special Assistant to the Prime Minister observed that such rulings should be binding both on the taxpayers as well as on the department. FBR Member (Legal) also supported the concept of Advance Ruling in order to reduce litigation Member (IR Policy), however, voiced his concern due to the various decisions of the court and practical problems in the context of interpretation of laws.
It has been decided that FBR Member (Legal) and Member (IR Policy) to make a presentation on Advance Ruling mechanism and its implications and present the same in the next meeting of the implementation committee. The FBR Member (Legal) would present bifurcation of pending cases at various forums. During the meeting Chairman FBR suggested that specific amendments may be made to the existing provisions governing ADRCs in the light of the previous experiences. On the other hand, Chairman, TRC emphasised that the recommendations of the ADRC should be binding on both the parties, only then would this concept be successful.
Chairman, FBR agreed to make specific amendments in the governing provisions of ADRC. It was decided that the jurisdiction of the ADRC shall be restricted only to the extent of factual controversies. SA to Prime Minister desired that recommendations regarding constitution and working of ADRC to be made by Member (Legal) in the next meeting of the implementation committee. Special Assistant to the Prime Minister desired that recommendations regarding constitution and working of ADRC to be made by Member (Legal) in the next meeting of the implementation committee.