Uphill revenue targets: RTO conducting raids on premises of commercial importers

Regional Tax Offices (RTO) in order to meet uphill revenue targets have started conducting raids at the premises of commercial importers to collect sales tax, it was learnt here. According to sources, RTOs based in Karachi with the aim to meet its unprecedented revenue target have started exercising the powers of section 38 of Sales Tax Act 1990.
They are harassing taxpayers' particularly commercial importers by conducting raids at their premises under section 38 of Sales Tax Act 1990. The sources further said that field formation was claiming on the basis of annexure F of the sales tax returns that commercial importers were involved in under-invoicing that led raising tax demands against them.
However, the exact stock value is not correctly reflecting in the carry forward of sales tax returns, which appears that this exercise is solely being executed to meet the revenue shortfall, the sources claimed.
Moreover, they said that no matter the tax demands, being created by the field formation of the RTOs, were genuine or not but the field formation was harassing the taxpayers to collect sales tax and they were also issuing show cause notices.
Meanwhile, tax experts said that if the taxpayers successfully clarified their position, sales tax collected in advance would be adjusted in future else they were treated as tax evaders and penalty would also be imposed.
When contacted, official sources, who did not want to be named, confirmed to have been started using the powers of section 38 of the Act by the RTOs, saying that the action was taken under the directives of the FBR.
They said that the board had now decided to squeeze the noose around the persons involved in under-invoicing and over-invoicing and added that the legal framework in this regard was also being evolved and hopefully be announced in coming budget.
They further said: "We have reports that the majority of commercial importers through under-invoicing are not only evading taxes at import stage but also mentioning suppressed stock value in their returns. Keeping the said in view, the crackdown has been initiated against the commercial importers to recover evaded taxes." They further answered that taxpayers had now no option but to clarify their position and if they did so then all notices would be withdrawn and sales tax collected from them would be adjusted on monthly basis.