The Central Board of Revenue (CBR) Chairman M Abdullah Yusuf on Tuesday assured business community to rectify the problems regarding the new law 'Missing Traders Fraud' under which all partners in the supply chain would be jointly liable to deposit the unpaid amount of tax, not paid at any stage of supply and income tax provision for making payment exceeding Rs 10,000 through normal banking channel.
He said that both these amendments made in the Sales Tax Act, 1990, and the Income Tax Ordinance, 2001, respectively, through the Finance Bill 2006, would be examined in consultation with the stakeholders.
In a meeting with a delegation of Rawalpindi Chamber of Commerce and Industry (RCCI) headed by its President, Jalil Ahmad Malik, Chairman CBR said that the board would arrange meeting of the CBR officials with the business community to discuss the substitution of clause (1) of section 21 of the Ordinance 2001, through Finance Act 2006.
Regarding insertion of new sub-clause (ca) in Section 8 of the Sales Tax Act, CBR chief said that it had not been implemented yet due to the reservations shown by the business community. Responding to a query regarding making payments through banking channels for every transaction exceeding Rs 10,000, he said that this had been implemented for some sectors whereas transport and other daily use sectors were exempted from this provision.
Malik apprised the CBR Chairman about the reservations of the business community regarding amendments of Finance Act. He also informed him about the problems business community was facing.
"Through Finance Act 2006, the scope of payment of expenditure exceeding Rs 10,000 has been enlarged and all banking channels have been covered.
"Keeping in view the local business environment, it is not possible to make all payments through banking channels for carrying out day to day transaction exceeding Rs 10,000," Malik said.
"A new sub clause has been inserted in section 8 of the Sales Tax Act which is reproduced herein, 'The goods in respect of which sales tax has not been deposited in the government treasury by the respective supplier", he said.
He said that insertions of above 2 provisions created problems for the business community. Section 8 of the Sales Tax Act was amended through Finance Bill 2006 to disallow refund or 'input tax adjustment' in case the tax claimed has not been deposited by the respective supplier. Practically, it is not possible to get evidence of sales tax payment from the supplier.
He said the business community is dealing with many national and multinational companies involving hundreds of customers in a month. The board has not yet taken all these companies to update the stakeholders about the suspected/blacklisted units.
Thus, verification of data through any system is impossible and shifting of burden on the registered sales tax person for production of evidence is a sign of inefficiency on the part of the CBR, Malik added.