LTUs and RTOs told to check data from income tax department

20 Oct, 2008

FBR Chairman Ahmed Waqar has directed the tax managers to check the data of sales tax refund claimants from the income tax department before issuance of ST refunds to effectively control the menace of tax frauds and fraudulent claims in future.
Sources told Business Recorder on Sunday that the tax authorities have approved this new policy as an effective measure to control the phenomenon of bogus refunds.
According to the decision, before issuance of sales tax refund, it should be verified from the Income Tax Wing of respective Large Taxpayer Unit (LTU) and Regional Tax Office (RTO). The purpose of the whole exercise is to see whether the sales tax refund claimant has been making any payment of income tax. Other data of sales tax refund claimant available with the income tax department would also be checked for verification purposes.
Tax authorities said that cross verification, before issuance of refunds, should be made a regular exercise to fight the menace of fake refunds.
However, the FBR Chairman has also directed the relevant departments to promptly issue genuine refunds to improve the friendly image of the department.
In this connection, instructions have been issued to the directors-general of LTUs/RTOs. As per FBR directive, while issuing sales tax refund, verification regarding payment of income tax may be made to forestall the possibility of fake refunds. The DG should ensure this cross matching of information on regular basis.
Meanwhile, the FBR has issued instructions to the field formations to timely process small income tax refunds cases to avoid complaints on this issue. The timely action on refund claims would not give rise to complaints by the business community.

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