The Federal Board of Revenue (FBR) has empowered the officials of the Directorate General of Post Clearance Audit (PCA) to have free access to premises, equipment, stocks and accounts relating to manufacturers of the excisable goods and services for audit, search and probing of tax frauds. The FBR has considerably enhanced the powers of the DG PCA through an SRO.165(I)/2011 issued here on Wednesday.
According to the notification, the Director General/Directors would be empowered to operate as Chief Commissioner Inland Revenue for exercising powers under Chapter-XIII of the Federal Excise Rules 2005. The Additional Directors and Deputy Directors/Assistant of the PCA would be empowered to have free access at all times to any premises and to any place where excisable goods are processed, stored, sold or manufactured, or where excisable services are provided or rendered. The officials of the directorate have been authorised to exercise relevant powers of the Inland Revenue officers for investigation of the tax fraud cases through post clearance audit system.
They would be empowered to inspect the building, the plant, the machinery, the stocks along with the accounts, and may at any time check the records of the goods stocked in, or removed from the factory, or place, or their transfer within a factory, to that part of the premises, if any, in which they are to be used for the manufacture of any other commodity, or the record being maintained where excisable services are provided or rendered, whether for the purpose of testing the accuracy of any return or statement.
The concerned officials of the DG PCA would have the authority to stop and search any vessel, cart or other means of conveyance carrying excisable goods, and may seize and remove or detain any goods in respect of which it appears to him that duty should have been, but has not been levied.
The Director General/Directors and Deputy Directors/Assistant Directors would have the authority to conduct audit of the records and accounts etc, of any person registered under the Federal Excise Act. The officer who has conducted audit shall issue audit observation pointing out the contravention's and the amount of duty of excise or any amount payable.
If, within the period prescribed, no reply is received or the reply furnished by the registered person is found unsatisfactory, the Federal Excise Officer shall issue an audit report specifying the amount due from him under any of the provisions of this Act or the Rules made there under.
During audit, the officials of the directorate can check the quality of the records, accounts, invoices, returns and statements maintained, issued or furnished; the declarations, assessments and payments made on the monthly returns and challans submitted; performance of the obligations under the provisions of the Act and these rules; comparison of production vis-à-vis installed capacity; comparison of production vis-à-vis raw materials and inputs acquired; the valuation of the goods as made and declared; adjustments of duty availed; refunds and rebates taken; concessions and exemptions availed; stocks of inputs and outputs; and need and direction for further investigation.
The Directorate General of Post Clearance Audit would also have the powers of section 22 of the Federal Excise Rules 2005. The section 22 is related to the record of destruction's and remissions. They can exercise powers of section 23 of the Federal Excise Rules 2005 ie 'Receipt of non-duty paid un-manufactured tobacco in a factory'. They would be empowered to exercise powers under section 25 (Excise stamps in respect of cigarettes) of the Federal excise Rules for audit purposes.
The officials of the DG Post Clearance Audit can also exercise powers of section 45 'Receipt of payment by the Bank' under the said rules. The Bank official shall ensure that the particulars entered in all the three copies of the return are identical and that the amount deposited by the person tallies with the amount indicated as payable in the return, and shall thereafter sign and stamp the return indicating the date of payment of duty and submission of the return. The officials of the directorate can also exercise other powers mentioned in the SRO.165 (I)/2011.