The proposed amendment seeking rejection of all invoices of the blacklisted persons whether issued prior or after the blacklisting will create more room for corruption. Commenting on the Finance Bill 2011, the Karachi Sales Tax Bar Association (KSTBA) said the new sub section proposed to be added to section 21 of the Act to grant more powers to the commissioner in terms of rejecting invoices issued by the suspended taxpayer for the purpose of input tax adjustment or refund.
This amendment besides adding more miseries to the lives of genuine taxpayers will create problems for the board as the whole supply chain will be disturbed. Therefore, this action should only be restricted to the registered persons involved in issuing fake invoices or otherwise committed tax fraud.
The reduction in sales tax by 1 percent would not create any positive impact on the price structure of consumable goods, as the same would be absorbed by the industry. Therefore, the GST rate should be reduced to 12 to 10 percent. The proposed amendment in section 8-B (1) is in line with sprit of Value Added Tax and will allow taxpayers to get financial relief. The proposed amendment in sub-section (1)(3)(4) of section 30 need clarity as the tax officer, having a rank of inspector already has such powers. The new proposed change in section 47A regarding rectification application filed by the aggrieved persons, would help the board in disposal of pending applications. A provision proposed to be added in section 66 would restrict refund of Sales Tax in case of incident of tax passed directly or indirectly to the consumer. This section is in line with section 3B of Sales Tax Act 1990.
The new proviso is proposed to be added in section 74 to restrict the tax officers to obtain approval from the competent authorities in case of any delay on their part to meet the time limit or period provided under any provision of Law/Rules. This proposal will give more power to corrupt officers to violate the time limit to complete their job as provided in the Act and Rules, if the same was implemented.