Sheer negligence showed by the Federal Board of Revenue (FBR) in regard to the extinction of sales tax registration of service providers has cost millions to the national kitty; it was learnt here. According to sources, the service providers, who got registered with the FBR before the 18th Amendment, had now been paying tax on services to the provincial authorities since 2011.
However, the FBR instead of blocking their sales tax registration has made all sales tax registration active in the system, providing a chance to the unscrupulous elements for using these registrations for fake tax adjustments.
Recently, the Federal Investigation Agency (FIA) has detected a case and initiated inquiry against six customs clearing agents, who, what the agency claimed, were involved in adjusting millions of rupees sales tax against fake returns.
On the other hand, the Karachi Customs Agents Association (KCAA) in response to the said inquiry is planning to request the agency to conduct a proper investigation into the matter of bogus sales tax returns.
The KCAA in its drafted letter said that customs agents being service providers were registered with the FBR before the 18th Amendment and now they are paying taxes to the Sindh Revenue Board (SBR). Therefore, the notices issued for recovery of heavy amount to their members are pertaining to the year 2013 and for this period, customs agents were not on the FBR sales tax portal but on the SRB portal.
The KCAA further stated sales tax registration of customs agents were misused by some unscrupulous elements, who transacted illegal business by using their FBR user IDs. They also requested the FIA to call all records from PRAL to find out the real culprits behind this mega scam.
Meanwhile, sources in customs agents on a condition of anonymity said that they had made several requests to the authority concerned in FBR to suspend their sales tax registration as they were now falling in the ambit of the SRB. But the FBR officials instead of taking action on their plea directed them to file 'nil' returns.
When contacted, the FBR officials, who did not want to be named, said that customs clearing agents, who were named in this scam, had never sent any request to the board for the removal of their IDs from the system and added that the FBR had suspended many sales tax registrations of service providers on their requests and they had no issue in this regard. They further said that taxpayers were required to send their written requests to the board for the suspension of their sales tax registration.