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FBR starts crackdown against tax defaulters

FBR starts crackdown against tax defaulters

ISLAMABAD: FBR, in a rare move, has started crackdown against 30 big tax defaulters of steel sector in Lahore and has registered six FIRs so far.

The steel sector in the country is ruled under the Sales Tax Special Procedure Rules, 2007 which provides two regimes for payment of sales tax by the steel melters and re-rollers. As per calculation, incidence of tax under the Special Procedure is Rs3,200 Per Metric Ton (PMT) (800 Units are consumed per MT) whereas incidence under the Normal Regime comes to Rs10,200 PMT.

As many as thirty steel units filed writ petitions in the Lahore High Court seeking court’s orders to pay tax under the normal regime. However, after exclusion of tax from electricity bills, the petitioners (tax defaulters) did not pay tax with their sales tax monthly returns. The RTO Lahore Chief Commissioner pursued the cases and told the high court that the defaulters did not pay any tax after getting interim relief from the court to get the tax excluded from the electricity bills.

Justice Syed Mansoor Ali Shah advised the chief commissioner that there was no bar to proceed against the tax defaulters by following procedure laid down under the Sales Tax Act 1990 for recovery under the Normal Tax Regime.

The Lahore RTO, in this regard, has initiated a campaign against steel melting furnaces and re-rolling mills who had evaded sales tax amounting to approx rupees one billion. Big defaulters were recognised and after determining evaded amounts on case, show cause notices were issued to them.

In consequence of recovery proceedings Rs100 million has so far been recovered from the defaulters, whereas the remaining amount is expected to be recovered in due course.