KARACHI: Federal Tax Ombudsman Islamabad Dr. Asif Mahmood Jah directed Chief Commissioner IR, LTO Lahore to conduct probe and report compliance within 90 days; into charging of Sales Tax (ST) at time of booking of tractor but not disclosed by Millat Tractor Limited while issuing invoices at time of delivery of tractors, or while filing ST returns for month of June 2022. He has been also ordered to ensure that relief granted by legislature, through Finance Act, 2022 is passed on to end consumers, wherever 5 percent ST was charged by MTL before June 30, 2022 but delivery of tractors was made after July 1, 2022.

According to FTO order; complainant is entitled to refund of Rs 93,500 by MTL as tax charged at time of booking has not been paid to state treasury. LTO Lahore must ensure that relief is granted to complainant and other similar buyers with same facts. LTO Lahore, concerned field formation was in complete darkness but for intervention of this office and this “neglect, inattention, inefficiency and ineptitude in administration or discharge of duties and responsibilities” is clearly tantamount to maladministration in terms of section 2(3)(ii) of FTO Ordinance, 2000.  Complaint was filed by Abaid Ullah District Sialkot against Secretary Revenue Division, and Chief Commissioner LTO Lahore alleging illegal charging of Sales Tax and then further overcharging an amount of Rs 0.245 million on purchase of tractor by Millat Tractors Limited.

FTO findings disclosed that acts of omission and commission were held by FBR authorities cognisable u/s 2(3)(ii) of FTO Ordinance 2000, visible from contents of complaint and rejoinders and not reasonably rebutted by concerned tax authorities.

Sanctity of FBR’s tax regime cannot be left solely to market rather it needs to be upheld through strict vigilance, monitoring, and enforcement by field tax formations. Fraudulent overcharging in garb of taxation is tantamount to tax fraud, FTO said. Amount charged during month of June 2022 as ST in this case and other similar cases but not deposited in state treasury needs immediate intervention by department.

Published in The Daily National Courier, December, 24 2022

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