ISLAMABAD, June 11: The government through an amendment in section 48 of the Finance Bill 2008 has proposed to empower Central Board of Revenue (CBR) to write off tax arrears of any person in case the tax officials failed to recover the amount.
According to the amendment, if any arrears of tax, default surcharge, penalty or any other amount, which is adjudged or payable by any person and which cannot be recovered in the manner prescribed, the CBR may write off the arrears.
The CBR would lay down the procedures to write off the tax arrears or to empower its officers to do so on behalf of the board. This facility might be misused by some unscrupulous taxpayers or the tax officer.
The government has also bound the registered persons to declare their business bank accounts to the CBR and to require the companies to submit audited accounts duly certified by auditors to the CBR.
The registered persons, whose accounts are subject to audit, shall be required to submit a copy of the annual audited accounts, along with a certificate by the auditors certifying the payment of due tax by the registered person.
A range of other amendments were proposed in the Sales Tax Act regarding adjustment of input tax, alternate dispute resolution committee, refund of input tax, increase the record keeping time up to five years, rationalise the powers of arrest, to obtain information from regulatory authorities etc.
Under the proposed amendments, a registered person shall not be allowed to adjust input tax in excess of 90 per cent of the output tax period: Provided that the tax charged on the acquisition of fixed assets shall be adjustable against the output tax in 12 equal monthly instalments after the start of production of a new unit. However, some sectors were exempted subject to conditions laid down in the law.
If the input tax paid by a registered person on taxable purchases made during a tax period exceeds the output tax on account of zero rated local supplies or exports made during that tax period, the excess amount of input tax shall be refunded to the registered person not later than 45 days of filing of refund claim.
However, if a registered person is liable to pay any tax, default surcharge or penalty payable under any law administered by the board, the refund of input tax shall be made after adjustment of unpaid outstanding amount of the tax or, as the case may be, default surcharge and penalty.
The CBR revised the rules for composition of Alternate Dispute Resolution Committee to provide speedy resolution of the tax related cases. The committee will be constituted within 30 days of the filing of an application.
Through the Finance Bill, the cottage industry has also been re-defined. The industry will mean a manufacturer, whose annual turnover from taxable supplies made in any tax period during the last twelve months does not exceed Rs5 million or whose annual utility (electricity, gas and telephone) bills during the last twelve months ending any tax period do not exceed Rs600,000.
