March 12, 2008	Wednesday	Rabi-ul-Awwal 3, 1429

KARACHI, March 11: The State Bank of Pakistan has warned banks to stop irregularities regarding the lodging of Income Tax and Sates Refund Orders or face punitive action.

“It has come to our notice that some of the banks are committing irregularities while lodging Income Tax or Sales Tax Refund Orders (issued by Tax Department) for payment to their beneficiaries,” said a circular issued on Tuesday.

The SBP said a single customer’s account is being used for lodging multiple Income Tax Refund Orders belonging to different beneficiaries.

The fact is that Income Tax Refund Orders are non-negotiable instruments and are payable only to the payee on proper identification or to the payee’s banker on certification that the amount will be placed to the payee’s credit on realisation.

“In view of this, all banks are advised to immediately stop the practice of crediting multiple Income Tax Refund Orders (being a non-negotiable instrument) belonging to different beneficiaries to a single account.”

The central bank further ordered the banks to make proper procedure to ensure payment of Income Tax and Sales Tax Refund Order to its beneficiary.

Banks have been advised to strictly comply with the above instructions.