ISLAMABAD, June 20: The government has introduced amendments in sales tax act empowering sales tax officer to determine minimum tax liability of a registered person in case of non-filing of return.

Officials told Dawn on Friday the decision was taken to bring into sales tax net the potential taxpayers, who were not filing their returns with the department to evade due taxes.

The officials said the Central Board of Revenue in collaboration with the chambers of commerce and industry and trade associations would work out conditions for determining the minimum tax liability for the non-filers.

The amendments introduced in the sales tax act 1990, through the Finance Bill 2003-04, read: “Notwithstanding anything in sub-section (1), where a registered person fails to file a return, an officer of sales tax department, not below the rank of assistant collector, shall subject to such conditions as specified by the Central Board of Revenue, determine the minimum tax liability of the registered persons”

According to other amendments in the act, a new section had been introduced to empower the board to post a sales tax officer to the premises of the registered persons or class of such persons to monitor production, sale of taxable goods and the stock position.

It was further decided that in case the collector on the basis of material evidence had reason to believe that a registered person was involved in evasion of tax or tax fraud, he was also empowered to post an officer of the sales tax to the premises of such registered persons.

Tax experts told Dawn that the introduction of this section was quite surprising keeping in view that a similar provision contained in the Central Excise Act 1944 was already withdrawn two years back through the Finance Ordinance 2001.

They said the tax authorities were already adequately empowered to access to premises, stocks, accounts and records of the registered persons and to search any documents kept at any premises owned by the registered persons under section 38 and 40A of the act.

Thus inclusion of this new section appears to enhance the discretionary powers of the tax authorities unnecessarily, which was not in line with the efforts the tax authorities have committed to creating tax friendly environment, they said.

The experts said replacing the word “may cause arrest of such person” for the word “may arrest such person” in the sales tax act would now empower the tax officer to seek help from the government agencies for arrest of a person, which is discriminatory.