ISLAMABAD, April 26: The Federal Tax Ombudsman (FTO), Justice (Retd) Saleem Akhtar has directed the Central Board of Revenue (CBR) to waive additional tax and penalty of all those ginning units who had paid principal amount of sales tax.

The decision was taken on the complaint of Mian Cotton Ginning & Pressing Factory, who alleged that despite the payment of sales tax before the deadline, the tax authorities levied additional tax on them, said an official announcement on Saturday.

The government has levied sales tax on cotton ginners in 1996-97, while at the same time the special procedure for cotton ginning industry rules provided for payment of sales tax by the spinning mills or the oil mills, who received the lint cotton and cotton seed from the ginners.

The cotton ginners located in far flung areas of Sindh and Punjab received the payments late and could not deposit them in time due to which tax officials issued them notices for additional tax and penalty.

To find out a solution for the problem, it was already decided between chairman PCGA and the CBR that if the ginning unit withdrew cases from the courts against levy of sales tax on cotton and cotton seed and paid due sales tax to the department, the CBR would consider the PCGA request for waiver of additional tax and penalties.

Despite CBR’s commitment to consider the waiver in the complainant case, the adjudicating officer passed order that they were liable to pay the additional tax.

The FTO directed the CBR that in case of waiver of additional tax, it should direct the collector to refund the amount within two months.

The compliance report should be produced to this office within three months, said the FTO.