LAHORE, May 18: Only six or seven businessmen have responded to the alternate dispute resolution (ADR) offers made by the Regional Sales Tax Collectorate in 297 cases involving Rs1.2 billion tax disputes apparently on account of lack of information about the system. Regional Central Excise and Sales Tax Collector Muhammad Nazim Saleem stated this while inviting the business community to benefit from the inexpensive system of out-of-court settlement of disputes introduced by the Central Board of Revenue in March 2003.
He said the directorate had not only made ADR offers to businessmen but had also withdrawn appeals in 50 cases involving Rs99 million additional tax demands or relating to the pre-taxation period on its own because the principal tax had been recovered and the national exchequer had not suffered any loss.
He said the ADR system was a useful channel introduced by the CBR for reducing the huge number of pending cases through out-of-court settlement without foregoing the right to approach the courts. The procedure was applicable to disputes relating to all kinds of taxes.
Explaining the ADR procedure, he said the taxpayers desirous of availing the facility were required to submit a formal application to the CBR.
A three-member committee, headed by a private sector businessman and consisting of a chartered accountant or lawyer and the sales tax collector other than the one in whose jurisdiction the applicant falls would be notified by the CBR for alternate dispute resolution on receipt of such application.
He said the committees constituted for the dispute resolution would hear the point of view of taxpayers and tax collectors after issuing a 15-day notice and submit its recommendations to the CBR for issue of the dispute resolution notification after necessary scrutiny. The taxpayers did not lose the right to continue pursuing the cases pending in courts in case the CBR disagree with the recommendations. He, however, clarified that the CBR had accepted almost all the recommendations forwarded by the ADR committees so far.
He said 1,612 cases of the Lahore Sales Tax and Central Excise Collectorate involving Rs17,013.655 million were pending or awaited adjudication. As many as 273 cases were pending in the supreme court, 582 in the high court, 135 in appellate tribunals, 550 were in adjudication stage and 72 were unclassified.
He said the Sales Tax Directorate had blacklisted 955 companies involved in issuing bogus invoices for claiming tax refunds. Hundreds of FIRs had been lodged against such companies.
Inviting the business community to avail the ADR facility, committee chairman and ex-LCCI president Sheikh Muhammad Asif said the committee forwarded recommendations to the CBR after hearing the cases referred to it within six to eight weeks which issued a notification after a month or so.
He said appeals could also be filed against the recommendations after the issue of the notification. The applicants were not burdened by expenses as chairmen of the committees usually arranged hearings in their offices.