Government departments required to withhold ST, file return
The Federal Board of Revenue (FBR) has directed the field formations to ensure that the departments working under the control of federal government, provincial/district governments as well as Military Accountant General are legally required to withhold sales tax and file return.
Copyright Business Recorder, 2014
Sources told Business Recorder here on Thursday that the FBR has drafted a withholding tax enforcement plan for 2014-15 being dispatched to the Large Taxpayer Units (LTUs) and Regional Tax Offices for compliance/enforcement. According to the FBR instructions, the government departments under the control of federal government, provincial/ district governments and Military Accountant General are required to withhold sales tax and file return. The Commissioner concerned shall confirm from the Drawing & Disbursement Officer of the concerned government departments regarding filing of sales tax returns /payment of withheld sales tax.
The FBR said that the tax is required to be deducted/collected at source by the persons deputed under the law. The prescribed persons are also required to deposit the tax so deducted/ collected within the given time period and furnish periodic statements thereof.
The following line of action is to be adopted with respect to withholding agents/ prescribed persons as they fail to discharge the legal obligations: Firstly, initiate and complete proceedings to declare the prescribed person as taxpayer-in-default and recover the tax due along with additional tax/default surcharge in case the prescribed person defaults either in deduction/collection of tax or having so deducted/collected, fails to deposit the same within the prescribed time period. Secondly, the field formations would initiate and complete penalty proceedings where the prescribed person fails to furnish the statement by the due date.
The LTUs/RTOs shall enforce compliance from un-registered persons, non-filers/stop-filers, short-filers, null-filers for the Financial Year 2014-2015 by following enforcement procedures given hereunder for achievement of laid down benchmarks on monthly basis and complete the task by 30.6.2015. The FBR has directed the field formations to ensure that the withholding agent has correctly withheld the prescribed amount of Sales Tax from a registered person and has deposited the same by the due date in the prescribed head of account.
Secondly, the field formations should monitor that the prescribed return has been correctly filled and timely filed by the withholding agent. Thirdly, they should monitor that the amount of sales tax at the applicable rate of the value of taxable supplies received from unregistered persons has been correctly calculated/deducted and deposited in the prescribed head of account within due date by the withholding agent.
Fourthly, the field formations must ensure that all the return cum payment challans submitted in the National Bank of Pakistan by the withholding agents (other than the Government Departments) have been timely sent by all the designated branches of the National Bank of Pakistan to respective RTOs/LTUs.
Fifthly, all the requirements as per Sales Tax Special Procedure (Withholding) Rules, 2007, SRO 660(1)/2012 dated 30.6.2007 (amended up to date) may be followed/ looked into, FBR directed the LTUs/RTOs. Sixthly, as far as individual performance parameters are concerned, the performance measurement shall be an essential element of this plan to evaluate effectiveness of the enforcement activities. Accordingly, performance of each LTU/ RTO shall be evaluated on monthly basis in terms of the Performance Parameters as per Appendix-III, FBR added.