CBR to freeze sales tax defaulters bank accounts

To freeze the banks accounts of sales tax defaulters, the Central Board of Revenue (CBR) has obtained powers to restrict the sales taxpayers to use only one or two bank accounts, declared with the department, for carrying out all their business transactions.
Sources told Business Recorder on Sunday that the CBR has obtained the powers to check massive evasion of sales tax and use of large number of bank accounts by registered persons involved in fraudulent activities. The Board can impose restrictions on the taxpayer to declare and use one or two bank accounts to monitor the payments on account of purchase and sale transactions.
Explaining the rationale of the decision, sources said that section 73 was inserted in 1999 in the Sales Tax Act to ensure documented transactions. Despite existence of the above provisions, unscrupulous elements have been bypassing the system by maintaining numerous bank accounts in different names.
To encourage proper enforcement, it is necessary that the taxpayer should be bound by law to operate all their sales tax transactions through one or, maximum, two banks' accounts declared with the department.
This measure would not only be in favour of better monitoring but it would be easier for the sales tax officials to attach bank accounts of the defaulters, which is at present very difficult as the registered persons operate through various bank accounts not known to the department, sources added.
According to the amendment in Sales Tax Act, 1990; '(1A). the Board may require, by notification in the official Gazette, a registered person or class of registered persons to declare and use only as many number of business bank accounts as may be specified by the Board in such notification to make or receive payments on account of purchase and sale transactions for the purpose of this Act or rules made thereunder and to make payment of due tax from such accounts only.'