Year ended June 2011: FBR begins issuing ST audit notices to businessmen

RECORDER REPORT

ISLAMABAD: The field formations of the Federal Board of Revenue have started issuing sales tax audit notices to the taxpayers including Karachi-based manufacturers, exporters and traders, etc, for the year ended June 2011.

Talking to Business Recorder here on Friday, the ex-Chairman, Pakistan Hosiery Manufacturing Association, Saleem Parekh said that the business and trade has received audit notices for the financial year ended 2011 even before filing of income tax return.

It is surprising to note that they have received reports from their member exporters about sales tax annual audit notice for the year ended June 2011. The annual sales tax notices have been served even in cases where income tax returns have yet not been filed. The last date for income tax return for the year ended June 30 has just passed for individuals and association of persons, whereas return filing of companies was yet not due for the year ended June 2011. In this pretext, serving of annual audit notice reflects apparent deviation of boards policy for integrated audits after merger of income tax with sales tax into Inland Revenue Service.

He further said that no audit plan or policy was disclosed by the board as well for the audit plan 2011.

He informed that during their last meeting with tax authorities in Karachi, they raised this particular issue and tax officials response was very much clear that trade should be taken on board for audit policy, however it seems that field formation of the revenue department has least bothered about the reforms and policy set by the board.

The audit wing of the field formation is just seems to be interested in carrying out audits as many as possible during their present tenure to achieve the vested interests

It is interesting to note that after national audit plan 2007-08 carried out through computerised selection in a transparent way in the presence of tax payers and media, the board has failed to repeat such transparent means in issuance and selection of audits. Certain counters and tax experts also raised question for existing conventional module of audits after introduction of electronic filing of sales tax return.

According to such experts since FBR has now available comprehensive information in shape of purchase and sales details with sales tax returns, audit selections needs to be done after computerised scrutiny and initial review of the record. Issuance of usual notices in the modern era does not make justification, experts opined.