The FBR has issued an SRO.494(I)/2013 here on Monday to announce the amnesty schemes for customs, sales tax, federal excise duty and income tax. According to the notification, the Board has exempted the whole amount of default surcharge, penalty and other surcharge payable by a person against whom an amount of sales tax, federal excise duty, customs duty or income tax (including withholding tax) is outstanding on account of any audit observation, audit report, show cause notice, adjudication or assessment order, or who has failed to pay any amount of sales tax, federal excise duty, customs duty and income tax (including withholding tax) or claimed inadmissible input tax credit, adjustment, refund, drawback or rebate due to any reason. This is subject to the condition that the whole outstanding principal amount of sales tax, federal excise duty, customs duty or income tax (including withholding tax), as the case may be, is paid by June 30, 2013.
The benefit of the Notification shall not be available to cases of fraudulent refunds, drawback or any case involving tax or duty fraud or where prosecution proceedings have been initiated, FBR added. Sources told Business Recorder that recently, with a view to encourage payment of dues involved in smuggled/non-duty paid vehicles and misuse of the zero-rated sales tax facility, the Federal Government announced liberal schemes through SRO 172(1)/2013 dated March 5, 2013 and SRO 179(1)/2013, dated 07.03.2013 respectively by allowing payment of duty and taxes without default surcharge and penalty. This incentive was largely appreciated by different Chambers of Commerce and Industry, Associations and Trade Bodies of the country, and requests have been made for a similar incentive for all other taxpayers. It is a fact that a large number of cases are stuck up at various stages of litigation, involving billions of rupees. During various meetings, taxpayers indicated that the primary reason for reluctance to pay these taxes is the heavy involvement of default surcharges and penalties. They have expressed willingness to make voluntary payment of the outstanding amount of Sales Tax, Federal Excise Duty, Customs Duty or Income Tax involved in these cases if default surcharge and penalty are waived. Similar incentives have been granted in the past which yielded desired results.
In order to encourage the taxpayers to make payments of the outstanding dues, a similar scheme has been allowed for this year waiving the whole amount of default surcharge, penal surcharge (in case of overstayed warehoused goods) and penalty on account of non-payment of any outstanding amount of duty and taxes subject to the condition that the whole outstanding principal amount of Sales Tax, Federal Excise Duty, Customs Duty and Income Tax, as the case may be, is paid by June 30, 2013. However, this benefit shall not be available in cases of fraudulent refunds, drawback cases or any other duty/tax fraud where prosecution proceedings have been initiated.