Mega suppliers' invoices: Genco claims inadmissible refund

A power generation company has claimed inadmissible input tax adjustments/refund against 100-150 sales tax invoices of suppliers that include oil marketing companies, oil and gas companies, chemical units and trading companies, causing huge loss to the national kitty.
Sources told Business Recorder on Saturday that the Federal Board of Revenue during cross verification of input tax/output tax adjustments through its automated system found that huge amount of inadmissible/unlawful amount of input tax was claimed by a power generation company.
The FBR has issued instructions to the Regional Tax Office Sukkur for further scrutiny and verification report of unlawful sales tax adjustments by the power generation company. Reportedly, the unit has claimed unlawful input adjustments/refunds on the basis of sales tax invoices of big suppliers in Pakistan.
Sources said after introduction of sales tax e-filing, input tax adjustment starts systemically verified on real time bases. This made tremendous development in reducing element of bogus adjustment. However since the system is yet new for the taxpayers and tax machinery there remains possibilities of improper capturing of data or data feeding error by concern stakeholders. Therefore before taking any serious view on such discrepancies, board would prefer to ensure such reports through further scrutiny by their filed formation. Sources said initially this case was referred to the Commissioner Inland Revenue RTO Lahore, however later he had informed that as per sales tax and income tax records, the question taxpayer bearing sales tax registration number (STRN).0304271600619 and National Tax Number 3049718 were under the jurisdiction of RTO, Sukkur, accordingly they issued request letter for transfer of case to the RTO, Sukkur. According to the details the automated scrutiny of the sales tax return filed by registered person for the tax periods of July 2009 to October 2010 has revealed that the unit has claimed unlawful input tax adjustment/ refund on the basis of invoices of the suppliers which may be scrutinised for further necessary action as per law may also be taken accordingly by the RTO, Sukkur.
On the said letter of the Lahore based Inland Revenue officer, sources said that the Chief Commissioner Inland Revenue RTO Lahore had informed the FBR Member Taxpayers Audit that the concerned quarter may be directed to delete an amount of Rs 2656 million from the account of RTO, Lahore. Moreover, the information received from the Board, for the period July 2009 to August 2010 has been perused and found that the entries concerning to the taxpayer having STRN. 0304271600619 relates to RTO Sukkur on the point of jurisdiction, the same is thus transferred there for further probe.