ISLAMABAD: The documented steel sector (large steel producers) has offered the Federal Board of Revenue (FBR) to take their input for effectively dealing with the problem of fake invoice with structural changes in sales tax law to make it impossible for any taxpayer to use flying invoices.
In a communication to Dr Muhammad Ashfaq Ahmed Member (Inland Revenue) Operations, Syed Wajid I Bukhari Secretary General of the Pakistan Association of Large Steel Producers, here on Tuesday, the association has submitted a plan to the FBR for controlling the menace of fake/flying invoices.
The association has assured the FBR that the documented sector is ready to share the techniques used by the informal sector to evade sales tax within the supply chain and use of fake and flying sales tax invoices at various stages by the un-documented units operating out of the formal regime.
The secretary general of the association said that the ongoing practice of taking claims/inputs through fake and flying sales tax invoices is resulting in loss of billions of rupees to the exchequer every month.
At the same time this practice is destroying the documented steel manufacturers who pay the government taxes ethically.
As a result of this menace, the documented and revenue contributing sector has been put in a state of great disadvantage and as a result the documented sector is likely shrink further in comparison to tax evaders.
The menace of flying/fake invoices that remains unchecked so far is going to result in closure of the documented steel sector and this will further discourage future investments in the steel sector, he said.
The FBR has a standing operating procedure (SOP) to deal with the cases involving fake/flying invoices and the Directorate General of Internal Audit IR has powers to check cases of fake/flying invoices in the field formations across the country.
It is urged upon the apex body to regulate the problem by mutually working with the documented sector.
It is suggested that the first step is the identification of fake/flying invoices.
After having meaningful discussion, the association and the tax authorities can make a way out to deal with the problem of fake invoice with structural changes in sales tax law to make it impossible for any taxpayer to use flying invoices.
Bukhari informed that the present system of GST in which its wide open to take input of all/any HS codes, this problem of flying invoices cannot be checked.
The association is ready to cooperate with the FBR for eradicating this problem from the steel sector, he added.
Copyright Business Recorder, 2021
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