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LAHORE: Excessive issuance of notices to retailers for integration with Point of Sale (POS) system without proper homework has led to plenty of litigation at the level of field formations of Inland Revenue Service (IRS), said sources.

They said courts are issuing four to five restraining orders daily against guesstimated pick and choose of taxpayers over the last one and a half month. These orders are pointing out time and again that the integration notices lack substance and material evidence.

According to the sources, en block notices are being issued without differentiating between retailers and hospitals and factories etc. Similarly, details of consumers have been acquired from the Lahore Electric Supply Company (Lesco) and integration notices have been dispatched to all those against whom a monthly bill of Rs 1.2 million reflects on the list. The regional offices have also issued notices to furniture stores at GT Road on the basis of area of 1000 square meter land they occupy. Originally, they are supposed to issue notices to retail outlets of leather, sports and textile products with such area of outlets. The sources said the service providers, who fall under the provincial domain, have also not been sifted out from the retail outlets.

Reliable sources have also confided that no proper field surveys have been carried out to measure sizes of retail outlets and most of the notices have been issued on guesswork. All such discrepancies not only lack true spirit of enforcement but it has opened up a window of corruption for the field staff, they stressed. Therefore, majority of taxpayers have left with no option but to approach the court of law and obtain restraining orders after receiving cold response from regional offices against their complaints.

The sources said the Federal Board of Revenue (FBR) was pressing field formations for broadening of tax net to increase revenue, a phenomenon that is leading to such discrepancies. They said the member keeps holding meetings with the IRS staff on daily basis, pursuing the commissioners to integrate more and more retailers to the tax net. The concerned commissioners, on the other hand, have seldom held meetings with the office bearers of market associations to assess the impact of Board’s policies on ground and rely on allegedly fake surveys of field inspectors to issue notices.

While pointing out another discrepancy, they said, the Board has offered an incentive of charging 10 percent sales tax to consumers against an invoice obtained through POS integrated system while the retailers are paying 17 percent on the purchase of inputs, thus creating a liability of 7 percent in the shape of refunds on the part of the Board.

Copyright Business Recorder, 2021

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