FBR to issue legal clarification about scope of builders & developers

ISLAMABAD: The Federal Board of Revenue (FBR) will issue a legal clarification whether contractors involved in public sector construction can be clubbed with private sectors Builders & Developers for assessment of taxes.

In this regard, Federal Tax Ombudsman (FTO) Friday issued instructions to the FBR to issue a clarification about the scope of builders and developers.

Through an order issued on Friday, the FTO has legally declared that cases of builders/developers have been transferred to specialized zones as a special class of persons.

“The act of the Board to transfer cases as class of persons is not illegal and within the ambit of the powers conferred by the Income Tax Ordinance, 2001. However, it is also evident that the transfer of case from Quetta to Karachi has caused severe hardship to the taxpayer and it is his genuine right to be taxed in the jurisdiction by facilitating him at the doorstep where the business is located and is being done,” FTO order added.

The taxpayers are engaged in the business of Builders/Developers and the Federal Board of Revenue vide its Notification transferred the jurisdiction of the tax payers as a class of persons who are engaged in the business of Builders/Developers from RTO, Quetta to Medium Tax Payers office (MTO) Karachi.

According to an order of the Federal Tax Ombudsman (FTO) issued on Friday, whether contractors involved in public sector construction can be clubbed with private sectors builders & developers is yet another area which needs FBR’s deliberations. In any case, no discriminatory treatment with any individual or a class of persons is desirable.

The allegation that some of the similar cases have reportedly been transferred back to RTQ Quetta also necessitates probe by the concerned authorities at FBR HQs.

Some of the identical cases relating to KP and Balochistan are currently pending at superior judicial fora. Uniform treatment of all identical cases is the only solution of this issue.

FTO has directed the FBR to reprimand the concerned officers of RTO, Quetta and MTO, Karachi for not attending the hearing. In this complaint, FBR needs to take a pragmatic view.

IR Policy wing FBR to decide the issue of jurisdiction in line with other identical cases and in the light of orders by the superior judiciary; (ii) review individual facts of the instant case, so as to reach at a legal and equitable decision/conclusion, FTO order added.

Copyright Business Recorder, 2023