ISLAMABAD: Federal Tax Ombudsman (FTO) has barred the Federal Board of Revenue (FBR) from taking any coercive measures under Anti-Money Laundering Act, 2010 against the jewellers’ community till formulation of the Standard Operating Procedure (SOP) by tax department.
The whole issue is related to the SRO 924(1)/2020 issued by the FBR for framing cases of money laundering against any of the involved jewelers.
According to a new order issued by the FTO in favour of jewelers, the Review Petition has been filed under Section 14(8) of the Federal Tax Ombudsman Ordinance (FTO Ordinance), 2000, by the Complainant/Petitioner against the Findings dated 17.09.2025 carrying the following observation:-
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“4. During proceedings, it was examined and observed that the subject matter is related to implementation of SRO 924(1)/2020 under Section 6A of the Anti-Money Laundering Act (AML Act), 2010 (VI of 2010), which falls outside the scope of relevant legislation defined under Section 2(6) of the FTO Ordinance, 2000, for the purpose of FTO Secretariat’s jurisdiction and thus stands barred by the jurisdiction. 5. The complaint is accordingly disposed of being barred by jurisdiction under Sections 2(6) of the FTO Ordinance, 2000. File is consigned to record “, earlier observations of the FTO office added.
Briefly, the Petitioner (Pakistan Gems Jewelers Trade & Exporters Association), according to his Review Petition, stated that the FTO Office has relied upon the definition contained in Section 2(6) of the FTO Ordinance, 2000. The said provision defines “Relevant Legislation” to include a wide range of fiscal statutes, such as the Provisional Collection of Taxes Act, 1931; the Customs Act, 1969; the Income Tax Ordinance, 1979 & 2001; the Sales Tax Act, 1990; and such other laws as may be notified by the Federal Government, together with the rules, regulations, and notifications made thereunder. Further, Section 9(2)(b) of the FTO Ordinance, 2000, places a restriction on complaints relating to assessment of income or wealth, determination of tax or duty liability, classification or valuation of goods, or interpretation of law, rules, and regulations where statutory remedies of appeal, review, or revision are available under the Relevant Legislation.
In the instant case, however, the Complainant was not seeking any interpretation of law, rules or regulations nor challenged any assessment, classification or valuation. The limited relief sought was that the FTO Office may be pleased to issue a recommendation for correction of the impugned SRO (issued by the Revenue Division), which has become a source of harassment for jewelers. This clearly falls within the ambit of maladministration, as defined under the FTO Ordinance and is distinct from matters where alternate legal remedies of appeal, review, or revision are available. That the Complainant had filed a complaint against the Revenue Division, being the issuing authority of SRO 924(1)/2020.
The Revenue Division, in exercise of its administrative authority as regulator for jewelers, real estate builders, and developers, issued the said notification under the powers conferred by the Anti-Money Laundering Act, 2010, for framing regulations applicable to Designated Non-Financial Businesses and Professions (DNFBPs), including jewelers, real estate builders, and developers. In view of the foregoing, it is prayed that this Review Application may be accepted and a recommendation be issued for issuance of a separate notification for jewelers, after due consultation with the stakeholders.
During hearing, Petitioner along with ARs appeared and reiterated their earlier submission, while the DRs (Director DNFBPs) explained the rational and justification of issuance of SRO dated 29.09.2020.
The DR (Directors DNFBPs, Rawalpindi) stated that multiple meetings with the representatives of the Association have already been held and in response to the meetings held on 23.05.2025 a clarification was issued on the same date and was forwarded to the Association on 04.06.2025 but they were not satisfied with the clarification, however, the Department is willing to conduct a merit based review and necessary steps would be taken to remove the ambiguities and bottle necks pointed out by the Association and it would be done on all Pakistan basis. It was also committed by both the DRs (Directors DNFBPs Rawalpindi and Director DNFBPs HQs, Islamabad) on pointation by this Office that during this reconciliation process and formulation of SOPs, the Director General would inform all its field formations, not to conduct any coercive measures against the Petitioner. During review proceedings this Office has observed that some bona fide points raised by the Petitioner need to be reconsidered by the Federal Board of Revenue therefore, the subject Review Petition is accepted and the Directorate General of DNFBPs, is required to give a patient hearing to the Petitioner Association and make out SOPs for smooth functioning and proper operationalization of the impugned SRO, keeping in view the anxiety and bona fide concerns of the Petitioner Association but in accordance with law. This Review Petition is accordingly disposed of, the FTO order added.
Copyright Business Recorder, 2025
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