The arrest of a sales tax defaulter by Regional Tax Office (RTO) Rawalpindi has sent a loud message that tax evaders will not be able to evade legal action one way or the other. Sources told Business Recorder here on Thursday that the RTO Rawalpindi has recently arrested a sales tax defaulter, who tried to evade the authorities through a fake tax payment cheque.
On the clear directives of the Federal Board of Revenue (FBR) for strict enforcement of law against the defaulters, the said RTO has initiated action against the chronic sales tax defaulter. The tax department had lodged an FIR against the defaulter and later was arrested on January 7, 2012. The arrested defaulter, who was from Jhelum, was basically involved in the business of taking contracts and making supplies to the buyers.
At a later stage he not only paid the due amount of tax but also deposited penalty under the relevant provisions of the tax laws. It is a classic example of enforcement against the evader where maximum action of arrest has been taken against the chronic defaulter and now similar cases could be made within the jurisdiction of other RTOs. The action of the RTO Rawalpindi has also forced other suppliers and contractors etc to ensure payment of their due amount of taxes to avoid extreme action like arrest.
According to FIR, defaulter had given cheques to the Officer Inland Revenue Tax Facilitation Centre (TFC) Jhelum, but later on cheques were dishonoured by the bank with the remarks that account is dormant. Taking prompt action, the officials of TFC Jhelum repeatedly approached tax defaulter but he did not approach the office to clear his outstanding tax dues.
Finally the Civil Lines Police station Jhelum lodged an FIR against the defaulter under section 489F of Pakistan Penal Code on the directions of DPO Jhelum as requested by Officer Inland Revenue TFC, Jhelum. Following arrest of the defaulter, he made full payment against the bounced cheques along with payment of penalty.
Sources said that the Chief Commissioner Inland Revenue RTO Rawalpindi Shahid Anwar Khan advised all his Inland Revenue officers to recover outstanding tax payment from chronic tax defaulters without fear and pressure in accordance with enforcement plan issued by FBR with the approval of its Chairman Salman Siddique.
Sources said that there are a number of contractors/suppliers who did not make sales tax payment to the FBR which they have actually received from different government departments like Military Accounts, corporations, local governments. According to Sales Tax Rules, all government departments deduct 1/5th of the sales tax amount billed and remaining amount of sales tax be paid to the supplier/contractor.
It is the prime responsibility of the supplier/contractor to deposit the remaining amount of sales tax after claiming input tax (if any) into National Bank of Pakistan. In many cases, sales tax to the tune of millions is being evaded by suppliers/contractors by not depositing due amount of sales tax. If all RTOs launch exercise on the pattern of RTO Rawalpindi against the chronic tax defaulters, it would not only act as deterrent but also ensure recovery of due amount of tax, sources added.