GOVERNMENT OF PAKISTAN

REVENUE DIVISION

CENTRAL BOARD OF REVENUE

(SALES TAX WING)

C. No. 5(147)ST-Int.Audit/2002                                                                   Islamabad, the 20^th December, 2003.

SALES TAX GENERAL ORDER  6/2003

        In order to ensure that the Sales Tax Collectorates follow a uniform policy for blacklisting and suspension of sales tax registration/enrolment of suspected persons under section 21(4) of the Sales Tax Act, 1990 and for subsequent proceedings in such cases, the Board is pleased to make the following procedure:

1.   Blacklisting and suspension of registration/enrolment of suspected persons

(i)         A registered or enrolled person may be blacklisted or his registration/enrolment suspended pending further inquiry where the Collector is satisfied that he has issued fake invoices, evaded tax or committed tax fraud. The bases for such satisfaction may include the following:

(a)  Non-availability at the given address;

(b)  Refusal to allow access to business premises or to furnish records to an authorised sales tax officer;

(c)  Abnormal tax profile, such as taking abnormal input tax adjustments, continuous carry-forwards, or sudden increase in turnover;

(d)  Making substantial purchases from or supplies to other blacklisted/suspended persons;

(e)  Non-filing of sales tax returns for six or more months;

(ii)        Before initiating any action to blacklist or suspend any registered or enrolled person, the Collectorate shall make efforts to confirm the facts and veracity of the information. In case of reported non-availability at the given address, it may be checked from the Registration Division whether the person submitted any information about change in address, the given address may be visited by an officer of the Collectorate, or an attempt may be made to trace the person from documents such as National Identity Card, income tax records, bank account, etc. In case of reported non-access to the premises and/or non-production of record, a notice may be issued through registered post to the person to allow access/produce records, clearly indicating that refusal or delay will result in blacklisting or suspension of his registration/ enrolment. enrolment.

(iii)        If the Collector is satisfied that the person needs to be blacklisted or his registration/enrolment suspended, he shall issue an order for the same, mentioning reasons for such blacklisting/suspension. Copies of the order shall be endorsed to the person concerned, all other Sales Tax Collectorates, the Sales Tax Wing computer system and the STARR system. Each Collectorate shall circulate all such lists to their refund, audit and other concerned staff to ensure that no refund is paid or input adjustment is taken on invoices issued by such suspected persons.

2.   Removal from blacklisting or suspension lists

(i)         After issuing order for blacklisting or suspension of registration/enrolment, the Collectorate should proceed to conduct inquiry under section 21(4) of the Sales Tax Act, 1990, and in case of confirmation of the offence, proceed to take legal and penal action under the relevant provisions of the Sales Tax Act, 1990. Such inquiry may extend to suppliers and buyers of the blacklisted/suspended person to ascertain whether any inadmissible inputs or refunds have been taken by them.

(ii)        Where the case is not established against a suspected person, the Collector shall issue an order revoking the blacklisting or suspension of registration/enrolment, endorsing copies to the person concerned, all other Sales Tax Collectorates, the Sales Tax Wing computer system, and the STARR system for deletion from their lists. Each Collectorate shall circulate copies of all such orders to their concerned staff for information.

(iii)       Unless the Collector specifies otherwise, such orders shall have effect from the date of original blacklisting or suspension of registration/enrolment of the concerned person, so that invoices issued by him during the intervening period are acceptable.

(iv)        In case audit of the blacklisted/suspended person was already conducted before initiating the inquiry under section 21(4) of the Sales Tax Act, 1990, and such audit report is approved by an officer not below the rank of an Additional Collector, it may be accepted for the purpose of revoking the blacklisting or suspension/enrolment. However, if the audit report is not so approved, and upon inquiry, an offence is established against the blacklisted/suspended person, appropriate action shall also be taken against the officials who submitted the defective audit report.

(v)         In case of Sales Tax House, Karachi, the order for blacklisting/suspension shall be issued by the Collector of Sales Tax (Headquarters) on the advice of Collector of Sales Tax (Enforcement) or (Audit) or on his own information. The order for revoking any blacklisting/suspension order shall be issued by the Collector of Sales Tax (Headquarters) immediately on receipt of a clearance report from the Collector of Sales Tax (Enforcement) or (Audit) after completion of the inquiry under section 21(4) of the Sales Tax Act, 1990, or audit, as the case may be. Each such order shall cite the reference number of the relevant letters from Collector (Enforcement) or (Audit).

(DR. ASHFAQ AHMED TUNIO)

Secretary (Sales Tax)