20000411

CBR recovers Rs 43.5m of evaded ST thru special audits

Sohail Sarfraz

ISLAMABAD: The Central Board of Revenue has recovered Rs 43.565 million in sales tax through special audits of 58 companies within the jurisdiction of Collectorate of Sales Tax and Central Excise (East) Karachi.

The total amount of sales tax dues detected comes to Rs 171.875 million out of which Rs 43.565 million were recovered while balance amount is yet to be recovered.

These companies include leading textile mills, food and soap companies, export organisations, gas companies, oil and diesel manufacturers, cigarette manufacturing companies, weaving and fibres manufacturers, gas companies, leather craft and car manufacturers.

To gear up recovery, the CBR has directed all its Collectorates to submit latest position of tax evasion cases detected in audit report of special auditors, it was officially learnt.

These special auditors has been appointed u/s 32-A of the Sales Tax Act 1990 and the reports have been asked to be submitted before April 15, 2000.

The Revenue Department has also ordered monitoring and performance checks of special auditors through analysis of audit reports.

The CBR has also given instructions to various Collectors to submit comprehensive report about issuance of show-cause notices within two weeks where tax evasion has been pointed out in their relevant special audit reports, and who were not served with notices earlier.

Collectorates have been asked by the CBR to provide progress report (Starting from March 15, 2000) of adjudication and recovery about each special audit report u/s 32-A, submitted to various Collectorates was required to be sent to the Board by March 31, 2000. However, some of the reports are still awaited from these Collectorates.

To effectively check the performance of special auditors, several Collectors would critically analyze the special audit reports so far received, especially from the point of view of sustainability in adjudication of tax evasion amount pointed out in reports. The unit-wise results of such analysis should be sent to the CBR so that the performance of special auditor appointed under/section 32-A of the Sales Tax Act, 1990 could be watched from this angle as well.

These special audit reports have been prepared by the special auditors appointed u/s 32-A of the Sales Tax Act, 1990.

As per existing rules; Section 32A of the Sales Tax 1990 reads as: Special Audit by Chartered Accountants or Cost Accountants. "The Board may, by notification in the official gazette appoint a Chartered Accountants as defined under Chartered Accountant Ordinance, 1961 (X of 1961) or a firm of Chartered Accountants or a Cost and Management Accountants within the meaning of the Cost and Management Accountant Act, 1966 (XVI of 1966) or a firm of Cost and Management Accountants, for conducting special audit of records of registered person. Notwithstanding that records of a registered person have been audited by an officer appointed under section 30, the Board or a Collector may direct an auditor appointed under sub-section (1) to audit the records of any registered person.

An auditor appointed under sub-section (1), should have the powers of an officer of sales tax under section 25, 37 and 38."