PRA detects sales tax not deposited by withholding agents

LAHORE: Punjab Revenue Authority (PRA) has detected non-payment of a colossal amount of sales tax involving big private and public entities.

The entities withheld billions of sales tax on services as withholding agents but a part of the amount was not deposited in the provincial government exchequer. As per law, the service recipients withhold 100% amount of sales tax from service providers which is deposited in government exchequer within the stipulated time period.

A spokesperson for the PRA Monday said that an exhaustive data analysis exercise was undertaken by IT Section of PRA upon the directions of the PRA chairperson. The initial findings revealed that massive amount of tax was not deposited by these public and private entities. The spokesperson stated that the entities need to reconcile an amount of around Rs40 billion.

Without naming organisations, the PRA spokesperson stated that top organisations have already been show caused by the relevant Commissionerates. In order to mitigate any incidence of non-payment of tax in future, PRA introduced a check in its e-filing system. As per the check, tax claims based upon the withholding declaration earlier allowed but not paid in government treasury were disallowed while making it the part of their personal liabilities. Since the taxpayers were facing difficulties in filing of their sales tax returns, the check is temporarily removed for a month for taxpayers’ facilitation while educating them to ensure payment of tax by their withholding agents and to acquire the tax deduction certificate as prescribed under the relevant rules.

The PRA spokesperson stated that henceforth the taxpayers would not be able to get the credit of sales tax withheld until their Withholding Agent deposit the amount in government treasury against their NTN/ registration number.