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Thursday March 28, 2024

Tax practitioners oppose online application requirement

Exemption certificates

By Shahnawaz Akhter
January 17, 2015
KARACHI: Tax practitioners have strongly opposed the unannounced implementation of the online application for exemption certificate by the Federal Board of Revenue (FBR), which was causing delay in the clearance of consignments at the Customs stage.
In a letter sent to Tariq Bajwa, chairman of the FBR, on Friday, Syed Wasim Hashmi, president of the Karachi Tax Bar Association (KTBA), expressed surprise over the revenue authority’s decision that all applications for exemption certificates should be filed through IRIS.
“These directives have no legal sanction or support as neither the Income Tax Ordinance, 2001 nor the Income Tax Rules, 2002 laid down such a requirement,” the KTBA said in the letter.
A day ago, the FBR had launched the online system for certificates application for exemption from advance tax on imported goods, especially for raw materials.
The KTBA said the new procedure were introduced by the FBR / PRAL without any prior stakeholders’ consultation nor any instruction guide was published prior to instruction of requirement, causing frustration in the taxpayers and shattering the confidence built over a period of time.
Hashmi said some members had complained that their online applications were not reached commissioners despite passage of three days.
The FBR in the latest system has made a requirement of putting HS Code for processing the application.
The KTBA said such a requirement had made the procedure further complicated.
The tax practitioners explained it would be very difficult for a taxpayer to insert HS Code of an item when the raw material was filed in a compound shape. Such requirements have delayed consignment clearances, they said.
IRIS, which was launched for income tax returns filing, was already facing criticism by the tax practitioners and the business community. They have demanded on several occasions for bringing a professional IT expert for the tax matters, as existing Member IT is the FBR official and also chief executive of PRAL.
The KTBA in its letter demanded the FBR to defer the implementation of such a requirement for filing exemption application through IRIS till March 31.
“In the meantime, it instructs PRAL to carry out discussions with the stakeholders and publish instructions guide so that the process of issuance of exemption could become hassle-free,” the letter added.
When contacted, officials at the Inland Revenue said the online exemption certificates were already available for industrial raw material imports and imports made by non-residents.
“Now online exemption certificates will be available for all provisions related to the Income Tax Ordinance, 2001,” a senior FBR official said.
In the past, the exemptions certificates issued against various provisions of tax laws for imported goods were valid for one-year, but now it restricted for only six months. The exemptions certificates issued in July 2014 were expired on December 31.