SRB rejects PCSIR appeal in tax concealment

K3ARACHI: The Sindh Revenue Board (SRB) has rejected the appeal of Pakistan Council of Scientific and Industrial Research (PCSIR) Laboratory in tax evasion and concealment case and directed the laboratory to register itself with the provincial tax authorities.

In an order passed by Commissioner Appeals, SRB this week stated that the laboratory had deducted sales tax on services provided to National Foods Limited and Habib Metropolitan Bank Limited but the same was not deposited to the provincial kitty.

SRB sources said the payable amount by the lab was nominal, but it was evasion on the part of a unit falling under the federal government.

The PCSIR Laboratory had filed the appeal before the commission against the Order in Original (ONO) issued by SRB Unit-18 for the recovery of payable amount and directing compulsory registration with the provincial tax authority.

The laboratory had a plea that it was a federal government unit and was functioning under the control of the Ministry of Science and Technology. “The activity of the lab is restricted to scientific research and it enjoys exemption under the Constitution of Pakistan,” the lab contended.

The commissioner appeal in its order said the appellant could not hold the tax. The order also pointed out that the deducted amount was not shown in books of accounts of the lab.

Regarding the registration of the lab, the commissioner appeal observed the appellant was providing industrial services and was competing with other labs for raising funds.

The commissioner concluded that the lab was covered under the heading of services taxable under Sindh Sales Tax on Services Act, 2011 other than services relating to pathological or diagnostic tests of patients, which were exempted from the tax.

The lab has been directed to file true and correct returns and provide the records in order to assess the taxable services.