Railways gets notice for Rs46.9m tax evasion

LAHORE

Punjab Revenue Authority (PRA) has issued a show cause notice to Pakistan railways on Rs 46.92 million sales tax on services evasion during the tax year July 2015 to January 2017. 

According to the notice, a copy of the notice is available with The News, the intercity carriage of goods by rail services are chargeable to sales tax under the Punjab Sales Tax on Services Act 2012, while the railways has provided taxable services attracting Punjab sales tax amount of Rs 46.924 million which was not declared to the Punjab Revenue Authority nor deposited to the provincial exchequer.

The notice stated that the Pakistan railways provided the taxable services to M/s Fauji Fertilizer Company and M/s Engro Fertilizer Limited. The Pakistan railways has neither paid any amount to the Punjab Revenue Authority nor filed any sale tax returns during the tax period while the Pakistan railways is bound to file monthly sales tax returns along with deposit of the due amounts of the Punjab sales tax on taxable services under section 3, 10 ,11, 18, and 25 of Punjab sales tax act 2012.

The Pakistan railways has provided Rs 124.047 undeclared value of taxable services to the Fauji Fertilizer Company Ltd and Rs 169.229 million undeclared value of taxable services to Engro Fertilizers Ltd against which Rs 19.847 million and Rs 27.076 million taxes, respectively are owed by the Pakistan railways.

The show cause stated the tax evasion was intention and committing the tax fraud defined in the Punjab sales tax act 2012 and liable for penalties and imprisonment of directors’ up to 5 years upon the conviction.

The PRA has summoned the Pakistan railways to appear to the official concerned of the Authority on March 13 2017.

A PRA official said that so far no tax was paid by the Pakistan railways while they have using the tactics for further delay.He said if the Pakistan railways delayed the dues further after lapse of the period given in the Act, then further proceedings will initiate.

However, he was of the view that the railways will pay the dues to the PRA as its legal department has approached the authority.

Quoting example of Sahiwal Coal Power Plant, he said that those who withheld the taxes while acquires services of good transport from the railways are regularly submitting it to the provincial exchequer, so the Sahiwal Coal Power Plant is regularly depositing million of rupees sales taxes on services to the Punjab Revenue Authority as it withheld the Punjab sales tax on services from the Pakistan railways dues.

An official of the railways said that they were perusing the matter with the official concerned of the finance department and others. He hoped the issue will be settled soon.

academy: Punjab Revenue Authority Chairman Dr Raheel Ahmed Siddique said the authority will establish state of the art training academy for capacity building and training of its staff. 

According to a handout issued on Monday, the chairman said the PRA is focusing upon the capacity building of its officers especially in the wake of the recruitment of new officers.

It has principally decided to establish a state of the art training academy for which April 07, 2017 has been set as the target date. This will be the first of its kind academy equipped with the Virtual Learning Environment (VLE). It will also provide online training saving time and money.

Initially all the courses are planned to be indigenously held and as per need can be outsourced to institutions like LUMS and IBA etc at some advanced stage. He resolved to enhance the professional capacity of the officers working in Punjab Revenue Authority and to provide training to newly recruited officers.