ISLAMABAD: Federal Board of Revenue field formations Lahore, Multan and Karachi adjusted tax amount of Rs2266 million on wrong claimed adjustment of input tax by four companies, without fulfilling the conditions of law.
According to the details, Federal Board of Revenue took the serious notice of this irregularity and directed to the field formations for expeditious recovery through adjudication proceedings and fix the responsibility against involved in malpractice. FBR also directed to improve the monitoring process of input tax adjustment.
M/S Total Parco marketing limited ( NTN 0786904-5) registered with Large Taxpayer Unit Karachi adjusted input tax credit on the basis of purchase invoices of petroleum products issued to them. This resulted in inadmissible adjustment of input tax of Rs2,170.86 million.
Likewise M/s Haleeb Foods Limited (NTN 1207069-6) registered with Large Taxpayer Unit Lahore adjusted input tax paid on the goods such as vehicles, petroleum products, parts of vehicle, entertainments, wire and cable which was not admissible under the law. This resulted in inadmissible adjustment of input tax of Rs76.45 million.
M/s Ghani Packages (NTN 1202083-4) registered regional tax office Multan claimed input tax adjustment credit against certain invoices. The registered person was involved in production of paper cone and, the raw material for production of paper cone was paper board which ranges average rate between Rs. 30 to Rs.40 per kilogram but the registered person claimed input tax in which the average purchase rate ranges between Rs75 to Rs110 per kilogram.
On the other hand, the supplies made by the registered person also remained below the price from the purchase price meaning, thereby, the raw material purchased was not relevant to the end product produced by the registered person.
There was no relevancy with the raw material purchased and with the end product produced and supplied, the registered person overstated the input tax just to adjust against the output tax as evident from the tax profile of the taxpayer as no tax paid during the last three years which showed that the only paper transactions and actual movement of goods did not take place between the suppliers and the buyer . This resulted in inadmissible adjustment of input tax credit of Rs25.846 million.