ISLAMABAD – Federal Board of Revenue (FBR) has moved to crack down on registered businesses that fail to connect with the electronic monitoring system, with authorities empowered to seal non-compliant business premises under newly amended Sales Tax Rules.
FBR has issued a notification introducing further amendments to the Sales Tax Rules, making the installation of production monitoring, video surveillance or Digital Eye systems mandatory for businesses covered by the rules.
Under the new framework, registered businesses that fail to connect their required monitoring systems with the FBR’s system could face sealing of their premises. The authorities may also seek police assistance if required to enforce the sealing order.
The notification lays down a formal procedure for taking action against businesses that remain disconnected from the FBR monitoring system.
The process begins with a written report from an Assistant Commissioner Inland Revenue or an officer of higher rank to the Commissioner Inland Revenue. The Commissioner can initiate proceedings on the basis of the report and, after conducting an inquiry, will forward a report to the Chief Commissioner.
Chief Commissioner will then issue a written order either to seal the business premises or not to seal them. The authorities may seal the entire business premises or only a specific portion of it. Before the premises are sealed, the business operator must be provided with a copy of the sealing order.
Once sealed, the business premises will remain closed until the monitoring system is connected to the FBR’s system. To get a sealed business reopened, the operator will have to pay the prescribed penalty and install the required monitoring system. An FBR technical team will be present during installation of the system.
After installation and connection of the monitoring system, the Commissioner will issue a certificate within three days, according to the notification.
FBR has also kept the door open for a wider crackdown, with the notification stating that the electronic monitoring rules may subsequently be extended to additional businesses and manufacturers.
The latest amendments put registered businesses under stricter compliance regime, with failure to connect the required monitoring system potentially leading to sealing of the business premises.
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