- Section 11E of the Sales Tax Act, 1990, has been amended to give the Federal Board of Revenue significant powers in tax enforcement.
- Effective from July 1, 2025, this change allows Inland Revenue officers to recover unlawful refunds and underpaid sales tax.
- Officers can initiate recovery on suspicion with audit or credible basis, issuing show cause notices and recovery orders with penalties.
- Section 11E is now the primary tool for addressing refund-related irregularities, excluding cases under Section 37A.
- Legal experts view the law as harsh, with increased discretion and burden of proof on businesses.
- Businesses and exporters are on alert as the FBR aims to meet revenue targets with enhanced powers.
- The impact on tax compliance and potential legal challenges is uncertain, but the enforcement landscape has shifted.
Source: pkrevenue.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
