- The Federal Board of Revenue (FBR) clarified Section 37A of the Sales Tax Act, 2025, to address concerns from Pakistan’s business community.
- The FBR issued Sales Tax Circular No. 2 of 2025-26 to explain misunderstandings about Section 37A.
- Section 37A aims to deter sales tax fraud, not to recover revenue.
- Officers need solid evidence and approval from the Commissioner to initiate inquiries.
- Arrest powers are controlled and require approval from a high-powered committee.
- Arrests are only for frauds over Rs50 million and specific categories like fake invoices.
- Preconditions for arrest include risk of evidence tampering, absconding, or ignoring notices.
- Offences can be compounded if tax, surcharge, and penalty are paid in full.
- The FBR will issue a Sales Tax General Order with detailed procedures.
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.
