PTA STRONGLY REJECTS THE PROPOSED AMENDMENTS IN SECTION 21 OF THE SALES TAX ACT, 1990 VIDE FINANCE BILL 2011-12

Karachi : 16th June, 2011

The Chairman, Pakistan Tanners’ Association, Mr.Khurshid Alam strongly rejected in a press Statement issued to the Media the Unjustified proposed amendments in Section 21 of the Sales Tax Act, 1990 vide Finance Bill 2011-2012.

Mr. Alam has also informed to the Media the amendments as proposed to be made by the Government of Pakistan in Finance Bill as under :-

“ During the period of suspension of registration, the invoices issued by such personal shall not be entertained for the purpose of sales tax refund of input tax credit, and once such person is blacklisted, the refund or input tax credit claimed against the invoices issued by him, whether prior or after such blacklisting shall be rejected through a self-speaking appealable order and after affording an opportunity of being heard to such person”.

The above proposed provision suggests that any registered person can be denied input tax claimed by him if his supplier is suspended/blacklisted even after a period of four to five years of making purchases. The proposed amendment is very harsh & arbitrary. No businessman can ensure that registration of his supplier is not suspended/blacklisted in future, say, five years after making the purposes. The amendment is anti-business and unconstitutional. It does not allow business to conduct their business activities smoothly & hassle free. The provision is like to result in extreme harassment to the taxpayers and will be a tool of blackmailing in the hands of tax department.

If a buyer has made purchases from a supplier or has used the material in further manufacturer/supply and has made payment to the supplier in a legal way and has also followed the Section 73 of the Sales Tax Act, the buyers shall not be held responsible for any wrong doing committed by his supplier. This shall be considered as final discharge of responsibility on the part of the buyer.

Mr. Khurshid Alam, Chairman, PTA articulated all the negative impacts to be brought out from the proposed amendments in the Finance Bill 2011-2012 and strongly condemned to avoid to incorporate the proposed amendments in the Sales Tax Act, 1990 vide Finance Bill 2011-2012.

The Chairman, PTA, Mr. Khurshid Alam also supported the appeal of All Chambers of Commerce & Industry in Pakistan appeared in today’s (16.06.2011) all prominent Daily Newspapers in Pakistan against the proposed Amendments.

Mr. Khurshid Alam, Chairman, Pakistan Tanners’ Association appeals to the Honourable President & Prime Minister of Pakistan for their immediate intervention into the matter of significant nature by directing to the Finance Ministry of Pakistan avoid to incorporate such proposed amendments in the next proposed Finance Bill 2011-2012, which would certainly be harmful for the Leather Industry of Pakistan too.