The Large Taxpayer Unit (LTU), Islamabad has been instructed by Directorate General of Intelligence and Investigation Inland Revenue ( DG I&I IR ) to recover sales tax that amounts up to Rs. 235.26 million from a telecom organization which failed to deduce taxes in spite of being the withholding agent.
The DG I&I IR selects a major sector for audit and compliance every year and is currently focusing on the telecom sector in order to improve revenue collection and compliance during 2012-2013 after auditing the National Savings Centers and Pakistan Post in the past.
During its investigation of the sector, the Directorate General of Intelligence and Investigation Inland Revenue (DG I&I IR) inspected the returns available in Integrated Tax Management System (ITMS) relating to the company and detected inconsistencies. After proper analysis of the electronically filed sales tax returns for the tax period of January 2010 to December 2010, the DG I&I IR found that the company had received advertising services from various service providers worth Rs1.47 billion upon which the sales tax liable to be withheld comes to be Rs 235.26 million. The registered person was issued notification and a call for explanation but instead the taxpayer asked for adjournment and no explanation was offered even after a lapse of almost two months.