1. Income Tax Bar Association Karachi WORKSHOP ON SALES TAX Pearl Continental Hotel, Karachi 15 – 16 July 2005

2. Income Tax Bar Association Karachi Workshop on Sales Tax Pearl Continental 15-16 July 2005 2 PENALTIES & ADDITIONAL TAX By MOHAMMAD ALI Consultant Qaiser Mufti Associates

3. Income Tax Bar Association Karachi Workshop on Sales Tax Pearl Continental 15-16 July 2005 3 PENALTIES & ADDITIONAL TAX  Penalties  Additional tax

4. Income Tax Bar Association Karachi Workshop on Sales Tax Pearl Continental 15-16 July 2005 4 PENALTIES & ADDITIONAL TAX Penalties  Non furnishing a return within the due date  Non issuance an invoice when required  Un-authorized issuance an invoice in which an amount of tax is specified  Failure to notify material nature changes in the particulars of registration  Failure to deposit the amount of tax due or any part thereof in the time or manner laid down under the Act  Repetition of erroneous calculation in the return during a year whereby amount of tax less than the actual tax due is paid

5. Income Tax Bar Association Karachi Workshop on Sales Tax Pearl Continental 15-16 July 2005 5 PENALTIES & ADDITIONAL TAX Penalties  Failure to make application for registration  Failure to maintain records as required  Non compliance with the provisions of section 25  Failure to furnish the information required under sub-section (5) of section 26  Whosoever commits, causes to commit or attempts to commit the tax fraud  Violation of embargo placed on removal of goods  Obstruction of the authorized officer in the performance of his official duties

6. Income Tax Bar Association Karachi Workshop on Sales Tax Pearl Continental 15-16 July 2005 6 PENALTIES & ADDITIONAL TAX Penalties  Non compliance of section 73 of the Act  Failure to fulfill any of the conditions, limitations or restrictions prescribed  Contravention of the provisions of this Act for which no penalty has, specifically, been provided  Where any officer of Sales Tax authorized to act under this Act, acts or omits or attempts to act or omit in a manner causing loss to the sales tax revenue or otherwise abets or connives in any such act

7. Income Tax Bar Association Karachi Workshop on Sales Tax Pearl Continental 15-16 July 2005 7 PENALTIES & ADDITIONAL TAX Additional Tax  If a registered person does not pay the tax due or any part thereof, whether wilfully or otherwise, in time or in the manner specified under this Act, rules or notifications issued thereunder or claims a tax credit, refund or makes an adjustment which is not admissible to him, or incorrectly applies the rate of zero per cent to supplies made by him, he shall, in addition to the tax due, pay default surcharge.

8. Income Tax Bar Association Karachi Workshop on Sales Tax Pearl Continental 15-16 July 2005 8 PENALTIES & ADDITIONAL TAX Additional Tax For the first six months of default = @ 1.5% per month of the amount of tax due or the amount of refund erroneously made From 7 th months onwards = @ 1.5% per month of the amount of tax due or the amount of refund erroneously made In case default is on account of tax fraud= @ 2% per month of the amount of tax evaded or the amount of refund fraudulently claimed, till such time the entire liability including the amount of default discharge is paid