Tax disputes settlement: FBR binds SOEs to move dispute resolution committees

ISLAMABAD: The Federal Board of Revenue (FBR) has issued the amended income tax rules binding the state-owned enterprises (SOEs) to approach Alternative Dispute Resolution Committees (ADRCs) for settling tax disputes irrespective of the amount of tax liability.

The Board issued a Statutory Regulatory Order (SRO) on Friday.

In the case of a state-owned enterprise, this rule shall apply to any dispute irrespective of the amount of liability of tax mentioned in clause (a) of sub-section (l) of section 134A, and it is mandatory for the state-owned enterprise to apply to the Board for appointment of a Committee if it is aggrieved.

Any person or class of persons, including a state-owned enterprise seeking resolution of any dispute under section 134,4, shall submit a written application for the alternative dispute resolution to the Board in the Form as set out in Part I of the Schedule to this rule.

The application submitted under sub-rule (4) shall be accompanied by (a) an initial proposition for resolution of the dispute as set out in Part IAI (b) an offer of tax payment as set out in Part IB; (c) an undertaking as set out in Part IC that the applicant shall accept the decision of the Committee which shall be binding on him in all respects and that he shall on receipt of the decision immediately withdraw any pending litigation or cases of any kind in respect of the dispute mentioning details thereof; and (d) in the case of a state-owned enterprise, it shall withdraw any such pending litigation and cases immediately which shall be mentioned in the undertaking submitted under clause (c) of this sub-rule.

The Board shall notify a panel comprising officers of lnland Revenue Service retired in BS-21 and above, chartered accountants, cost and management accountants, advocates, having a minimum of ten years’ experience in the field of taxation and reputable businessmen, by eligibility criteria specified in Part II of the Schedule to this rule.

The member of the committee mentioned in clause (ii) of sub-section (3) of section l34A of the Ordinance shall provide secretariat support to the committee.

The committee may determine the issue and may thereafter seek further information or data or expert opinion or make or cause to be made such inquiries or audit as it may deem fit, and shall decide the dispute by majority, within forty-five days of its appointment, extendable by another fifteen days, for reasons to be recorded in writing.

The decision of the Committee under sub-rule (8) shall be binding on the Commissioner when the applicant; being satisfied with the decision, has withdrawn the appeal pending before the court of law or any appellate authority in the form as set out in Part III of the Schedule to this rule and has communicated the order of the withdrawal to the Commissioner: Provided that if the order of the withdrawal is not communicated to the Commissioner within sixty days of the service of decision of the Committee upon the aggrieved person. The decision of the Committee shall not be binding on the Commissioner.

On receipt of the committee’s decision the applicant shall make the payment of income tax and other taxes as decided by the Committee under this rule and all decisions and orders made or passed shall stand modified to that extent.

The committee members appointed under clauses (i) and (ii) of sub-section (3) of section 134A of the Ordinance shall on decision of the application by the Committee be paid a lump sum one-time remuneration of one hundred thousand rupees each for their services. The remuneration specified in sub-rule shall be paid by the Board from its budget allocation within fifteen days of the receipt of the decision of the Committee.