Islamabad 13 August: The Federal Board of Revenue (FBR) has tightened rules and warns of suspension for denying access to premises against sales taxpayers who refuse to grant access to their business premises for monitoring by tax officers.
Under the updated Sales Tax Rules 2006, any registered sales taxpayer who obstructs deputed tax officers from inspecting stocks, production, or clearances at manufacturing facilities faces the risk of immediate suspension or blacklisting of their registration for denying access to premises.
The revised regulations, issued under Section 21(2) of the Sales Tax Act, standardize the procedure for suspensions across Large Taxpayer Offices (LTOs) and Regional Tax Offices (RTOs) to ensure uniform enforcement.
According to the FBR, Commissioners now have the authority to suspend a taxpayer’s registration directly through the system without prior notice if there is credible evidence of fake invoicing, tax fraud, or other serious violations. The suspension will remain in effect until a detailed inquiry is completed.
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Key grounds for suspension include:
- Refusal to allow access to premises under Sections 40B and 40C.
- Failure to provide required records under Sections 25 and 37 of the Sales Tax Act.
- Business activity exceeding five times the declared capital and liabilities.
- Transactions involving more than 10% of purchases or supplies with other suspended persons above Rs. 50 million.
- Non-filing of sales tax returns for three consecutive months, or continuous null-filing for six months.
To promote transparency, the FBR will now hold public hearings before finalizing suspension or blacklisting decisions, giving taxpayers the opportunity to present their case.
The move is part of the government’s wider effort to plug revenue leakages, improve tax compliance, and deter fraudulent activities in Pakistan’s business sector. The FBR has urged all registered taxpayers to fully cooperate with Inland Revenue officers to avoid punitive action.
