Islamabad, Aug 25: State-owned firms are obligated by the Federal Board of Revenue (FBR) to utilize alternate dispute resolution committees (ADRCs) to settle any tax-related problems with the FBR. An SRO.1290 (l) 2024 was released by the FBR on Saturday to alter the Income Tax Rules of 2002.
The definition of “State-owned enterprise” under the amended ADRC regulations is the same as it is in the State-Owned Enterprises (Governance and Operations) Act, 2023. This provision will apply to any dispute involving a state-owned firm, regardless of the amount of tax due. If the state-owned enterprise feels that it has been wronged, it must appeal to the Board for the appointment of a Committee.
Any individual or group of individuals, including a state-owned business, wishing to resolve a dispute must submit a formal application for alternative dispute resolution to the Board. According to the eligibility requirements outlined in Part II of the Schedule to this rule, the Board will notify a panel made up of officers of the Land Revenue Service retired in BS-21 and above, chartered accountants, cost and management accountants, advocates, and reputable businessmen. The panel will also include advocates with at least ten years of experience in the field of taxation.
The Committee member is responsible for supporting the Committee’s secretariat.After determining the matter, the Committee may seek additional information, data, or expert opinion, or it may conduct or order the conduct of any audits or inquiries it sees fit and for reasons to be documented in writing, will resolve the disagreement by majority vote within 45 days of its appointment, with the possibility of an additional 15 days.
When the applicant, satisfied with the decision, withdraws their appeal that is still pending before a court of law or other appellate authority using the form provided in Part III of the Schedule to this rule and notifies the Commissioner of the withdrawal order, the Committee’s decision will be legally binding on the Commissioner, with the caveat that the Committee’s judgment will not be legally binding on the aggrieved party if the order of withdrawal is not delivered to the Commissioner within sixty days of the decision being served to them.
The applicant will pay income tax and other taxes as determined by the Committee under this regulation upon receipt of the Committee’s decision, and all decisions and orders made or passed will be adjusted accordingly. According to FBR, appointed members of the Committee would receive a lump sum, one-time payment of Rs. 100,000 apiece for their efforts, contingent upon the Committee’s decision on the application.
