Law: Sales Tax Act, 1990

Section: 2(14),7(1),10

Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2(3)

Sales Tax Act (VII of 1990)--- ----Ss. 2(14), 7(1) & 10---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Refund claim---Complainant filed refund claim under S.10 of Sales Tax Act, 1990 duly supported by complete copies of invoice of paid challans---Department deferred said claim without giving any cogent justification---Federal Board of Revenue, had failed to work out appropriate "modus operandi" for input tax adjustment in respect of Provincial Sales Tax on services collected by the service providers, assessed with Sindh Revenue Board which had led to inordinate delay, neglect, inattention, incompetence and inefficiency in the discharge of duties and responsibilities on the part of Federal Board of Revenue, which being a systemic issue needed to be addressed on priority basis---Inordinate delay on the part of Federal Board of Revenue to devise modalities for setting Sales Tax adjustment claims of the taxpayers, was tantamount to maladministration in terms of S.2(3) of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000---Federal Board of Revenue was recommended, to provide database linkage as mutually agreed between Sindh Revenue Board and Federal Board of Revenue as to resolve the systemic issue; to direct the Chief Commissioner to process and settle the complainant's claims, as per law and report compliance within 30 days. FINDINGS/RECOMMENDATIONS DR. MUHAMMAD SHOAIB SUDDLE, (FEDERAL TAX OMBUDSMAN). This complaint of maladministration is against the Department for their failure to settle sales tax refund claims for tax period from July, 2011 to September, 2012 filed on account of input adjustment under section 7(1) read with section 2(14) of the Sales Tax Act, 1990 (the Act). 2. According to the AR, Messrs Engro Vopak deducted provincial sales tax on services rendered to the complainant. The deduction amounting to Rs.221,402,055 for the period from July 2011 to September, 2012 was made under section 26 of Sindh Sales Tax on Services Act, 2011 (SSTS Act). The complainant filed refund claim under Section 10 of the Act, duly supported with complete copies of invoices of paid challans. The Department however…

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