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Influential businesses use ‘pressure’ tactics to tame PRA

Influential businesses use ‘pressure’ tactics to tame PRA

LAHORE: The Punjab Revenue Authority has so far been unable to bring at least nine major sectors into Sales Tax net as its officials face pressure from ‘political’ as well as other influential quarters in taking action against those flouting the Punjab Sales Tax on Services Act 2012.

Those defying PRA include property developers and dealers, construction companies, travel agents and tour operators, car dealers, passengers and goods transport companies, cable TV operators, airlines and auto workshops.

Sources in the PRA told Dawn on Tuesday that real estate developers and property dealers appeared to be major opponents of the tax and the authority was facing political pressure while dealing with them.

The sources said the authority had served notices on the estate developers like Defence Housing Authority (DHA), Eden, Paragon, Lake City and Bahria Town housing societies, besides constructors like Frontier Works Organisation (FWO), National Logistics Cell (NLC) and Sheranwala builders.

They said the authority’s proposal to withdraw tax exemption allowed to the construction companies working on public sector projects failed to convince the federal government because some powerful politicians were associated with the business.

They said after the protests lodged by DHA property dealers, a federal minister called the PRA chairperson a month ago, asking him to spare them from 16 percent ST.

Similarly, they said, in passengers and goods transport category, only Daewoo company got registered with the PRA for tax, while other private transport owners were resisting the tax and trying to influence the authority.

The property dealers and goods transport owners have been staging rallies and demonstrations against 16pc tax for the last few months.

However, a Punjab government official said the PRA must act lawfully by summoning the property developers for personal hearings and also write to the authorities concerned to bring them into tax net.

LITIGATION: The PRA has been facing litigation by 15 restaurants and banquet halls, two fashion designers and a beauty salon since May 2015.

An official said these businesses had moved the courts against sealing of their premises for nonpayment of tax while some of them had also challenged the tax on certain grounds.

He said the courts had ruled in favour of the PRA in majority of cases and directed the authority to receive the due amounts from the tax evaders.

He said majority of restaurants and banquet hall owners pleaded in the court that their businesses didn’t fall under the ST ambit, but their cases appeared to be weak.

The official said in case of fashion designers, the court had directed the petitioners to give an undertaking to the PRA that they would appear for a hearing within three days.

The official added that the beauty salon took the plea that it didn’t have National Tax Number (NTN) and thus be allowed to register with the Federal Board of Revenue.

Published in Dawn, September 9th, 2015

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