April 07, 2024 (MLN): To streamline and update procedures within the Federal Excise Act, certain amendments have been proposed for simplification and harmonization through the Finance Bill of 2024.
As per the amendments, a New Sub-Section (2A) in Section 4 is proposed that empowers the Deputy Commissioner to issue notice to individuals who have failed to submit their returns within fifteen days from the date of receiving the notice
The commissioner has the authority to specify a longer or shorter period, according to him whatever is necessary.
To note, the notices shall only be issued within five years, from the end of the financial year in which the return was to be filed.
Additionally, section 14 shall be substituted by the Best judgment Assessment, which allows the Deputy Commissioner to assess duty payable or refund due and also charge penalty and default surcharge in case an individual fails to furnish a return or fails to provide the Commissioner with necessary records.
In case the Commissioner assesses duty and recovery of duty not levied or short levied or erroneously refunded, then after issuing a show cause notice to the person shall pass an order to charge duty unpaid or short paid, disallow adjustment of duty or refund not admissible or to recover the amount of refund not due and shall also impose penalty and default surcharge
Furthermore, certain limitations have been proposed for assessment as per which show cause notices must be issued within five years from the end of the relevant financial year, and orders must be made within 120 days of the notice issuance.
Provided that any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or the time taken through adjournment by the registered person not exceeding sixty days shall be excluded from the computation of the period specified.
The expression “relevant date” means the date on which the payment of duty was due and in case where any amount of duty has been erroneously refunded, the date of its refund.
Moving forward, existing sections 14A, 14B, and 14C are renumbered as 14C, 14D, and 14E.
The renumbered section 14D pertains to Limitation for issuing orders in certain cases, stating that the provisions of section 124 of the Income Tax Ordinance, 2001 (XLIX of 2001) shall apply mutatis mutandis for issuing assessment or other orders consequential to decisions made by higher authorities.
The renumbered section 14E includes substituting "Deputy Commissioner" for "an officer of Inland Revenue" in certain sections.
Furthermore, changes are made to sections 32, 33, 34, 36, 37, 43, 45, and 46, which specify the powers and responsibilities of the Deputy Commissioner and other authorities, particularly in conducting audits and issuing notices to registered persons.
For the removal of doubt, it is declared that the powers of the Commissioner to direct the conduct of audit and to issue a notice under this sub-section are independent of the powers of the Board under section 42B and nothing contained in section 42B restricts the powers of the Commissioner to direct conduct of audit and to issue notice under this sub-section.
The Commissioner shall communicate the aforesaid reasons to the registered person whose audit is to be conducted through the notice
The amendments have further declared that the Commissioner shall not be and was never required to provide an opportunity of hearing and to pass any order before issuance of notice.
The reasons referred to shall be based on scrutiny by the Commissioner or any other Federal Excise authority, of the available records including sales tax and federal excise returns, invoices, income tax returns and withholding statements, financial statements and third party information.
In case the Commissioner has information showing that a registered person is involved in fraud or evasion of duty, he may authorize a Deputy Commissioner, to conduct audit at any time in a year.
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Posted on: 2024-04-07T17:04:00+05:00
