The Punjab Sales Tax on Services Act 2012.Doc

8/11/2019 The Punjab Sales Tax on Services Act 2012.Doc

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THE PUNJAB SALES TAX ON SERVICES ACT, 2012(XLII of 2012)

CONTENTS

1. Short tit!, !"t!#t $#% &o''!#&!'!#t2. !fi#itio#*. T$"$+! !ri&!-. Ai&$tio# of ri#&i! of ori/i# $#% r!!r! &h$r/! i# &!rt$i#

it$tio#. A'!#%'!#t i# S!&o#% S&h!%!. E&o#o'i& $&tiit34. V$! of $ t$"$+! !ri&!5. O!# '$r6!t ri&!7. Proiio# of !ri&! o!r $ !rio% of ti'!

10. S&o! of t$" $#% $i!% '$tt!r11. P!ro# i$+! to $3 t$"12. E"!'tio#1*. Eff!&t of &h$#/! i# th! r$t! of t$"1-. S!&i$ ro&!%r! $#% t$" 8ithho%i#/ roiio#1. !!/$tio# of o8!r to &o!&t, $%'i#it!r $#% !#for&! t$" o# &!rt$i#

!ri&!1. A%9t'!#t14. Co!&tio# of !"&! t$"15. Ti'!, '$##!r $#% 'o%! of $3'!#t17. Joi#t $#% !!r$ i$+iit3 of r!/it!r!% !ro# 8h!r! t$" #$i%

20. S$! of t$"$+! $&tiit3 or tr$#f!r of o8#!rhi21. Et$t! of %!&!$!% !ro#22. Et$t! i# +$#6rt&32*. Li$+iit3 for $3'!#t of t$" i# &$! of ri$t! &o'$#i! or +i#!

!#t!rri!2-. A!'!#t of t$"2. R!/itr$tio#2. Vo#t$r3 r!/itr$tio#24. Co'or3 r!/itr$tio#25. S!#io# of r!/itr$tio#27. !:r!/itr$tio#*0. I$#&! of t$" i#oi&!*1. R!&or%*2. R!t!#tio# $#% ro%&tio# of r!&or% $#% %o&'!#t**. A%it ro&!!%i#/*-. S!&i$ $%it +3 &h$rt!r!% $&&o#t$#t or &ot $&&o#t$#t*. R!tr#*. S!&i$ r!tr#*4. ;i#$ r!tr#*5. R!tr# %!!'!% to h$! +!!# '$%!*7. Aoi#t'!#t of $thoriti!

-0. Po8!r-1. itri+tio# of o8!r


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-2. S!&i$ J%/!-*. Co/#i

r!&or%

4. O+i/$tio# to ro%&! %o&'!#t $#% roi%! i#for'$tio#5. S!$r&h! #%!r 8$rr$#t7. Poti#/ of $# offi&!r to +i#! r!'i!0. Po8!r of $%9%i&$tio#1. R!iio# +3 th! Co''iio#!r2. R!iio# +3 th! Athorit3*. A!$-. Pro&!%r! i# $!$. !&iio# i# $!$. A!$ to th! A!$t! Tri+#$4. io$ of $!$ +3 th! A!$t! Tri+#$5. !oit of th! t$" %!'$#% 8hi! $!$ i !#%i#/7. At!r#$t! %it! r!otio#40. R!&o!r3 of $rr!$r of t$"41. A/!#t42. Li$+iit3 $#% o+i/$tio# of $/!#t4*. Li$+iit3 of th! r!/it!r!% !ro# for th! $&t of hi $/!#t4-. A!$r$#&! +3 $thori

45. S!ri&! of or%!r $#% %!&iio#47. Corr!&tio# of &!ri&$ !rror50. I$#&! of %i&$t! of th! t$" %o&'!#t51. Po8!r to i! or%!r, i#tr&tio# $#% %ir!&tio#52. Offi&!r of th! Athorit3 to foo8 or%!r5*. Co't$tio# of i'it$tio# !rio%5-. Co#%o#$tio# of ti'!:i'it5. B$r of it, ro!&tio# $#% oth!r !/$ ro&!!%i#/5. R!'o$ of %iffi&ti!54. R!!$ $#% $i#/

;IRST SCHEULE

SECON SCHEULE


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TEXT

THE PUNJAB SALES TAX ON SERVICES ACT, 2012(XLII of 2012)

[27thJune, 2012]

A#A&t

to provide for the levy of a tax on services provided, rendered, initiated, received,originated, executed or consumed in the Punja!

Pr!$'+!. Whereas it is expedient to provide for the levy of a tax onservices provided, rendered, initiated, originated, executed,received or consumed inthe Punjab and to deal with ancillary matters;

It is enacted as follows

CHAPTER IPRELI=INAR>

1. Short tit!, !"t!#t $#% &o''!#&!'!#t. !"# $his %ct may be cited as thePunjab &ales $ax on &ervices %ct '("'.

!'# It shall extend to the whole of the Punjab.

!)# $his %ct shall come into force on and from such date as the*overnment may, by a notification in the official *a+ette, specify.

!# -otwithstanding subsection !)#, the *overnment may, by notificationin the official *a+ette, specify services or class or classes of services in respect ofwhich tax shall be collected and paid with effect from the date subse/uent to anddifferent from the date of the commencement of this %ct.

2. !fi#itio#. In this %ct

!"# 0%ppellate $ribunal1 means the %ppellate $ribunal established underany law and notified by the *overnment as the %ppellate $ribunal forpurposes of the %ct;

"2# 0arrears1, in relation to a person, shall mean, on any day, the tax due

and payable by the person under the %ct or the rules before that daybut which has not yet been paid;

"$# 0%ssistant 2ommissioner1means a person appointed as an %ssistant2ommissioner of the %uthority;

"%# 0associates1or 0associated persons1refer to

!a# two persons, where the relationship between them is such thatone may reasonably be expected to act in accordance with theintentions of the other, or both persons may reasonably beexpected to act in accordance with the intentions of a thirdperson but two persons shall not be associates solely by reasonof the fact that one person is an employee of the other or bothpersons are employees of a third person;


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!b# without prejudice to the generality of paragraph !a# and subjectto paragraph !c#, the following persons shall always be treatedas associates

!i# an individual and a relative of that individual;

!ii# members of an association of persons;!iii# a member of an association of persons and the

association, where the member, either alone or togetherwith an associate or associates under another applicationof this section controls fifty per centor more of the rightsto income or capital of the association;

!iv# a shareholder in a company and the company, where theshareholder, either alone or together with an associate orassociates under another application of this section,controls either directly or through one or more interposed

persons

a. fifty per cent or more of the voting power in thecompany;

b. fiftyper cent or more of the rights to dividends; or

c. fiftyper cent or more of the rights to capital; and

!v# two companies, where a person, either alone or togetherwith an associate or associates under another applicationof this section, controls either directly or through one ormore interposed persons

a. fifty per cent or more of the voting power in bothcompanies;

b. fifty per cent or more of the rights to dividends inboth companies;

c. fifty percent or more of the rights to capital in bothcompanies; and

!c# two persons shall not be associates under subparagraph !i# or!ii# of paragraph !b# where the 2ommissioner is satisfied thatneither person may reasonably be expected to act in

accordance with the intentions of the other.E"$#$tio#.: $he expression 3relative in relation to an individual4

means

!i# an ancestor, a descendant of any of the grandparents, oran adopted child of the individual or of a spouse of theindividual; or

!ii# a spouse of the individual or of any person specified at !i#;

!5# 0association of persons1includes a firm, any artificial or juridical personand body of persons formed under a foreign law, but does not include a

company;


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!6# 0%uthority1 means Punjab 7evenue %uthority established under anylaw;

!8# 0ban9ing company1 means a ban9ing company as defined in the:an9ing 2ompanies rdinance, "


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!"


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!))# 0registered person1 means a person who is registered or is liable to beregistered under the %ct but the person liable to be registered and hasnot registered shall not be entitled to any benefit available to aregistered person under any of the provisions of the %ct or the rules;

!)# 0return1 means any return re/uired to be furnished under 2hapter ?I ofthe %ct;

!)5# 0resident1 means

!a# an individual who, in a financial year, has

!i# a place of business, whole or part thereof, in the Punjabin any mode, style or manner; or

!ii# his permanent address, as listed in the individual4snational identity card, in the Punjab; or

!iii# a permanent representative to act on his behalf or to

provide service on his behalf in the Punjab!!b# an association of persons or a company which, in a financial

year, has

!i# its registered office in the Punjab; or

!ii# its place of business,whole or part thereof, in the Punjabin any mode, style or manner;

!iii# a permanent representative to act on its behalf or toprovide service on its behalf in the Punjab; or

!iv# the control or management of the affairs of the

association of persons is situated in the Punjab at anytime during the financial year;

!)6# 0rules1 means the rules made under the %ct;

!)8# 0&chedule1 means a &chedule appended to the %ct;

!)=# 0service1 or 0services1 means anything which is not goods or providingof which is not a supply of goods and shall include but not limited to theservices listed in @irst &chedule;

E"$#$tio# % service shall remain and continue to be treated asservice regardless whether or not rendering thereof involves any use,

supply or consumption of any goods either as an essential or as anincidental aspect of such rendering;

!)


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!a# the tax, additional tax, or default surcharge levied under the %ct;

!b# a fine, penalty or fee imposed or charged under the %ct; and

!c# any other sum payable or recoverableunder the %ct or rules;

!)# 0tax fraud1 means 9nowingly, dishonestly or fraudulently and without

any lawful excuse

!a# doing of any act or causing to do any act; or

!b# omitting to ta9e any action or causing the omission of anyaction, including providing of taxable services without beingregistered under the %ct; or

!c# falsifying or causing falsification of tax invoices or other taxdocuments or records; or

!d# acting in contravention of the duties or obligations imposedunder the %ct or rules or instructions issued thereunder

with the intention of understating or suppressing the tax liability orunderpaying the tax liability;

!# 0tax period1 means a period of one month or such other period as the%uthority may, by notification in the official *a+ette, specify;

!5# 0taxable service1 shall have the meaning as given to it in section ); and

!6# 0value of a taxable service1 shall have the meaning as given to it insection 8.

*. T$"$+! !ri&!. !"# &ubject to such exclusion as mentioned in &econd

&chedule, a taxable service is a service listed in &econd &chedule, which is providedby a person from his office or place of business in the Punjab in the course of aneconomic activity, including the commencement or termination of the activity.

E"$#$tio# $his subsection deals with services provided by a personregardless whether such services are provided to a resident person or a nonresident person!

!'# If a service listed in &econd &chedule is provided to a resident personby a nonresident person in the course of an economic activity, including thecommencement or termination of the activity, it shall be treated as a taxable service.

E"$#$tio# $his subsection deals with services provided by a nonresident

person to a resident person whether or not the end consumers, if any, of suchservices are identifiable for purposes of this %ct or the rules.

!)# @or purposes of subsection !'#, where a person has a registered officeor place of business in the Punjab and another outside the Punjab, the registeredoffice or place of business in the Punjab and that outside the Punjab shall be treatedas separate legal persons.

!# $he %uthority may, with prior approval of the *overnment, bynotification in the official *a+ette, prescribe rules for determining the conditionsunder which a particular service or class of service shall be considered to have beenprovided by a person from his registered office or place of business in the Punjab.


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!5# @or purposes of this %ct and the rules, providing of service shall,where the context so re/uires, include rendering, supply, initiation, origination,execution, reception, consumption or termination of a service whether in whole or inpart.

-. Ai&$tio# of ri#&i! of ori/i# $#% r!!r! &h$r/! i# &!rt$i#it$tio#. !"# Where a person is providing taxable services in a Province otherthan the Punjab but the recipient of such services is resident of the Punjab or isotherwise availing such services in the Punjab and has charged tax accordingly, theperson providing such services shall pay the amount of tax so charged to the*overnment.

!'# Where the recipient of a taxable service is a person registered underthe %ct, he shall deduct the whole amount of tax in respect of the service receivedand pay the same with the *overnment.

!)# Where a person is providing taxable services in more than oneProvince or territory in Pa9istan including the Punjab, such person shall be liable topay tax to the *overnment to the extent the tax is charged from a person resident inthe Punjab or from a person who is otherwise availing such services in the Punjab.

!# Where rendering of a taxable service originates from the Punjab butterminates outside Pa9istan, such person shall be re/uired to pay tax on suchservice to the *overnment.

!5# Where a taxable service originates from outside Pa9istan but isreceived or terminates in the Punjab, the recipient of such service shall be liable topay the tax to the *overnment.

!6# $he persons who are re/uired to pay the tax to the *overnment in

terms of subsections !"#, !'#, !)#, !# and !5# shall be liable to registration forpurposes of this %ct and the rules.

!8# %ll /uestions or disputes relating to the application of the principle oforigin given in this section shall be resolved in terms of the already recordedunderstanding between the @ederal *overnment and the Provincial *overnments onthe implementation of reformed *eneral &ales $ax provided that pendency of anysuch /uestion or dispute shall not absolve the concerned person from his obligationto deposit the tax.

!=# $he provisions of this section shall apply notwithstanding any otherprovision of this %ct or the rules and the *overnment may specify special procedure

to regulate the provisions of this section.

. A'!#%'!#t i# S!&o#% S&h!%!. !"# $he *overnment may, by notificationin the official *a+ette, ma9e an amendment in &econd &chedule by modifying,adding or deleting any entry or entries with reference to the classification, if any,description of any service or class of services and the rate or rates of tax chargeableon any service or class of services not exceeding the maximum rate prescribed in&econd &chedule.

!'# % notification issued under subsection !"# shall be effective from suchdate as may be specified in the notification but such date shall not be prior to thedate on which the notification is published in the official *a+ette.


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!)# $he *overnment shall at the time of presenting the %nnual :udget&tatement for the next financial year, lay before the Provincial %ssembly of thePunjab all the notifications relating to the amendments in the &econd &cheduleduring the current financial year.

. E&o#o'i& $&tiit3.!"# %n economic activity means any activity carried onwhether continuously, regularly or otherwise by a person that involves or is intendedto involve the provision of services to another person and includes

!a# an activity carried on in the form of a business, including a profession,calling, trade, or underta9ing of any 9ind, whether or not the activity isunderta9en for any consideration or profit;

!b# the supply of movable property by way of lease, license or suchsimilararrangement; and

!c# a onetime transaction or concern in the nature of a business ortrade.

!'# %nything done or underta9en during the commencement or terminationof an economic activity shall be construed as part of the economic activity.

!)# %n economic activity does not include

!a# the activities of an employee providing services in that capacityto an employer; or

!b# a private recreational pursuit or hobby of an individual.

4. V$! of $ t$"$+! !ri&!. !"# $he value of a taxable service is theconsideration !by whatever name called such as charges or price# in moneyincluding all the @ederal and the Provincial duties, taxes or charges, if any, which theperson providing a service receives from the recipient of the service but does notinclude the amount of the tax.

!'# In case the consideration for a service is in 9ind or is partly in 9ind andpartly in money, the value of the service shall mean the open mar9et price of theservice as determined under section 6 excluding the amount of the tax.

!)# In case the person whoprovides the service and the recipient of theservice are associated persons and the service is supplied for no consideration or fora consideration which is lower than the price at which the person provides theservice to other persons who are not associated persons, the value of the serviceshall mean the price at which the service is provided to such other persons but doesnot include the tax.

!# In case a person provides a service for no consideration or for aconsideration which is lower than the price at which such a service is provided bysuch person, the value of the service shall mean the open mar9et price for such aservice.

!5# In case of trade discounts, the value of the service shall mean thediscounted price, excluding the amount of the tax, provided the invoice shows thatthe discounted price and the related tax and the discount allowed is in conformitywith customary business practice.

!6# In case there is reason to believe that the value of a service has not

been correctly declared in the invoice or for any special nature of transaction it is


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difficult to ascertain the value of a service, the value of the service shall be the openmar9et price.

!8# -otwithstanding anything in subsections !"# to !6#, where the %uthoritydeems it necessary, it may, by notification in the official *a+ette, fix the value of anyservice or class of services and for that purpose fix different values for differentclasses or descriptions of the same or similar types of services but if the value atwhich the service is provided is higher than the value fixed by the %uthority, thevalue of the service shall, unless otherwise directed by the %uthority, be the value atwhich the service is provided.

E"$#$tio# @or the purpose of this section, the value of the utilities or facilities, ifany, ancillary to providing of taxable services shall be included in the value of suchservices.

!=# $he %uthority may, by notification in the official *a+ette, issue valuationrules for any service or class of services for purposes of assessment ordetermination and payment of tax under this %ct and prescribe threshold,parameters, standards, methods, formula, criteria or bases for the determination ofvalue of any taxable service or class of taxable services and the assessment of thetax on any service or class of services.

5. O!# '$r6!t ri&!.!"# $he open mar9et price of a service is

!a# the price, the service would fetch in an open mar9et transaction freelyentered into between persons who are not associated persons; or

!b# if it is not possible to determine an amount under paragraph !a#, theprice a similar service would fetch in an open mar9et transaction freelymade between persons who are not associated persons, adjusted to

ta9e account of the differences between the similar service and theactual service,

!c# determined on the basis of the mar9et conditions prevailing at the timeand place at which the service is provided.

!'# If the open mar9et price of a service cannot be determined undersubsection !"#, it may be determined by using any method or formula specified bythe %uthority for calculating an objective approximation of the price, the servicewould fetch in an open mar9et transaction freely made between persons who are notassociates.

7. Proiio# of !ri&! o!r $ !rio% of ti'!. !"# Where a service isprovided over a period of time and payment for the same is made on a periodicbasis, the service shall be treated as comprising two or more separate and distinctservices each corresponding to the part of the service to which each separate part ofthe consideration relates.

ILLUSTRATIONS

!a# Where services are provided for a two year period and payment ismade on a semiannual basis, the provision of services for each six month periodconstitutes a separate service.

!b# Where an insurance company provides an insurance policy over a five

year period and receives a premium on an annual basis, each premium relates to aseparate service.


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-ote $he above illustrations are merely explanatory and shall not be construedas conclusive in any manner whatsoever.

!'# $his section does not apply to services for which payment is made oninstallments basis.

CHAPTER IISCOPE O; TAX

10. S&o! of t$" $#% $i!% '$tt!r. !"# &ubject to the provisions of this %ctand the rules, there shall be charged, levied, collected and paidthe tax on the valueof a taxable service at the rate or ratesspecified in the &econd &chedule.

!'# $he *overnment may, on the recommendation of the %uthority andsubject to such conditions and restrictions as the *overnment may impose, bynotification in the official *a+ette, declare that in respect of any taxable serviceprovided by a registered person or a class of registered persons, the tax shall becharged, levied and collected at such higher, lower, fixed or specific rate or rates asmay be specified in the said notification.

!)# -otwithstanding other provisions of this %ct, the %uthority may, with theprior approval of the *overnment and by notification in the official *a+ette andsubject to the conditions, restrictions, limitations or otherwise, fix the limit orthreshold of annual turnover of any service or class of services provided by anyperson or class of persons below which such person or class of persons shall beexempt from payment of tax under the %ct.

!# % person re/uired to pay tax under this %ct shall be entitled to deductfrom the payable amount, the amount of tax already paid by him on the receipt oftaxable services used exclusively in connection with taxable services provided bysuch person subject to the condition that he holds a true and valid tax invoice notolder than six tax periods, showing the amount of tax earlier charged and paid underthe %ct on the services so received but the %uthority may, by notification in theofficial *a+ette, disallow or restrict such deduction in case of any service or servicesas it may deem appropriate.

11. P!ro# i$+! to $3 t$". !"# Where a service is taxable by virtue ofsubsection !"# of section ), the liability to pay the tax shall be on the registeredperson providing the service.

!'# Where a service is taxable by virtue of subsection !'# of section ), the

liability to pay the tax shall be on the person receiving the service.!)# $he %uthority may, by notification in the official *a+ette, specify the

service or services in respect of which the liability to pay tax shall be on any person,other than the person providing the taxable service, or the person receiving thetaxable service.

!# -othing contained in this section shall prevent the collection of tax froma different person if that person is made separately or jointly or severally liable forthe tax under section "


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!a# taxable service or servicesfrom the whole or any part of the tax;

!b# taxable service or servicesprovided by a person or class of personsfrom the whole or any part of the tax;

!c# recipient or recipients of service or services, including international

organi+ations and institutions, from the payment of the whole or anypart of the tax; and

!d# a class of persons, any area or areas of the Punjab from the whole orany part of the tax.

!'# $he exemption under subsection !"# may be allowed from any previousdate specified in the notification issued under subsection !"#.

1*. Eff!&t of &h$#/! i# th! r$t! of t$". If there is a change in the rate of tax,the taxable services shall be charged to tax at such rate as is in force at the time theservice is provided.

1-. S!&i$ ro&!%r! $#% t$" 8ithho%i#/ roiio#. !"#

-otwithstandinganything contained in this %ct, the %uthority may, by notification in the official*a+ette, prescribe a special procedure for the payment of tax, registration, boo99eeping, invoicing or billing re/uirements, returns and other related matters inrespect of any service or class of services, as may be specified.

!'# -otwithstanding other provisions of this %ct, the %uthority may re/uireany person or class of persons whether registered or not for the purpose of this %ctto withhold full or part of the tax charged from such person or class of persons on theprovision of any taxable service or class of taxable services and to deposit the tax sowithheld, with the *overnment within such time and in such manner as it may, bynotification in the official *a+ette, specify.

1. !!/$tio# of o8!r to &o!&t, $%'i#it!r $#% !#for&! t$" o# &!rt$i#!ri&!. !"# $he *overnment may, in accordance with %rticle "8 of the2onstitution of the Islamic 7epublic of Pa9istan, authori+e the @ederal :oard of7evenue or any other @ederal agency or person to administer, collect and enforcethe levy of tax on such taxable services as it may notify and in such mode andmanner and for such period as may be prescribed and subject to such limitations,restrictions and conditions as it may deem appropriate.

!'# $he *overnment may, by notification in the official *a+ette, authori+eany Provincial agency, department, organi+ation or person to administer, collect and

enforce the levy of tax on such taxable services as it may notify in such mode andmanner and for such period as it may prescribe and subject to such restrictions andconditions as it may impose.

!)# %t the end of the period prescribed under subsection !"#, the tax ontaxable services notified under subsection !"# shall be administered, collected andenforced by the %uthority in the same mode and manner as all other taxableservices.

1. A%9t'!#t. !"# $he %uthority may, subject to such conditions andrestrictions as it may specify, allow registered persons to claim adjustments ordeductions, including refunds arising as a result thereof, in respect of the tax paid

under any other law on any account in respect of any taxable service or goods orclass of taxable services or goods provided by them.


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!'# @or purposes of subsection !"#, the %uthority may adopt the principlesor concepts laid down in such other law in respect of adjustments, deductions orrefunds including +erorating principle.

!)# @or the purpose of removal of any doubt it is clarified that noadjustment or deduction of any tax payable under any other law shall be claimed byany person except in the manner and to the extent specified in the notification issuedunder subsection !"#.

CHAPTER III

PA>=ENT AN COLLECTION O; TAX ON TAXABLE SERVICES

14. Co!&tio# of !"&! t$". !"# %ny person who has collected or collects thetax or charge, whether under misapprehension of any provision of this %ct orotherwise, which was not payable as tax or charge or which was in excess of the taxor charge actually payable and the incidence of which had been passed on to theperson to whom the service was provided, shall pay the amount of tax or charge so

collected to the *overnment.

!'# %ny amount payable to the *overnment under subsection !"# shall bedeemed to be an arrear payable under the %ct and shall be recovered accordingly.

!)# $he burden of proof that the incidence of tax or charge referred to insubsection !"# has been or has not been passed to the person to whom the serviceis provided shall be on the person collecting the tax or charge.

15. Ti'!, '$##!r $#% 'o%! of $3'!#t. !"# $he tax in respect of a taxableservice provided during a tax period shall be paid by a person at the time of filing thereturn in respect of that period under 2hapter ?I.

!'# @or purposes of subsection !"#, a taxable service shall be consideredto have been provided in the tax period during which

!a# it was provided to the recipient;

!b# an invoice for the value of the taxable service was issued or wasdue to be issued or sent or due to be sent to the recipient; or

!c# consideration for the same was received ,

whichever is earlier.

!)# -otwithstanding anything contained in subsection !"#, the %uthoritymay, by a notification in the official *a+ette, direct that the tax in respect of anytaxable service or such class of taxable services shall be charged, collected and paidin any other way, mode, manner or time as may be specified in the notification.

!# $he tax due on taxable services shall be paid by any of the followingmodes

!a# through deposit in a ban9 designated by the %uthority;or

!b# through such other mode and manner as may be specified bythe %uthority.

17. Joi#t $#% !!r$ i$+iit3 of r!/it!r!% !ro# 8h!r! t$" #$i%. !"#Where a registered person receiving a taxable service from another registered

person is in the 9nowledge of or has reasonable grounds to suspect that some or allof the tax payable in respect of that taxable service provided would go unpaid as


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against the re/uirements of this %ct, such person as well as the person providing thetaxable service shall be jointly and severally liable for payment of such unpaidamount of the tax.

!'# $he %uthority may, by notification in the official *a+ette, exempt anyperson, service or transaction or class of persons, services or transactions from theprovision of subsection !"#.

20. S$! of t$"$+! $&tiit3 or tr$#f!r of o8#!rhi.!"# Where theownership of any business providing taxable services is sold, transferred orotherwise disposed of as an ongoing concern or activity, the fact of such sale,transfer or other disposition shall be intimated to the 2ommissioner within one monthof the occurrence of such fact by the former owner.

!'# $he tax chargeable on the taxable services provided in the businessreferred to in subsection !"# shall be accounted for and paid by the person to whomsale or other disposition of such business is made or ownership thereof is transferredand every such person shall be liable to registration under this %ct.

21. Et$t! of %!&!$!% !ro#. $he tax liability of a deceased registeredperson under this %ct shall be the first charge on his estate in the hands of hissuccessors.

22. Et$t! i# +$#6rt&3.!"# Where a registered person is declared ban9rupt,the tax liability under this %ct shall pass on to the estate in ban9ruptcy if it continuesto operate the business.

!'# Where the tax liability is incurred by an estate in ban9ruptcy, the taxshall be deemed to be a current expenditure in the operations of the estate inban9ruptcy and shall be paid before the claims of all other creditors are settled.

2*. Li$+iit3 for $3'!#t of t$" i# &$! of ri$t! &o'$#i! or +i#!!#t!rri!. Where any private company or business enterprise is wound up andany tax chargeable on or payable by the company or business enterprise, whetherbefore, or in the course, or after its li/uidation, in respect of any tax period cannot berecovered from the company or business enterprise, every person who was anowner of, or partner in, or director of the company or business enterprise during therelevant period shall, jointly and severally with such persons be liable for payment ofsuch tax.

2-. A!'!#t of t$". !"# Where on the basis of any information ac/uiredduring an audit, in/uiry, inspection or otherwise, an officer of the %uthority is of the

opinion that a registered person has not paid the tax due on taxable servicesprovided by him or has made short payment, the officer shall ma9e an assessmentof the tax actually payable by that person and shall impose a penalty and chargedefault surcharge in accordance with sections = and


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the officer may, for reasons to be recorded in writing, fix provided that such extendedperiod shall ordinarily not exceed sixty days.

!# In computing the period specified in subsection !)#, any period duringwhich the proceedings are adjourned on account of a stay order or proceedingsunder section 6< or the time ta9en through adjournments by the person shall beexcluded.

!5# %n order passed by an officer under subsection !"# may be furtheramended as may be necessary when on the basis of any additional informationac/uired during an audit, in/uiry, inspection or otherwise, the officer is satisfied that

!a# any tax has been underassessed or assessed at a low rate; or

!b# any taxable service provided by the person has escapedassessment.

!6# $he provisions of subsections !'#, !)# and !# shall be applicable to anorder passed under subsection !5#.

CHAPTER IV

RE?ISTRATION

2. R!/itr$tio#. !"# % person shall register under this %ct,who

!a# provides any taxableservice from his office or place of business in thePunjab; or

!b# is otherwise re/uired to be registered under any of the provisions of the%ct or the rules; or

!c# fulfills any other criteria or re/uirements which the %uthority may

prescribe under subsection !'#.

!'# $he registration under this section will be regulated in such mannerand subject to such conditions and restrictions as the %uthority may, by notification inthe official *a+ette, prescribe.

!)# % person who receives a service, which is a taxable service by virtue ofsubsection !'# of section ), and is not a registered person shall be deemed to be aregistered person for the purposes of the tax period in which

!a# such personreceives the service;

!b# an invoice for the value of the service is issued or sent to or

received bythe person; or

!c# consideration for the service is paid by the person

whichever is earlier and all the provisions of this %ct and the rules shallbe applicable to such person for that particular tax period and anymatters relating to, arising out of, or concerning that tax period as if thatperson had provided the service.

!# $he %uthority may publish on its website a list of persons registeredunder this %ct.

!5# It shall be reasonable for a person to believe that another person is

registered under this %ct if that other person is on the list placed on the website ofthe %uthority.


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2. Vo#t$r3 r!/itr$tio#.!"# % person who carries on an economic activity butis not re/uired to be registered may apply for voluntary registration at any time.

!'# If a person who is not re/uired to be registered applies for voluntaryregistration, the %uthority may register the person if the %uthority is satisfied that

!a# the person is providing, or shall provide a service that is taxableservice if the person wasregistered;

!b# the person has a place of business at which he carries on aneconomic activity;

!c# there are reasonable grounds to believe that the person shall9eep proper records and file regular returns as prescribed underthis %ct and the rules; and

!d# if the person has commenced carrying on an economic activity,the person has

!i# 9ept proper records in relation to his economic activity;and

!ii# complied with his obligations under other applicabletaxation laws.

24. Co'or3 r!/itr$tio#. !"# If the %uthority is satisfied that a person whois re/uired to be registered and has not applied for registration, the %uthority shallregister the person and shall, not later than fifteen days before the day on which theregistration ta9es effect, notify the person of the registration, the day on which itta9es effect, and the registration number issued to the person.

!'# -o person shall be registered compulsorily without being given anadvance notice and an opportunity of being heard in such manner as the %uthoritymay specify.

!)# $he %uthority may, by notification in the official *a+ette, authori+e anyofficer to perform any of the functions under this section relating to compulsoryregistration of a person for any of the taxable services.

25. S!#io# of r!/itr$tio#. !"# &ubject to subsection !)#, the %uthoritymay temporarily inactivate the registration of a person if it is satisfied that the person

!a# is not entitled to be registered; or

!b# has failed to comply with obligations under this %ct or the rules.

!'# $he %uthority shall give notice to a registered person stating thereasons for temporary inactivation of the person4s registration and the remedialactions re/uired to be ta9en by the person in such time as may be specified in thenotice.

!)# In case the %uthority is not satisfied with the response of the person orthe remedial action ta9en by him or does not receive any response in the specifiedtime, the %uthority may suspend that person4s registration.

!# $he suspension of registration shall be effected by removing the nameof the person from the list of registered persons published on the %uthority4s website.


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!5# %t any time within a period of sixty days of suspension, the %uthoritymay withdraw the suspension if it is satisfied with the remedial actions ta9en by theperson.

!6# Where, after sixty days, the suspension has not been withdrawn, the%uthority may

!a# institute proceedings against the person in respect of the allegednoncompliance under this %ct;

!b# reinstate the person4s registration; or

!c# if neither of the actions in clauses !a# and !b# is done, cancel theperson4s registration.

!8# -o registration shall be cancelled unless the %uthority either throughen/uiry, investigation or audit is satisfied that circumstances exist necessitating suchcancellation and under no circumstances, the cancellation of registration shallabsolve the person of his other obligations and liabilities under the %ct or the rules.

27. !:r!/itr$tio#.!"# $he %uthority may deregister a registered person orsuch class of registered persons not re/uired to be registered under this %ct.

!'# Where any person registered under this %ct believes that he does notsatisfy the re/uirements for registration specified in section '5, he may ma9e anapplication to the %uthority to be deregistered.

!)# If upon receiving such an application, the %uthority is satisfied that theperson is not re/uired to be registered under this %ct and has fulfilled the obligationsunder the %ct, it shall deregister such person.

!# Where the %uthority receives an application under subsection !'#, itshall dispose of the application within a period of three months from the date of thereceipt of the application, or within such extended period, not exceeding sixty days,as the %uthority may, for reasons to be recorded in writing, fix.

CHAPTER V

BOO@ @EEPIN? AN AUIT PROCEEIN?S

*0. I$#&! of t$" i#oi&!.!"# % registered person providing a taxableservice shall issue a numbered and dated tax invoice containing the followingparticulars

!a# name, address and registration number of the service provider;

!b# name, address and registration number, if any, of the servicerecipient;

!c# description of service or services;

!d# value exclusive of the tax;

!e# amount of the tax; and

!f# value inclusive of the tax.

!'# $he %uthority may, by notification in the official *a+ette, specify suchmodified invoices for different services or persons and prescribe the manner and

procedure for regulating the issuance and authentication of tax invoices.


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!)# % registered person providing a taxable service may, subject to suchconditions and restrictions as the %uthority may, by notification in the official *a+ette,specify, issue invoices to another registered person or other recipient of taxableservice electronically and transmit images or statements of such invoices to the%uthority as well as to the 2ommissioner, as may be specified.

*1. R!&or%.!"# % registered person providing taxable service shall maintainand 9eep at his business premises or registered office in Cnglish or Drdu thefollowing records of taxable service !including exempt service# provided by him or byhis agent acting on his behalf in such form and manner as would permit readyascertainment of his tax liability during a tax period

!a# records of taxable service provided indicating

!i# the description and type of service;

!ii# the value of the service;

!iii# the particulars of the person to whom the service was provided;and

!iv# any other information as may be specified by the %uthority;

!b# records of exempt service; and

!c# such other records as may be specified by the %uthority.

!'# $he %uthority may, by notification in the official *a+ette, re/uire aregistered person or class of registered persons to declare and use as many numberof business ban9 accounts as may be specified by the %uthority in such notificationto ma9e or receive payments on account of providing services for the purpose of this%ct and the rules and to ma9e payment of due tax from such accounts.

!)# $he %uthority may, by notification in the official *a+ette, specify thatany person orclass of persons registered under this %ct shall use such electronicfiscal cash registers in such manneras are approved by the %uthority.

!# $he %uthority may, by notification in the official *a+ette, prescribe theprocedure or software for electronic invoicing or billing, maintenance of records, filingof tax returns and for any other matter or approve any software for electronicinvoicing or billing, maintenance of records and filing of returns by a registeredperson or class of such persons under this %ct.

!5# $he registered persons, whose accounts are subject to audit under the

2ompanies rdinance, "


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possession or control or in the possession or control of his agent, and where suchrecords or documents have been stored as electronic data, he shall allow to suchofficer full and free access to, and use of, such data of any machine.

**. A%it ro&!!%i#/. !"# %n officer authori+ed by the %uthority or the2ommissioner may, on the basis of the return or returns submitted by a registeredperson or the records maintained under this %ct and the rules, conduct an audit ofsuch person.

!'# In case the %uthority or the 2ommissioner has any information showingthat any registered person is involved in tax fraud or evasion of tax, it or as the casemay be, he may authori+e an officer not below the ran9 of the %ssistant2ommissioner, to conduct an in/uiry or investigation, which may or may not be inaddition to any audit carried out for the same period.

!)# Where the officer is to conduct an audit under subsection !"#, he shallissue a notice of audit to the person informing him of the audit proceedings anddirect him to produce any records or documents which such officer may re/uire forconducting the audit.

!# $he officer shall conduct audit and issue an audit observation orobservations pointing out the contraventions of this %ct or the rules and the amountof the tax evaded or short paid, and the registered person may, within a period oftwenty one days of the receipt of the audit observation, submit his reply in writing.

!5# If no reply is received within the specified time or the reply furnished bythe registered person is found unsatisfactory, the officer shall issue an audit reportspecifying the amount of the tax or charge that has not been levied or has been shortlevied or any other violation of any provision of the %ct or the rules.

!6# %fter completion of the audit under this section or any other provision ofthis %ct or the rules, an officer having pecuniary jurisdiction in terms of section 6(shall, if re/uired, pass an order determining the correct amount of payable tax,charging default surcharge and imposing a penalty.

!8# -otwithstanding the penalties prescribed in section =

!a# if a registered person wishes to deposit the amount of the taxshort paid or evaded along with default surcharge voluntarily,whenever it comes to his notice, he may, before receipt of noticeof audit, file a revised return and may deposit the amount of taxshort paid or evaded along with default surcharge, in which case

no penalty shall be recovered from him;

!b# if a registered person wishes to deposit the amount of the taxshort paid or evaded along with default surcharge during theaudit, or at any time before issuance of show cause notice inlieu of the audit report, he may file a revised return and maydeposit the short paid or evaded amount of the tax, defaultsurcharge under section < and twenty per cent of the penaltypayable under section =, in which case the show cause noticein lieu of the audit report shall not be issued in the matter;

!c# if a registered person wishes to deposit the amount of tax short

paid or evaded along with default surcharge after issuance ofshow cause notice, he may file a revised return and may deposit


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the short paid or evaded amount of the tax, default surchargeunder section


22/57


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!6# $he %uthority may distribute the wor9 and related functions amongstthe above designations in a manner it deems appropriate and ma9e changes in suchwor9 distribution as and when deemed proper.

!8# $he %uthority may, by notification in the official *a+ette, prescribeuniform including shoulder strips and badges for different classes of the officers orofficials of the %uthority.

!=# %ll jurisdictional and competency issues arising under this %ct or therules shall be decided by the %uthority in such manner as it thin9s fit.

-0. Po8!r. !"# %n officer appointed under section )< shall exercise suchpowers and discharge such duties as are conferred on him under this %ct and therules and he shall also be empowered and competent to exercise all powers anddischarge all duties or functions conferred upon any officer subordinate to him.

!'# $he %uthority may, by general or special order, impose suchlimitations, restrictions or conditions on the exercise of such powers and discharge of

such duties or functionsas it deems fit.

-1. itri+tio# of o8!r. !"# $he %uthority may, by notification in the official*a+ette, and subject to such limitations or conditions, empower by name or bydesignation

!a# an %dditional 2ommissioner to exercise or perform any of the powersor functionsof a 2ommissioner;

!b# a >eputy 2ommissioner to exercise or perform any of the powers orfunctions of an %dditional 2ommissioner;

!c# an %ssistant 2ommissioner to exercise or perform any of the powers or

functions of a >eputy 2ommissioner; and!d# any other officer to exercise or perform any of the powers or functions

of an %ssistant 2ommissioner.

!'# $he %uthority may confer powers and functions of any officer asadditional duties to any officer of the same ran9 or a step senior or junior in ran9.

!)# %n officer to whom any powers or functions are conferred under thissection shall not assign such powers or functions to any other officer except with theprior permission of the %uthority.

-2. S!&i$ J%/!. !"# $he *overnment may, by notification in the official

*a+ette, appoint any person who is serving or has served as >istrict and &essionsAudge for a period of at least five years as &pecial Audge and, where it appointsmore than one &pecial Audge, it shall specify in the notification the head/uarters ofeach &pecial Audge and the territorial limits within which he shall exercise jurisdictionunder this %ct and the rules.

!'# If a &pecial Audge is, for any reasons, unable to perform his dutiesunder this %ct or the rules, the >istrict and &essions Audge of the >istrict shallperform the duties of the &pecial Audge for the >istrict.

-*. Co/#i


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!a# a report in writing made by an officer, not below the ran9 of %ssistant2ommissioner with the approval of the 2ommissioner or by an officer especiallyauthori+ed in this behalf by the %uthority;

!b# receiving a complaint or information of facts constituting such offencemade or communicated by any person; or

!c# his 9nowledge ac/uired during any proceedings before him.

!'# If the &pecial Audge receives a report under clause !a# of subsection!"#, the &pecial Audge shall proceed with the trial of the accused.

!)# If the &pecial Audge receives a complaint or information under clause!b# of subsection !"#, on the basis of his own 9nowledge, the &pecial Audge shall,before issuing a summon or warrant for appearance of the person hold a preliminaryin/uiry for purposes of ascertaining the truth or falsehood of the complaint,information or 9nowledge or direct any Eagistrate or any officer to hold such in/uiryand submit a report, and such Eagistrate or officer, shall conduct such in/uiry and

ma9e a report accordingly.

!# If, after conducting such an in/uiry or after considering the report ofsuch Eagistrate or officer, the &pecial Audge may dismiss the complaint if there areno grounds to proceed further, or may decide to proceed against the person inaccordance with law.

!5# % &pecial Audge or a Eagistrate or an officer holding an in/uiry undersubsection !)# may hold such in/uiry, as nearly as possible, in accordance with theprovisions of section '(' of the 2ode of 2riminal Procedure, "=


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CHAPTER VIII

O;;ENCES AN PENALTIES

-5. Off!#&! $#% !#$ti!. !"# If a person commits any offence described incolumn ' of the $able below shall, in addition to and not in derogation of any

punishment to which he may be liable under any other law, be liable to the penaltymentioned against that offence in column ).

!'# $he sections referred to in column of the said $able shall be deemedto bemeant for illustrative purposes only and the corresponding offence described incolumn ' may fall and be prosecuted under other sections of this %ct as well.

TABLE

S. No. Off!#&! P!#$ti! S!&tio#

1 2 * -

". %ny person who isre/uired to apply forregistration under this%ct fails to ma9e anapplication forregistration beforeproviding any taxableservices

&uch person shall be liable topay a penalty of ten thousandrupees or five per cent of theamount of the tax he would havebeen liable to pay had he beenregistered, whichever is higher.

In the case of non complianceof compulsory registration, theminimum penalty shall be tenthousand rupees

If such person who is re/uired toget himself registered under this%ct, fails to get registered withinninety days of providing taxableservices, he shall be furtherliable, upon conviction by a&pecial Audge, to imprisonmentfor a term which may extend toone year, or with fine which mayextend to the amount of the taxhe would have been liable to

pay had he been registered, orwith both.

'5

'. Where any person failsto furnish a return withinthe due date.

&uch person shall be liable topay a penalty of five thousandrupees provided if a return is notfiled within fifteen days of thedue date, a penalty of hundredrupees for each day of defaultshall be levied.

)5


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). Where any person failsto deposit the amountof the tax due or anypart thereof in the timeor manner laid down

under this %ct or therules.

!a# &uch person shall be liableto pay a penalty of ten thousandrupees or five per cent of the taxpayable for that period,whichever is higher.

!b# If the amount of the tax due isnot paid even after the expiry ofa period of sixty days of issuanceof the notice for such payment byan officer, not below the ran9 of%ssistant 2ommissioner, theperson shall be further liable,upon conviction by a &pecialAudge, to imprisonment for aterm which may extend to three

years, or with fine which mayextend to the amount of theunpaid tax, or with both.

!c# -o penalty shall be levied ifany miscalculation is made forthe first time during a year.

), , "(,"", "8,"=and 6=

. %ny person who fails tomaintain recordsre/uired under the %ctor the rules.

&uch person shall pay a penaltyof ten thousand rupees or fiveper cent of the total tax payablefor the tax period for which he

has failed to maintain there/uired record, whichever ishigher.

)(, )" and)'

5. Where a registeredperson who, withoutany reasonable cause,in noncompliance withthe provisions of this%ct fails to producerecords on receipt of anotice from the%uthority or any officerof the %uthoritydirecting him to producesuch records.

Where such a person is acompany, it shall be liable to paya penalty of ten thousandrupees.

Where such person is not acompany, he shall be liable topay a penalty of five thousand

rupees.

Where such person fails toproduce the record within sixtydays of receipt of a notice, heshall be liable to pay the penaltyprescribed for the offence atserial -o. above.

)(, )', 5)and 58


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6. %ny person who9nowingly orfraudulently

!a# submits a false orforged document to anyofficer of the %uthority;or

!b# destroys, alters,mutilates or falsifies therecords; or

!c# ma9es a falsestatement, falsedeclaration, falserepresentation, false

personification, or givesany false information.

&uch person shall be liable

to pay a penalty of twenty fivethousand rupees or onehundred per cent of the taxpayable for the tax period towhich the offence relates,whichever is higher.

&uch person shall further beliable, upon conviction by a&pecial Audge, to imprisonmentfor a term which may extend tofive years or with fine which mayextend to an amount e/ual tothe tax payable for the taxperiod to which the offence

relates, or with both.

*eneral

8. Where any person whodenies or obstructs theaccess of an authori+edofficer to the businesspremises, registeredoffice or to any otherplace where recordsare 9ept, or otherwiserefuses access to

accounts or records.

&uch person shall be liable topay a penalty of twenty fivethousand rupees or onehundred per cent of the taxpayable for the tax period towhich the offence relates,whichever is higher.

&uch persons shall, further be

liable, upon conviction by a&pecial Audge, to imprisonmentfor a term which may extend tofive years, or with a fine whichmay extend to an amount e/ualto the tax payable for the taxperiod to which the offencerelates, or with both.

)", )' and56

=. Where any personcommits, causes tocommit or attempts tocommit tax fraud, orabets or connives in thecommission of tax fraude/ual to twenty fivethousand rupees ormore.

&uch person shall be liable topay a penalty of up to fivehundred thousand rupees, butnot less than twenty fivethousand rupees, or onehundred per cent of the taxpayable for the tax period towhich the offence relates,whichever is higher.

&uch person shall, further beliable, upon conviction by a&pecial Audge, to imprisonmentfor a term which may extend to

five years, or with fine whichmay extend to an amount e/ual

'!)#


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to the tax payable for the taxperiod to which the offencerelates, or with both.


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repeats an offence forwhich a penalty isprovided under this %ct.

pay twice the amount of penaltyprovided under the %ct for thesaid offence.

". Where any person

!a# 9nowingly andwithout lawfulauthority gainsaccess to orattempts to gainaccess to thecomputeri+edsystem; or

!b# unauthori+edly usesor discloses or

publishes orotherwisedisseminatesinformation obtainedfrom thecomputeri+edsystem; or

!c# falsifies any recordor information storedin the computeri+edsystem; or

!d# 9nowingly ordishonestlydamages or impairsthe computeri+edsystem; or

!e# 9nowingly ordishonestlydamages or impairsany duplicate tapeor disc or othermedium on whichany informationobtained from thecomputeri+edsystem is 9ept orstored; or

!f# unauthori+edly usesuni/ue useridentifier of anyother registered

user to authenticatea transmission of

&uch person shall pay a penaltyof twenty five thousand rupeesor one hundred per cent of theamount e/ual to the loss causedto the tax revenue.

&uch person shall further beliable, upon conviction by the&pecial Audge, to imprisonmentfor a term which may extend toone year, or with fine which mayextend to an amount e/ual tothe loss caused to the tax

revenue, or with both.

*eneral


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information to thecomputeri+edsystem; or

!g# fails to comply withor contravenes anyof the conditionsprescribed forsecurity of uni/ueuser identifier.

-7. !f$t r&h$r/!. !"# -otwithstanding the provisions of section ', if aregistered person does not pay the tax due or any part thereof, whether willfully orotherwise, on time or in the manner specified under this %ct, rules or notifications orprocedures issued thereunder, he shall, in addition to the tax due and any penaltyunder section =, pay default surcharge at the rate mentioned below

!a# the person liable to pay any amount of tax or charge shall pay defaultsurcharge at the rate of interban9 rate plus three per cent per annumof the amount of the tax due; and

!b# in case, the default is on account of tax fraud, the person who hascommitted tax fraud shall pay default surcharge at the rate of two percent per month, of the amount of tax evaded, till such time the entireliability including the amount of default surcharge is paid.

!'# @or the purpose of calculation of default surcharge, the period ofdefault shall be rec9oned from the sixteenth day following the due date of the taxperiod to which the default relates, to the day preceding the date on which the tax

due is actually paid.E"$#$tio# @or purposes of this section, the tax due does not include the amountof penalty.

0. E"!'tio# fro' !#$t3 $#% %!f$t r&h$r/!. $he *overnment may, bya notification in the official *a+ette, exempt any registered person or any taxableservice from payment of the whole or any part of the penalty and default surchargesubject to such conditions and limitations as may be specified.

1. Co'o#%i#/ of off!#&!. -otwithstanding anything contained in anyother provision of this %ct, where any person has committed any offence warrantingprosecution under the %ct, the %uthority may, either before or after the institution of

any proceedings for the prosecution of such offence, compound the offence andterminate the proceedings if such person pays the amount of the tax due along withsuch default surcharge and penalty as is determined by the %uthority under theprovisions of this %ct and the rules.

2. R!&o!r3 of t$" #ot !i!% or hort:!i!%. !"# Where by reason ofinadvertence, error, misconstruction or for any other reason, any tax or charge hasnot been levied or has been short levied, the person liable to pay such amount of thetax or charge shall be served with a notice, within three years of the relevant taxperiod re/uiring him to show cause for payment of the amount specified in thenotice.

!'# Where by reason of some collusion, abetment, deliberate attempt, misstatement, fraud, forgery, false or fa9e documents


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!a# any tax or charge has not been paid or is, short paid, the personliable to pay such tax shall be served with a notice within fiveyears of relevant tax period, re/uiring him to show cause fornonpayment of such tax; and

!b# any amount of the tax is refunded which is not due, the personobtaining such refund shall be served with a notice within fiveyears of the receipt of such refund to show cause for recovery ofsuch refund.

!)# $he officer shall, after considering the objections of the person servedwith a notice under subsections !"# or !'# or if the objections are not received withinthe stipulated period, determine the amount of the tax or charge payable by him andsuch person shall pay the amount so determined.

!# %ny order under subsection !)# shall be made within one hundred andtwenty days of issuance of the notice to show cause or within such extended periodas the officer may, for reasons to be recorded in writing, fix provided that suchextended period shall not ordinarily exceed sixty days.

!5# In computing the period specified in subsection !#, any period duringwhich the proceedings are adjourned on account of a stay order or proceedingsunder section 6< or the time ta9en through adjournments by the petitioner notexceeding thirty days shall be excluded.

*. Po8!r to ''o# !ro# to /i! !i%!#&! $#% ro%&! %o&'!#t.%n officer may summon any person whose attendance he considers necessaryeither to tender evidence or to produce documents or any other thing in any audit,in/uiry, investigation or proceedings which such officer is ma9ing for any of the

purposes of this %ct and the rules.!'# %ny person summoned under subsection !"# shall be bound to attend

either in person or by an authori+ed agent, as the officer may direct.

!)# -otwithstanding anything in subsections !"# and !'#, a person who isexempt from personal appearance in a 2ourt under sections ")' and ")) of the2ode of 2ivil Procedure !? of "


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company from the liabilities of payment of the tax, default surcharge and any penaltyimposed or due under this %ct.

. Pro&!%r! to +! foo8!% o# $rr!t of $ !ro#. !"# When an officer arrestsa person under section 5, he shall immediately intimate the fact of arrest of thatperson to the &pecial Audge who may direct such officer to produce that person atsuch time and place and on such date as the &pecial Audge considers expedient.

!'# -otwithstanding anything contained in subsection !"#, any personarrested under this %ct shall be produced before the &pecial Audge or, if there is no&pecial Audge within a reasonable distance, to the nearest Eagistrate within twentyfour hours of such arrest, excluding the time necessary for the journey from the placeof arrest to the court of the &pecial Audge or of the Eagistrate.

!)# When any person is produced under subsection !'# before the &pecialAudge, the &pecial Audge may, on the re/uest of such person, after perusing therecord, if any and after giving the prosecution an opportunity of being heard, admithim to bail on his executing a bond, with or without sureties, or refuse to admit him tobail and direct his detention at such place as he deems fit.

!# -othing contained herein shall preclude the &pecial Audge fromcancelling the bail of any such person at a subse/uent stage if, for any reason, heconsiders such cancellation necessary, but before passing such order he shall affordsuch person an opportunity of being heard, unless for reasons to be recorded heconsiders that the affording of such opportunity shall defeat the purpose of this %ct.

!5# When such person is produced under subsection !'# before aEagistrate, such Eagistrate may, after authori+ing his detention in such custody atsuch place and for such period as he considers necessary or proper for facilitating

his earliest production before the &pecial Audge, direct his production before the&pecial Audge on a date and time to be fixed by him or direct such person to beforthwith ta9en to, and produced before the &pecial Audge and he shall be so ta9enor produced.

!6# -othing in subsections !'#, !)# and !# shall preclude the &pecial Audgeor the Eagistrate from remanding any such person to the custody of the officerholding an in/uiry or investigationagainst that person if such officer ma9es a re/uestin writing to that effect, and the &pecial Audge or the Eagistrate, after perusing therecord, if any, and hearing such person, is of the opinion that for the completion ofin/uiry or investigation it is necessary to ma9e such order but the total period of suchcustody shall not exceed fourteen days.

!8# When any person is arrested under this %ct, the arresting officer shallrecord the fact of arrest and other relevant particulars in the register specified insubsection !""# and shall immediately proceed to in/uire into the charge againstsuch person and if he completes the in/uiry within twentyfour hours of his arrest,and he may, after producing such person before the &pecial Audge or the Eagistrate,ma9e a re/uest for his further detention in his custody.

!=# While holding an in/uiry under subsection !8#, the officer shall exercisethe same powers as are conferred upon or exercisable by an officer in charge of apolice station under the 2ode of 2riminal Procedure, "=


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!

!)# %ll other *overnment departments, local bodies, autonomous bodies,

corporations or such other institutions shall supply re/uisite information and render


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necessary assistance to the authori+ed officer in the course of in/uiry orinvestigation under this section.

4. O+i/$tio# to ro%&! %o&'!#t $#% roi%! i#for'$tio#. !"#-otwithstanding anything contained in this %ct or any other law, any person re/uiredto maintain any record under this %ct and the rules, shall, on demand by an officer,not below the ran9 of a %ssistant 2ommissioner, by notice in writing, as and whenspecified in the notice

!a# produce for examination, such documents or records which the officerconsiders necessary or relevant to the audit, in/uiry or investigationunder this %ct;

!b# allow the officer to ta9e extracts from or ma9e copies of suchdocuments or records; and

!c# appear before the officer and answer any /uestion put to himconcerning the documents and records relating to the audit, in/uiry or

investigation referred to in clause !a#.

!'# %n officer conducting an audit, in/uiry or an investigation under the %ctand the rules, may re/uire in writing any person, department, company ororgani+ation to furnish such information as is held by that person, department,company or organi+ation, which, in the opinion of the officer, is relevant to suchaudit, in/uiry or investigation.

!)# $he %uthority may re/uire, in writing, any person, department,company or organi+ation, to provide any information or data held by that person,department, company or organi+ation, which, in the opinion of the %uthority, isre/uired for purposes of formulation of policy or administering or implementing this

%ct and the rules.

!# Cvery person, department, company or organi+ation shall furnish theinformation re/uisitioned by the %uthority or the officer under subsections !'# or !)#,within the time specified in the notice issued by the %uthority.

5. S!$r&h! #%!r 8$rr$#t.!"# Where any officer has reason to believe thatany documents or things which in his opinion, may be useful for, or relevant to, anyproceedings under this %ct are 9ept in any place, he may after obtaining a warrantfrom the Eagistrate or from the 2ommissioner, enter that place and cause a searchto be made at any time.

!'# %ll searches made under subsection !"# shall be carried out inaccordance with the relevant provisions of the 2ode of 2riminal Procedure, "=


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!)# % person to whose premises, an officer of the %uthority is posted underthis section shall provide on his own cost, all facilities re/uired to meet thedepartmental re/uirements of such posting as determined by the %uthority or the2ommissioner.

0. Po8!r of $%9%i&$tio#. !"# In respect of cases involving determination oftax liability, assessment of the tax, charging of default surcharge, imposition ofpenalty and recovery of amount erroneously refunded or any other contravention orviolation including tax fraud under this %ct or the rules, the jurisdiction and powers ofadjudication of the officers shall be as follows

!a# A%%itio#$ Co''iio#!r 2ases without any restriction as to theamount of the tax involved or amount erroneously refunded;

!b# !t3 Co''iio#!r 2ases where the amount of the tax involvedor the amount erroneously refunded exceeds one million rupees, butdoes not exceed two and a half million rupees;

!c# Ait$#t Co''iio#!r 2ases where the amount of the taxinvolved or the amount erroneously refunded does not exceed onemillion rupees; and

!d# oth!r offi&!r of th! Athorit3 such cases, other than thosementioned above, as may be prescribed.

!'# $he 2ommissioner may adjudicate any case falling in the jurisdictionand powers of any officer subordinate to him and appeal against the order passed bythe 2ommissioner in such case shall lie to the %ppellate $ribunal.

!)# $he %uthority may regulate the system of adjudication includingtransfer of cases and extension of time limit.

E"$#$tio# @or purposes of this section, the tax means the principal amount of thetax other than default surcharge and in case where only default surcharge isinvolved, the amount of default surcharge.

1. R!iio# +3 th! Co''iio#!r. !"# $he 2ommissioner may, of his ownmotion or on an application made in writing by a registered person for revision, callfor and examine the record of any proceedings under this %ct in which an order hasbeen passed by an officer subordinate to him.

!'# If after examining the record under subsection !"#, the 2ommissioner isnot satisfied with the legality or propriety of any order passed by an officer, the

2ommissioner may ma9e such revision to the order as he may thin9 fit.

!)# -o order imposing or enhancing any penalty or fine re/uiring paymentof a greater amount of the tax than the originally levied amount shall be passedunless the person affected by such order has been given an opportunity of showingcause and of being heard.

!# $he 2ommissioner shall not revise any order under subsection !'# if

!a# an appeal under section 6) is pending or the matter has beenreferred forresolution under section 6


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!c# in the case of an application made by a person, the applicationhas not been made within ninety days of the date on which suchorder was served on the person, unless the 2ommissioner issatisfied that the person was prevented by sufficient cause fromma9ing the application within the time allowed; and

!d# in the case where the 2ommissioner has on his own motioncalled for and examined an order passed by a subordinateofficer, more than five years have lapsed from the date of theoriginal order.

!5# -o application for revision of an assessment shall be made undersubsection !"# unless the amount of the tax due under the assessment, as is not indispute, has been paid by the taxpayer.

2. R!iio# +3 th! Athorit3. !"# $he %uthority may, of its own motion, call forand examine the record of any departmental proceedings under this %ct or the rulesfor the purpose of satisfying itself as to the legality or propriety of any decision ororder passed therein by an officer.

!'# If after examining the record under subsection !"#, the %uthority is notsatisfied with the legality or propriety of any decision or order passed by an officer, itmay pass such order as it may thin9 fit.

!)# -o order imposing or enhancing any penalty or fine re/uiring paymentof a greater amount of the tax than the originally levied amount shall be passedunless the person affected by such order has been given an opportunity of showingcause and of being heard.

!# -o proceeding under this section shall be initiated in a case where an

appeal under section 66 is pending or the matter has been referred for resolutionunder section 6


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!a# where the appellant is a company, one thousand rupees; or

!b# where the appellant is not a company, two hundred rupees.

!# %n appeal shall be preferred to the 2ommissioner !%ppeals# withinthirty days of the receipt of the decision or order passed under section 6(.

!5# $he 2ommissioner !%ppeals# may, upon application in writing by theappellant, admit an appeal after the expiration of the period specified in subsection!# if the 2ommissioner !%ppeals# is satisfied that the appellant was prevented bysufficient cause from lodging the appeal within that period.

-. Pro&!%r! i# $!$. !"# $he 2ommissioner !%ppeals# shall give notice of theday fixed for the hearing of the appeal to the appellant and to the officer of the%uthority against whose order the appeal has been made.

!'# $he 2ommissioner !%ppeals# may adjourn the hearing of the appealfrom time to time.

!)# $he 2ommissioner !%ppeals# may, before the hearing of an appeal,allow the appellant to file any new ground of appeal not specified in the grounds ofappeal already filed by the appellant where the 2ommissioner !%ppeals# is satisfiedthat the omission of the ground from the form of the appeal was not willful orunreasonable.

!# $he 2ommissioner !%ppeals# may stay the recovery of any tax due byvirtue of the decision or order being appealed against and any such order made bythe 2ommissioner !%ppeals# shall remain operative for not more than fifteen daysduring which period a notice shall be issued to the respondent and after hearing theparties, the order staying recovery may be confirmed, varied or vacated as the2ommissioner !%ppeals# deems fit but the stay order so confirmed or varied shallremain operative for not more than sixty days, including any period for which therecovery may have been stayed prior to the confirmation or variation of the stayorder.

!5# $he 2ommissioner !%ppeals# may, before disposing of an appeal, callfor such particulars, documents, records or information as the 2ommissioner!%ppeals# may re/uire respecting the matters arising in the appeal or cause furtherin/uiry to be made by the officer of the %uthority.

. !&iio# i# $!$.!"# In disposing of an appeal lodged under section 6),the 2ommissioner !%ppeals# may pass such order as he thin9s fit, confirming,

varying, altering, setting aside or annulling the decision or order appealed against.!'# In deciding an appeal, the 2ommissioner !%ppeals# may ma9e such

further in/uiry as may be necessary provided that he shall not remand the case forde novo consideration.

!)# $he 2ommissioner !%ppeals# shall not increase the amount of any taxpayable by the appellant unless the appellant has been given an opportunity ofshowing cause against such increase.

!# $he 2ommissioner !%ppeals# shall communicate his order to theappellant and the %uthority.

!5# %n order passed by the 2ommissioner !%ppeals# under subsection !"#shall be passed not later than one hundred and twenty days from the date of filing of


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appeal or within such extended period, not exceeding sixty days, as the2ommissioner !%ppeals# may, for reasons to be recorded in writing, fix.

!6# In computing the aforesaid time period, any period during which theproceedings are adjourned on account of a stay order or proceedings under section6< or the time ta9en through adjournments by the appellant shall be excluded.

!8# Where the 2ommissioner !%ppeals# has not made an order undersubsection !"# before the expiration of one hundred and eighty days from the end ofthe month in which the appeal was lodged, the 2ommissioner !%ppeals# shalltransfer his appeal to the %ppellate $ribunal and the $ribunal shall decide the appealunder this %ct as if it has been filed against the order of the 2ommissioner !%ppeals#.

!=# While transferring the undecided appeal to the %ppellate $ribunal, the2ommissioner !%ppeals# shall attach his comprehensive report explaining thecircumstances and reasons due to which the appeal could not be decided withintime.

!


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!)# $he %ppellate $ribunal may stay the recovery of any tax due by virtueof the decision or order being appealed against and any such order made by the%ppellate $ribunal shall remain operative for no more than thirty days during whichperiod a notice shall be issued to the respondent and after hearing the parties, theorder staying recovery may be confirmed, varied or vacated as the %ppellate

$ribunal deems fit but the stay order so confirmed or varied shall remain operativefor not more than ninety days including any period for which the recovery may havebeen stayed prior to the confirmation or variation of the stay order.

!# In deciding the appeal, the %ppellate $ribunal may, without prejudice tothe powers specified in subsection !'#, ma9e an order to

!a# affirm, modify or annul the order being appealed against; or

!b# remand the case to the officer or the 2ommissioner !%ppeals#for ma9ing such in/uiry or ta9ing such action as the $ribunalmay direct.

!5# $he %ppellate $ribunal shall not increase the amount of any taxpayable, penalty or default surcharge unless the taxpayer has been given areasonable opportunity of showing cause against such increase.

!6# $he %ppellate $ribunal shall communicate its order to the taxpayer andthe 2ommissioner.

!8# &ave as provided in any other law, the decision of the %ppellate$ribunal on an appeal shall be final.

5. !oit of th! t$" %!'$#% 8hi! $!$ i !#%i#/. Where in any appeal,the decision or order appealed against relates to any tax demanded under this %ct,the person who has filed the appeal shall, pending the appeal, deposit the admittedamount of the tax based on the return filed under section )5 or as may bedetermined by the 2ommissioner !%ppeals# or the %ppellate $ribunal where suchreturn has not been filed.

7. At!r#$t! %it! r!otio#.!"# -otwithstanding any other provisions ofthis %ct or the rules, any registered person aggrieved in connection with any disputepertaining to

!a# the liability of the tax against the registered person;

!b# the extent of waiver of default surcharge and penalty;

!c# relaxation of any procedural or technical irregularities and condonation ofany prescribed time limitation; and

!d# any other specific relief re/uired to resolve the dispute, may apply to the%uthority for the appointment of a committee for the resolution of anydispute mentioned in detail in the application.

!'# -otwithstanding anything contained in subsection !"#, the %uthorityshall not accept an application under subsection !"# where criminal proceedingshave been initiated or where the %uthority is of the opinion that the interpretation of a/uestion of law having a larger impact on revenue or on a number of similar cases isinvolved.

!)# $he %uthority may, after examination of the application of a registeredperson, appoint a committee of not less than three persons within thirty days of


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receipt of such application, consisting of an officer of the %uthority not below the ran9of an %dditional 2ommissioner and nominees from the notified panel consisting ofchartered or cost accountants, advocates, representatives of trade bodies orassociations, retired officers of the ran9 of not less than :&'(, retired judges, or anyother reputable taxpayers, for the resolution of the dispute.

!# $he committee constituted under subsection !)# shall examine theissue and may, if it deems fit, conduct an in/uiry, see9 expert opinions, direct anyofficer of the %uthority or any other person to conduct an audit and shall ma9erecommendations to the %uthority within ninety days of its constitution in respect ofthe dispute.

!5# If the committee fails to ma9e recommendations within the said period,the %uthority may dissolve the committee and constitute a new committee whichshall decide the matter within a further period of ninety days and even if after theexpiry of that period the dispute is not resolved, the matter shall be ta9en up beforethe appropriate forum provided under this %ct for decision.

!6# $he %uthority may, on the recommendation of the committee, passsuch order, as it may deem appropriate within fortyfive days of the receipt of therecommendations of the committee.

!8# $he registered person may ma9e payment of the tax as determined bythe %uthority in its order under subsection !6#, and such order of the %uthority shallbe submitted before the forum, %ppellate $ribunal or the 2ourt where the matter ispending adjudication for consideration of orders as deemed appropriate.

CHAPTER X

RECOVER> O; ARREARS

40. R!&o!r3 of $rr!$r of t$". !"# &ubject to subsection !'#, where anyamount of the tax is due from any person, the officer of the %uthority may

!a# deduct the amount from any money owing to the person from whomsuch amount is recoverable and which may be at the disposal or in thecontrol of such officer or any officer of the %uthority;

!b# re/uire by a notice in writing any person who holds or maysubse/uently hold any money for or on account of the person fromwhom tax is recoverable to pay to such officer the amount specified inthe notice;

!c# re/uire by a notice in writing any ban9 to attach that person4s ban9accounts;

!d# seal the person4s business premises till such time as the amount of thetax is paid or recovered in full;

!e# attach and sell or sell without attachment any movable or immovableproperty of the person from whom the tax is due; and

!f# recover such amount by attachment and sale of any movable orimmovable property of the guarantor, person, company, ban9 orfinancial institution where a guarantor or any other person, company,

ban9 or financial institution fails to ma9e payment under suchguarantee, bond or instrument.


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!'# If any arrears of tax, default surcharge, penalty or any other amountwhich is payable by any person cannot be recovered in any manner whatsoever, the%uthority or the 2ommissioner if so authori+ed by the %uthority, may for reasons tobe recorded in writing write off the arrears or amount in the manner in the prescribedmanner.

CHAPTER XI

A?ENTS, REPRESENTATIVES AN E:INTER=EIARIES

41. A/!#t. !"# @or purposes of this %ct and subject to subsections !'# and !)#,the expression Hagent4 in respect of a registered person, means

!a# where the person is an individual under a legal disability, the guardianor manager who receives or is entitled to receive income, financialgains or benefits, funds, money or property on behalf, or for the benefitof, the individual;

!b# where the person is a company !other than a $rust, a Provincial*overnment, or local authority in Pa9istan#, a director or a manager orsecretary or accountant or any similar officer of the company;

!c# where the person is a $rust declared by a duly executed instrument inwriting, whether testamentary or otherwise, any trustee of the trust;

!d# where the person is a Provincial *overnment, or local authority inPa9istan, any individual responsible for accounting for the receipt andpayment of money or funds on behalf of the Provincial *overnment orthe local authority;

!e# where the person is an association of persons, a director or a manager

or secretary or accountant or any similar officer of the association or, inthe case of a firm, any partner in the firm;

!f# where the person is the @ederal *overnment, any individualresponsible for accounting for the receipt and payment of moneys orfunds on behalf of the @ederal *overnment; or

!g# where the person is a public international organi+ation, or a foreigngovernment or political subdivision of a foreign government, anyindividual responsible for accounting for the receipt and payment ofmoneys or funds in Pa9istan on behalf of the organi+ation, government,or political subdivision of the government; or

!h# when any person is expressly or impliedly authori+ed by a registeredperson to be his agent for all or any of the purposes of this %ct.

!'# Where 2ourt of Wards, %dministrator *eneral, fficial $rustee, or anyreceiver or manager appointed by, or under any order of a 2ourt receives or isentitled to receive income on behalf, or for the benefit of any person, such 2ourt ofWards, %dministrator *eneral, fficial $rustee, receiver or manager shall be theagent of the person for purposes of this %ct.

!)# -otwithstanding anything in this section, any registered person mayexpressly or impliedly authori+e another person to be his agent for all or any of the

purposes this %ct.


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42. Li$+iit3 $#% o+i/$tio# of $/!#t.!"# Cvery agent of a person shall beresponsible for performing any duties or obligations imposed by or under this %ct andthe rules on the person, including the payment of the tax.

!'# &ubject to subsection !5# of this section, the tax that by virtue ofsubsection !"#, is payable by an agent of a registered person shall be recoverablefrom the agent only to the extent of any assets of the registered person that are inthe possession or under the control of the agent.

!)# Cvery agent of a registered person who pays any tax owing to theregistered person shall be entitled to recover the amount so paid from the registeredperson or to retain the amount so paid out of any moneys of the registered personthat are in the agent4s possession or under the agent4s control.

!# %ny agent, or any person who apprehends that he may be assessed asan agent, may retain out of any money payable by him to the person on whosebehalf he is liable to pay the tax !hereinafter in this section referred to as theHprincipal4#, a sum e/ual to his estimated liability under this %ct, and in the event ofdisagreement between the principal and such an agent or a person as to the amountto be so retained, such agent or person may obtain from the 2ommissioner acertificate stating the amount to be so retained pending final determination of the taxliability and the certificate so obtained shall be his conclusive authority for retainingthat amount.

!5# Cvery agent shall be personally liable for the payment of any tax dueby the agent if, while the amount remains unpaid, the agent

!a# alienates, charges or disposes of any moneys received oraccrued in respect of wh

Documents

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