Suspension and Blacklisting

Question 1

When is the registration of a registered person suspended WITHOUT NOTICE? (5)

Answer 1

Where CIR FBR is satisfied that Registered person has:
- issued fake invoices
- evaded tax
- committed tax fraud
- not filed a sales tax return for 6 consecutive months
reg shall be suspended through system without prior notice pending further inquiry

Question 1

When is the registration of a registered person suspended with NOTICE? (8)

Answer 1

1. Non-availability at the given address;
2. Refusal for access to:
   
   • business premises
   • records to authorized Inland Rev Officer
3. Abnormal tax profile: Excessive ITC, continuous c/fs, sudden increase in turnover
4. Substantial purchases from, or supplies to blacklisted/suspended persons
5. On rec of CIR of any other Jurisdiction
6. Any other reason as specified by CIR

Question 2

What are the consequences of suspension of registration (3)

Answer 2

1. No IPT adjustment/refund during sus period

2. No input tax to buyers of supplies by such sus persons (whether tax invoice is prior or during sus)

Question 2

What does CIR do when suspending a person? (10)

Answer 2

1. Within 7 DAYS of issuance of sus order
2. issue showcase notice for opp of hearing (within 15 days of issuance of scnotice)
3. In case SCNOTICE not issued within 7 Days of sus order, Sus order = void ab initio
4. if non-availability of sus person on given address, notice affixed on main notice board of LTU RTO
5. On reply to notice, if CIR is satisfied, suspension is satisfied
6. If offense is confirmed = CIR issues appealable Order for Black Listing, and proceed to take legal and penal action

Question 3

Order of Blacklisting contents (3)

Answer 3

• reason for black listing
• time period for which any ITC shall be inadmissibly claimed by blacklisted or his buyers
• recovery to be paid, penalties to be imposed

Question 4

Black listing order process (6)

Answer 4

1. Issued within 90 DAYS of issuance of notice of hearing
2. If blacklisting order not issued within 90 days, sus becomes void ab initio
3. Copies of black listing order shall be
   - endorsed to the registered person and concerned departments
   - circulated with a computer system-generated list of invoices issued by the blacklisted persons to all:
   -Officers of Inland Revenue
   to enable them to disallow the ITC on basis of invoices issued by the said blacklisted persoms

Question 5

Contents of showcause notice to sus person (4)

Answer 5

SC notice indicates that he will be blacklisted if

• no response to scnote
• does not provide required record
• does not allow business premise/record access
• any other reason by CIR