Comrehensive sales tax 7 2-14

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Comrehensive sales tax 7 2-14

  1. 1. Sales Tax
  2. 2. Sales Tax Sr. No Term Definition 1 Title Sales Tax Act 1990 2 Effective With effect from 01-11-1990 3 Levy on Sales, importation, exportation, Production, Manufacture and consumption of Goods 4 Rate 17%
  3. 3. Definitions Sr. No Term Section Definition 1 Appellate Tribunal 2(1) As defined in Income Tax Ordinance 2001 2 Arrear 2(2A) Means, on any day, the amount of sales tax due and payable by a person under the S.Tax Act 1990 before that day but which has not yet been paid 3 Banking Company 2(3AA) As defined in Banking Companies Ordinance 1962 4 BOrad 2(4) FBR
  4. 4. Definitions Sr. No Term Section Definition 5 Company 2(5AA) As defined in companies ordinance 1984 6 Cottage Industry 2(5AB) A manufactures whose Annual turnover does not exceeds Rs. 5,000,000 Annual Utility bills does not exceeds Rs. 700,000 7 Crest 2(6) Means the computerized programs for analyzing and cross matching of sales tax returns. 8 Due Date 2(9) 15th day of the month following the end of the tax period and tax period is a period of one month
  5. 5. Definitions Sr. No Term Section Definition 9 Input Tax 2(14) Input Tax Means 1. The tax levied on the supply of goods to the person. 2. The tax levied on the import of goods 3. Goods or services acquired by the persons, Excise duty levied under Federal Excise Act, 2005 in sales tax mode on manufacture or production of goods or rendering the services 4. The provincial sales tax levied on services rendered or provided to the person 5. Tax levied on supplies in the state of Azad Jammu and Kashmir 10 Output Tax 2(21) Output Tax means 1. Tax levied on supply of goods made by that person 2. Excise duty levied under Federal Excise Act, 2005 in sales tax mode on manufacture or production of goods or rendering the services by the persons 3. The provincial sales tax levied on services rendered or provided by the person
  6. 6. Definitions Sr. No Term Section Definition 11 Retail Price 2(27) A price fixed by the manufacturer inclusive of all duties, taxs other than Sales Tax 12 Sales Tax 2(29) Means 1. The tax, additional tax or default surcharge levied under S.T Act 1990 2. A fine, penalty or fee imposed under S.Tax act 1990 3. Any other sum payable under the provision of said act 13 Supply 2(32) Means 1. Sale or transfer under a hire purchase agreement 2. Use of goods in the course of taxable actuvity 3. Auction or disposal of goods to satisfy a debt owed by a person 4. Possession of taxable goods held immediately before a person ceases to be a registered person
  7. 7. Definitions Sr. No Term Section Definition 14 Tax Invoice 2(40) Means a document rquired to be isued while making taxale supply. Invoice shall contain 1. Serial Number 2. Name, address and reg No of the supplier 3. Name, address and reg No of the recipient 4. Date of issue 5. Description and quantity of goods 6. Value before tax 7. Amount of sales tax 8. Value inclusive of sales tax
  8. 8. Difference Between Exempt and Zero rated Supply Sr. No Point Exempt Supply Zero Rated Supply 1 Taxability Not taxable Taxable 2 Registration under sales tax Act Not Required Required 3 Credit of Input Tax Not Allowed Allowed 4 Maintenance of records under sales Tax act Not Required Compulsory 5 Filing of Return Not Required Required
  9. 9. Sales Tax Authorities
  10. 10. Sales Tax Authorities (1) There shall be the following Sales Tax authorities for the purposes of this Act and rules made hereunder, namely:— 1. Chief Commissioner Inland Revenue (CCIR); 2. Commissioner Inland Revenue (CIR); 3. Commissioner Inland Revenue (Appeals); 4. Additional Commissioner Inland Revenue; 5. Deputy Commissioner Inland Revenue; 6. Assistant Commissioner Inland Revenue; 7. Inland Revenue Officer; 8. Inland Revenue Audit Officer; 9. Superintendent Inland Revenue; 10. Inspector Inland Revenue; and 11. Officer of inland Revenue with any other Designation
  11. 11. Sales Tax Authorties Sr. No Tax Authorities Subordinate to 1 Chief Commissioner Commissioner Appeals Federal Board of Revenue 2 Commissioner Chief Commissioner 3 • • • • • • • • Additional Commissioners Deputy commissioners Assistant Commissioners Inland Revenue Officer Inland Revenue Audit Officer Superintendents Auditors Inspectors Commissioner 4 • • • • • • • Deputy commissioners Assistant Commissioners Inland Revenue Officer Inland Revenue Audit Officer Superintendents Auditors Inspectors Additional Commissioners
  12. 12. Computation of Sales Tax Liability Sr No Description 1 Output Tax on •Taxable Supplies •Zero rated supplies •Supply to DTRE registered Person •Exempt supplies (not taxable) xxx xxx xxx - Less Input Tax •Taxable imports •Taxable supplies •Tax paid on utilities •Zero rated purchases •Exempt purchases xxx xxx xxx xxx - 2 3 Sales Tax for the Tax Period (1-2) 4 Add Arrear of tax Default surcharge Penalties Rs 5 Less Input tax carried forward from previous tax period Unclaimed input tax from six pervious tax years Net Tax Liabilty for the tax period (5-6) (XXXX) XXXX xxx xxx xxx Total Tax (3+4) 6 XXXX XXXX XXXX xxx xxx XXXX XXXX
  13. 13. Computation of Sales Tax Liability Note: According to section 8B(1) a registered person can claim credit of input tax maximum upto 90% of output tax for a tax period. Under such a case, if input tax is more than the output tax even then a registered person has to pay 10% of output tax.
  14. 14. RETURNS
  15. 15. RETURNS (1) Every registered person shall furnish not later than the due date a true and correct return in the prescribed form to a designated bank or any other office specified by the Board, indicating the purchases and the supplies made during a tax period, the tax due and paid and such other information, as may be prescribed: Provided that the Board may, by notification in the official Gazette, require any person or class of persons to submit return on quarterly basis: Provided further that the Board may, by notification in the official Gazette, require any person or class of persons to submit such return as may be prescribed annually in addition to the monthly return or quarterly return: Provided also that the return filed electronically on the web or any magnetic media or any other computer readable media as may be specified by the Board shall also be deemed to be a return for the purpose of sub-section (1) and the Board may, by notification in the official Gazette, make rules for determining eligibility of the data of such returns and e-intermediaries who will digitize the data of such returns and transmit the same electronically under their digital signatures.
  16. 16. RETURNS (2) If there is a change in the rate of tax during a tax period, a separate return in respect of each portion of tax period showing the application of different rates of tax shall be furnished. (3) A registered person may, subject to approval of the 1Commissioner Inland Revenue having jurisdiction, file a revised return within one hundred and twenty days of the filing of return under sub-section (1) or, as the case may be, sub-section (2), to correct any omission or wrong declaration made therein. (4) Notwithstanding the penalties prescribed in section 33, if a registered person wishes to file revised return voluntarily along with deposit of the amount of tax short paid or amount of tax evaded along with default surcharge, whenever it comes to his notice, before receipt of notice of audit, no penalty shall be recovered from him:
  17. 17. RETURNS (5) The Board may, by notification in the official Gazette, require any person or class of persons, for any goods of such description or class, to furnish such summary or details or particulars pertaining to the imports, purchases and supplies during any tax period or periods, in such format as may be specified.
  18. 18. Special Returns. In addition to the return specified under section 26-(a) a person registered (***) under this Act shall furnish special return within such date and in such form indicating information such as quantity manufactured or produced, purchases made, goods supplied or payment of arrears made, etc, for such period as the Board may, by a notification in official gazette, specify; and (b) the commissioner may require any person whether, registered or not, to furnish a return (whether on his own behalf or as an agent or trustee) in a prescribed form and such person shall furnish the return not later than the date specified in this regard.
  19. 19. Final Return If a person applies for de-registration in terms of section 21, he shall before such de-registration, furnish a final return to the 1commissioner in the specified form in such manner and at such time as directed by the commissioner.
  20. 20. Offences and penalties
  21. 21. Offences and penalties Whoever commits any offence described in column (1) of the Table 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 penalty mentioned against that offence in column (2) thereof
  22. 22. Offences and penalties Sr. No Offences Penalty Section of the Ordinance to which offence has reference 26 Where any person fails to furnish a return within the due date. Such person shall pay a penalty of five thousand rupees: Provided that in case a person files a return within fifteen days of the due date, he shall pay a penalty of one hundred rupees for each day of default. Any person who fails to issue an invoice when required under this Act. Such person shall pay a penalty of five thousand rupees or three per cent of the amount of the tax involved, whichever is higher. 23 1 2
  23. 23. Offences and penalties Sr. No Offences Penalty Section of the Ordinance to which offence has reference 3 Any person who unauthorizedly issues an invoice in which an amount of tax is specified. Such person shall pay a penalty of ten thousand rupees or five per cent of the amount of the tax involved, whichever is higher. 3,7,23 4 Any person who fails to notify the changes of material nature in the particulars of registration of taxable activity. Such person shall pay a penalty of five thousand rupees. 14
  24. 24. Offences and penalties Sr. No Offences Penalty Section of the Ordinance to which offence has reference 5 Any person who fails to deposit the amount of tax due or any part thereof in the time or manner laid down under this Act or rules or orders made there under. Such person shall pay a penalty of ten thousand rupees or five per cent of the amount of the tax involved, whichever is higher: Provided that, if the amount of tax or any part thereof is paid within fifteen days from the due date, the defaulter shall pay a penalty of five hundred rupees for each day of default: Provided further that no penalty shall be imposed when any miscalculation is made for the first time during a year: Provided further that if the amount of tax due is not paid even after the expiry of a period of sixty days of issuance of the notice for such payments by an officer of 1Inland Revenue, not below the rank of Assistant 2Commissioner Inland Revenue, the defaulter shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to three years, or with fine which may extend to amount equal to the amount of tax involved, or with both. 3,6,7,48
  25. 25. Offences and penalties Sr. No Offences 6 Any person who repeats erroneous calculation in the return during a year whereby amount of tax less than the actual tax due is paid. 7 Any person who is required to apply for registration under this Act fails to make an application for registration before making taxable supplies. Penalty Such person shall pay a penalty of five thousand rupees or three per cent of the amount of the tax involved, whichever is higher. Such person shall pay a penalty of ten thousand rupees or five per cent of the amount of tax involved, whichever is higher: Provided that such person who is required to get himself registered under this Act, fails to get registered within sixty days of the commencement of taxable activity, he shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to three years, or with fine which may extend to an amount equal to the amount of tax involved, or with both. Section of the Ordinance to which offence has reference 7,26 14
  26. 26. Offences and penalties Sr. No Offences 8 Any person who fails to maintain records required under this Act or the rules made there under. Penalty Such person shall pay a penalty of ten thousand rupees or five per cent of the amount of tax involved, whichever is higher. Section of the Ordinance to which offence has reference 22,24
  27. 27. Offences and penalties Sr. No Offences 9 Where a registered person who, without any reasonable cause, in non compliance with the provisions of section 25, — (a) fails to produce the record on receipt of first notice; (b) fails to produce the record on receipt of second notice; and (c) fails to produce the record on receipt of third notice. Penalty Section of the Ordinance to which offence has reference 25 such person shall pay a penalty of five thousand rupees; such person shall pay a penalty of ten thousand rupees; and such person shall pay a penalty of fifty thousand rupees.
  28. 28. Offences and penalties Sr. No Offences 10 Any person who fails to furnish the information required by the Board through a notification issued under subsection (5) of section 26. Penalty Section of the Ordinance to which offence has reference 26 Such person shall pay a penalty of ten thousand rupees.
  29. 29. Offences and penalties Sr. No 11 Offences Any person who,— (a) submits a false or forged document to any officer of sales tax; or (b) destroys, alters, mutilates or falsifies the records including a sales tax invoice; or (c) Knowingly or fraudulently makes false statement, false declaration, false representation, false personification, gives any false information or issues or uses a document which is forged or false. Penalty Section of the Ordinance to which offence has reference Such person shall pay a penalty of twenty five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher. He shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to five years, or with fine which may extend to an amount equal to the loss of tax involved, or with both. 2 (37) and General
  30. 30. Offences and penalties Sr. No Offences Penalty Section of the Ordinance to which offence has reference 12 Any person who denies or obstructs the access of an authorized officer to the business premises, registered office or to any other place where records are kept, or otherwise refuses access to the stocks, accounts or records or fails to present the same when required under section 25, 38 38A or 40B. Such person shall pay a penalty of twenty five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher. He shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to three years, or with fine which may extend to an amount equal to the amount of tax involved, or with both. 25, 38 38A or 40B.
  31. 31. Offences and penalties Sr. No Offences Penalty Section of the Ordinance to which offence has reference 13 Any person who commits, causes to commit or attempts to commit the tax fraud, or abets or connives in commissioning of tax fraud. Such person shall pay a penalty of twenty five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher. He shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to five years, or with fine which may extend to an amount equal to the loss of tax involved, or with both. 2 (37)
  32. 32. Offences and penalties Sr. No Offences Penalty Section of the Ordinance to which offence has reference 14 Where any person violates any embargo placed on removal of goods in connection with recovery of tax. Such person shall pay a penalty of twenty five thousand rupees or ten per cent of the amount of the tax involved, whichever is higher. He shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to one year, or with fine which may extend to amount equal to the amount of tax involved, or with both. 48
  33. 33. Offences and penalties Sr. No Offences Penalty Section of the Ordinance to which offence has reference 15 Any person who obstructs the authorized officer in the performance of his official duties. Such person shall pay a penalty of twenty five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher. 31 and general 16 Any person who fails to make payment in the manner prescribed under section 73 of this Act. Such person shall pay a penalty of five thousand rupees or three per cent of the amount of tax involved, whichever is higher. 73
  34. 34. Offences and penalties Sr. No Offences Penalty Section of the Ordinance to which offence has reference 17 Any person who fails to fulfil any of the conditions, limitations or restrictions prescribed in a Notification issued under any of the provisions of this Act. Such person shall pay a penalty of five thousand rupees or three per cent of the amount of tax involved, whichever is higher. 71 and General 18 Where any officer of Sales Tax authorized to act under this Act, acts or omits or attempts to act or omit in a manner causing loss to the sales tax revenue or otherwise abets or connives in any such act. Such officer of Inland Revenue shall be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to three years, or with fine which may extend to amount equal to the amount of tax involved, or with both. General
  35. 35. Offences and penalties Sr. No Offences Penalty Section of the Ordinance to which offence has reference 19 Any person who contravenes any of the provision of this Act for which no penalty has, specifically, been provided in this section. Such person shall pay a penalty of five thousand rupees or three per cent of the amount of tax involved, whichever is higher. General 21 Where any person repeats an offence for which a penalty is provided under this Act Such person shall pay twice the amount of penalty provided under the Act for the said offence General
  36. 36. Offences and penalties Sr. No Offences Penalty Section of the Ordinance to which offence has reference Any person who,(a) knowingly and without lawful authority gains access to or attempts to gain access to the computerized system; or (b) unauthorizedly uses or discloses or publishes or otherwise disseminates information obtained from the computerized system; or (c) falsifies any record or information stored in the computerized system; or (d) knowingly or dishonestly damages or impairs the computerized system; or (e) knowingly or dishonestly damages or impairs any duplicate tape or disc or other medium on which any information obtained from the computerized system is kept or stored; or (f) unauthorizedly uses unique user identifier of any other registered user to authenticate a transmission of information to the computerized system; or (g) fails to comply with or contravenes any of the conditions prescribed for security of unique user identifier. Such person shall pay a penalty of twenty-five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher. He shall, further be liable, upon conviction by the Special Judge, to imprisonment for a term which may extend to one year, or with fine which may extend to an amount equal to the loss of tax involved, or with both.”; 50 A
  37. 37. REGISTRATION Under this Act, registration will be required for such persons and be regulated in such manner and subject to rules as the Board may, by notification in the official Gazette, prescribe.
  38. 38. De-registration, blacklisting and suspension of registration.— (1) The Board or any officer, authorized in this behalf, may subject to the rules, de-register a registered person or such class of registered persons not required to be registered under this Act. (2) Notwithstanding anything contained in this Act, in cases where the 1Commissioner is satisfied that a registered person is found to have issued fake invoices or has otherwise committed tax fraud, he may blacklist such person or suspend his registration in accordance with such procedure as the Board may, by notification in the official Gazette, prescribe.
  39. 39. REGISTRATION, COMPULSORY REGISTRATION AND DE-REGISTRATION Application. — The provisions of this Chapter shall apply to the following persons, namely:-(a) a person required to be registered under the Act; (b) a person required, under any other Federal law or Provincial law, to be registered for the purpose of any duty or tax collected or paid as if it were sales tax under the Act; (c) a person who is subject to compulsory registration; (d) a person who is already registered and requires a change in the name, address or other particulars of registration; (e) a person who is blacklisted or whose registration is suspended; and (f) a person who is required to be de-registered.
  40. 40. Requirement of registration The following persons engaged in making of taxable supplies in Pakistan (including zero-rated supplies) in the course or furtherance of any taxable activity carried on by them, if not already registered, are required to be registered in the manner specified in this Chapter, namely:-(a) a manufacturer not being a cottage industry;] (b) a retailer whose value of supplies, in any period during the last twelve months exceeds five million rupees; (c) an importer; (d) a wholesaler (including dealer) and distributor; (e) a person required, under any other Federal law or Provincial law, to be registered for the purpose of any duty or tax collected or paid as if it were a levy of sales tax to be collected under the Act and (f) a commercial exporter, who intends to obtain sales tax refund against his zero-rated supplies.
  41. 41. Application for registration. (1) A person required to be registered under the Act shall, before making any taxable supplies, apply to the CRO, through electronic means as provided by the Board or otherwise, through owner, member or director, as the case may be. Such application shall be made in the Form STR-l, as annexed to these rules, transmitted to the CRO electronically or through registered mail or courier service. Such application will specify the Collectorate in whose jurisdiction the registration is sought, as per criteria given below, namely:-(a) in case of a corporate person, that is, a listed public limited company or an unlisted public limited company or a private limited company, the area where the registered office is located; (b) in case of a person not incorporated, the area where the business is actually carried on; and (c) in case of a person not incorporated, having a single manufacturing unit, whose business premises and manufacturing unit are located in different areas, shall apply for registration in the Collectorate of the area in whose jurisdiction his manufacturing unit is located: Provided further that a corporate person shall have the option to apply for transfer of registration to the Collectorate having jurisdiction where the place of business is located.
  42. 42. Application for registration. (2) Where an applicant has unsold or un-used stocks of tax-paid Inputs on which he desires to claim the benefit of section 59 of the Act, he shall declare such stocks in a statement in the Form set out as STR4, to be appended with his application for registration. (2a) CRO may cause further inquiry from the applicant through LRO or otherwise including issuance of Objection Slip. (3) On completion of such verification or inquiry, through LRO or otherwise, as the CRO deems necessary, it may register the applicant and issue a certificate of registration containing the registration number of the applicant in the Form as set out in the Form STR-5, or reject the application within fifteen days from the date complete application is received in the CRO, under intimation to the applicant, specifying the reasons for such rejection. (4) A person who has applied for registration as manufacturer shall be registered after LRO has verified his manufacturing facility. (5) In no case, a person required to be registered under the Act shall be issued more than one registration number.
  43. 43. Compulsory registration (1) if a person, who is required to be registered under this Act, does not apply for registration and the LRO or any other office as may be authorized by the Board or the Collector, after such inquiry as deemed appropriate, is satisfied that such person is required to be registered, it shall issue notice to such person in the Form set out in the Form STR-6. (2) In case the LRO receives a written reply from the said person within the time specified in notice, contesting his liability to be registered, the LRO shall grant such person opportunity of personal hearing, if so desired by the person, and shall thereafter pass an order whether or not such person is liable to be registered compulsorily. Copy of the said order shall invariably be provided to that person. (3) Where the person to whom a notice is given under sub-rule (2), does not respond within the time specified in the notice, the LRO shall transmit the particulars of the person to the CRO, which shall compulsorily register the said person and allot him a registration number which shall be delivered to the said person either in person through LRO or through registered mail (acknowledgement due) or through courier service.
  44. 44. Compulsory registration (4) A person registered compulsorily as aforesaid, is required to comply with all the provisions of the Act and rules made thereunder from the date of compulsory registration, and in case of failure to do so, the Collector of Sales Tax having jurisdiction may issue notice under section 25 of the Act for production of records or documents and appearance in person to assess the amount of sales tax payable under section 11 of the Act, and take any other action as required under the law against such person: Provided that if it is subsequently established that a person was not liable to be registered but was wrongly registered under .this rule due to inadvertence, error or misconstruction, the CRO, shall cancel his registration. In case of such cancellation of registration, such person shall not be liable to pay any tax, default surcharge or penalty under the Act or rules made thereunder, subject to the conditions, limitations and restrictions prescribed under section 3B of the Act.
  45. 45. Change in the particulars of registration. (1) In case there is a change in the name, address or other particulars as stated in the registration certificate, the registered person shall notify the change in the 23[Form STR-l] to the CRO, within fourteen days of such change. (2) The change of business category as 'manufacturer' shall be allowed after LRO has verified the manufacturing facility and confirmed the status as industrial consumer of the electricity and gas distribution companies. (3) In case of approval of the change applied for, the CRO shall issue revised registration certificate, which will be effective from the date the concerned person has applied for the change.
  46. 46. Transfer of registration (1) The CRO may, subject to such conditions, limitations or restrictions as it may deem fit to impose, by an order, transfer the registration of a registered person from the jurisdiction of one Collectorate to another Collectorate or, as the case may be, to the LTU or RTO. (2) On transfer of registration,-(a) all the records and responsibilities relating to such registered person shall be transferred to the Collectorate or, as the case may be, to the LTU or RTO, in whose jurisdiction the registration has been so transferred; (b) notwithstanding the actions already taken, being taken or otherwise pending immediately before the transfer in respect of such registered person under any of the provisions of the Act or the rules made thereunder in the Collectorate from where his registration has been transferred, the Collectorate, or as the case may be, the LTU or RTO, in whose jurisdiction the registration is so transferred shall exercise the jurisdiction over such person in the manner as if it always had such jurisdiction and]
  47. 47. Transfer of registration (c) the return for the tax period in which the registration is transferred shall be filed in the Collectorate from where the registration is transferred. (3) In case of transfer of registration, the CRO shall issue intimation letter to the registered person along with copy to concerned Collectorates, or as the case may be the Large Taxpayers Unit or RTO. (4) In case a registered person intends to shift his business activity from the jurisdiction of one Collectorate to another, or he has any other valid reason for such transfer, he shall apply to the CRO for transfer of his registration along with Form STR-I. The CRO shall follow the procedure as per sub-rules (2) and (3).
  48. 48. Option to file application with LRO. The person applying for registration, changes in particulars of registration or transfer of registration, may, in exceptional cases where he is not able to send such application directly to CRO, file the prescribed application in LRO, instead of filing the same in CRO. In such case LRO shall forward the same to CRO within three days and the Collector concerned shall ensure that such application is transmitted to CRO within the stipulated
  49. 49. De-registration. (1) Every registered person who ceases to carry on his business or whose supplies become exempt from tax, shall apply to the LRO for cancellation of his registration in Form STR-3, and the LRO, on such application or on its own initiative may recommend to the CRO to cancel the registration of such person from such date as may be specified, but not later than three months from the date of such application or the date all the dues outstanding against such person are deposited by him, whichever is the later
  50. 50. De-registration. (2) A registered person whose total taxable turnover during the last twelve months remains below the limit specified in rule 4, may apply to the LRO for de-registration in Form STR-3 or the Collector may, on his initiative, start proceedings for his de-registration. (3) The Local Registration Office, upon completion of any audit or inquiry which may have been initiated consequent upon the application of the registered person for de-registration, shall direct the applicant to discharge any outstanding liability which may have been raised therein by filing a final return under section 28. (4) If a registered person fails to file tax return for six consecutive months, the LRO may, without prejudice to any action that may be taken under any other provision of the Act, after issuing a notice in writing and after giving an opportunity of being heard to such person, recommend to the CRO for cancellation of the registration after satisfying itself that no tax liability is outstanding against such person. (5) The obligations and liabilities of the person whose registration is cancelled under sub-rule (1) relating to the period when he conducted business as a registered person shall not be affected by the fact that his registration has been cancelled or that he has ceased to be a registered person.
  51. 51. Blacklisting and suspension of registration (1) Where the Collector has reasons to believe that a registered person is found to have committed tax fraud or evaded tax or has failed to deposit the tax due on his supplies despite having recovered it from the respective buyers or recipients of such supplies, he may suspend his registration through an order in writing and initiate such inquiry, as deemed appropriate. (2) After such inquiry and investigation to confirm the facts and veracity of the information and after giving an opportunity to such person to clarify his position, the Collector, if satisfied that such person has committed any of the offences as aforesaid, may blacklist such person through an order in writing, and such blacklisting shall be without prejudice to any other action that may be taken against such person under the Act and the rules made there under.
  52. 52. Blacklisting and suspension of registration (3) The inquiry in such cases shall be completed within ninety days, and show cause notice for recovery of any evaded amount of tax and for contravention of the provisions of the Act may be issued within the period specified under section 36 of the Act: Provided that where the records required for completion of the inquiry are not produced by the blacklisted person or a person whose registration has been suspended or by the suppliers of such person, the period of ninety days for completion of the inquiry shall be deemed to have been extended by a further period of ninety days,
  53. 53. Blacklisting and suspension of registration (4) The order for blacklisting or suspending the registration of a registered person shall be communicated to such person, the CRO and to the Central Sales Tax database provided for this purpose. (5) During the period of suspension of registration, the invoices issued by such person shall not be entertained for the purposes of sales tax refund or input tax credit, and once such person is blacklisted, the refund or input tax credit claimed against the invoices issued by him, whether prior or after such blacklisting, shall be rejected through a self-speaking appealable order and after affording an opportunity of being heard to such person.

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