ISLAMABAD: The Federal Board of Revenue (FBR) Thursday rejected some reports in the press which stated that FBR was collecting advance from banks and paying 15 percent markup on it to add to its revenue collection.
It is hereby clarified that the FBR has not taken any advance from the banks and compensation is being paid in only those cases where Appellate Tribunal, High Court and Supreme Court have set aside demand created and collected by FBR in the past, FBR clarifies in a statement issued here.
It further clarified that many of these cases had not attained finality, however, compensation was being paid as per Income Tax Ordinance, 2001.
It said these cases pertain to the period 1991 to 2012 and compensation paid was subject to 35% income tax, thus the effective rate was 9.75 percent and not 15 percent.
For future, FBR has decided that in such cases if refund is created as a result of decision of an appellate authority, the Commissioner must immediately file an application seeking stay order along with the appeal against the appellate order.
It further stated that if stay order was not granted or the order has attained finality the decretal amount must be settled within three months of the order and this would ensure that such a problem does not arise in future.