Islamabad(April 10, 2018): Federal Board of Revenue has approved the tax audit policy 2017. The taxpayer won’t be selected for audit for next two year after once selected.
According to the details, the parameters for selection of the cases for audit in the aforementioned Audit Policy are as follows:
1. Income Tax:
According to section 214C (1A) of Income Tax Ordinance, 2001 the Board shall keep the parameters confidential.
2. Sales Tax:
Following risk parameters have been determined by the Board for selection of cases for audit under Sales Tax: i. The decline in value of supplies is greater than 10% over last year; ii. Consistent decrease in output tax/input tax ratio over last three years; iii. The decrease in the ratio of taxable supplies to total supplies by 10% or more as compared to previous year; iv. Non-filer, nil-filer or null-filer for more than 6 months in the year in case the Registered Person is showing any turnover in income tax return of the corresponding period; v. Manufacturers showing value addition of less than 10%; vi. Where more than 30% purchases are from “unregistered persons”. vii. Where more than 30% sales are to “unregistered persons”. viii. Increase in carrying forward of input tax and reduction in sales by a margin of 10%.
3. Federal Excise Following risk parameters have been determined by the Board for selection of cases for audit under Federal Excise:
i. The decline in value of supplies is greater than 10% over last year; ii. Consistent decrease in output tax/input tax ratio over last three years; iii. The decrease in the proportion of taxable supplies to total supplies by 10% as compared to previous year; iv. Non-filer, nil-filer or null-filer for more than 6 months in the year, in case the Registered Person is showing any turnover in income tax return of the corresponding period; v. Manufacturers showing value addition of less than 10%; vi. Where more than 30% purchases are from “unregistered persons”; vii. Where more than 30% sales are to “unregistered persons”; viii. Increase in carrying forward of input tax and reduction in sales by the margin of 10%. According to FBR press statement, balloting on the basis of such policy would be held shortly.
Cases will be select through the lucky draw for audit.
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