Proceedings for recovery of ISL initiated

RECORDER REPORT

ISLAMABAD: The Federal Board of Revenue has initiated proceedings against employees/taxpayers, who have filed their wealth statements along with income tax returns for Tax Year 2013 to recover the Income Support Levy (ISL).

It is learnt on Wednesday that as per notices issued under section 3 of the Income Support Levy Act 2013, the taxation officer has directed the taxpayers to pay ISL at the rate of the 0.5 percent of the movable assets above Rs 1 million.

The notice also says that the ISL has been upheld by the Supreme Court of Pakistan.

As per information available with this scribe, proceedings for recovery of the ISL have only been initiated by RTO-III Karachi, which exercises jurisdiction over employees generally. When contacted, a tax expert said that the issue of chargeability of the ISL is sub judice before the SHC through various constitutional petitions filed by taxpayers. The hearings are conducted on regular basis and the next date of hearing has been fixed for Feb 24 when Attorney General will give his arguments. The Supreme Court has not upheld the levy but only vacated the interim stay order issued by the SHC in the writ petition number 3575 of 2013.

The notices issued also lose sanctity on the ground that when a matter is sub judice before a Higher Court/Authority then the lower court or authority should not proceed further till the same has been decided by the Higher Court or Authority, tax expert added.

One of the notices issued to the taxpayer said that the filing of return of income and wealth statement for tax year 2013 reveals that Income Support Levy (ISL) due for tax year 2013 has not been paid, despite the fact that taxpayers are liable to pay such levy in line with the following section of the ISL Act 2013. It is being reproduced below for your convenience.

‘Charge of Levy:- subject to the provisions contained in this Act, there shall be charged for every tax year commencing on and from tax year 2013 a levy, in respect of value of net moveable assets held by a person on the last date of the tax year at the rate specified in section 9 and in the manner specified hereunder.”

Through this statutory notice, taxpayer is requested to pay the above said levy, as further specified in Schedule annexed to sub-rule 3 of Rule 6 of Income Support Levy Rules 2013. Please note that non-payment of above noted liability may render you in default and proceeding for charge of default surcharge u/s 6 of the said Act may be initiated accordingly, it said.

Explanation in this regard may be submitted, if required. Provide evidence of payment of this levy on the date of compliance to this notice within 15 days after receipt of this notice, notice said.

Note: It may kindly be noted that FBR’s view as to the charge of ISL has been upheld by the Honourable Supreme Court of Pakistan vide order laid down in Civil Petition No. 1796 of 2013, Abdul Rauf Qazi Officer Inland Revenue added.