FTO orders FBR to cancel the registration of a textile factory that caught fire in 2007

Dr. Asif Mahmmad Jah, FTO has ordered the Federal Board of Revenue (FBR) to deregister a textile plant in Karachi that was set on fire following Benazir Bhutto’s killing in 2007.

The FTO expressed surprise that despite the statutory limit of 90 days, the deregistration of sales tax had been delayed and had been on hold for more than ten years.

After manufacturing property was looted and set on fire in 2007, the textile plant was forced to shut down, and in 2012, it submitted a deregistration application using the required form, “STR-3.” The Commissioner must issue a deregistration or cancellation order no later than 90 days following the date of the application.

The company submitted a de-registration application in 2008, but the FBR failed to deregister the factory, according to the most recent FTO order, which was released on Wednesday.

According to Section 10(1) of the Federal Tax Ombudsman Ordinance of 2000 (FTO Ordinance), a complaint has been made against the Commissioner-IR RTO-I, Karachi, for failing to cancel the complainant’s registration when the company closed in 2008.

The FTO found that, in violation of section 2(3)(i)(b) & (ii) of the FTO Ordinance, the delay in de-registration of sales tax and leaving it pending for more than 10 years notwithstanding the statutory limit of 90 days constitute “maladministration.”

The FTO has advised the FBR to instruct the Secretary of Jurisdiction FBR to transfer the Complainant’s jurisdiction from RTO-II Karachi to CTO Karachi in accordance with the FBR jurisdiction order dated 20-12-2020 and also in light of the NOC issued by RTO-II Karachi on 15 December 2022 and by CTO Karachi on 22 December 2022. FTO instructed the Chief Commissioner-IR, CTO, Karachi to cancel the complainant’s registration for sales tax in accordance with Rule 11 of the Sales Tax Rules 2006.

Additionally, the FTO has instructed the FBR to assign blame for the Department’s ten years of inaction and to provide a 45-day compliance report.

Written by Aly Bukshi

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