The Federal Board of Revenue (FBR) has instructed all field formations to immediately refer cases of suspected tax fraud to the Directorate of Intelligence & Investigation (Inland Revenue), covering irregularities detected during sales tax assessments, audits, wrongly paid refunds, and recovery processes.
The move follows the issuance of a Standard Operating Procedure (SOP) under Section 37A of the Sales Tax Act, 1990, which empowers authorized officers to investigate tax fraud with the powers of a civil court, including the ability to summon witnesses, collect evidence, and make arrests where applicable. The SOP is intended to ensure investigations are legally sustainable before appellate authorities.
According to the SOP, cases identified during proceedings under Section 11E or other assessments showing evidence of fraud must be referred immediately to the relevant Directorate. The Directorate is required to scrutinize the case within 30 days to determine whether action under Section 37A(1) is warranted. If such action is deemed necessary, the concerned Commissioner is formally notified; if not, the case is returned to the originating office for finalization under Section 11E.
Following inquiry under Section 37A(3) and submission of the report to the Director under Section 37(5), any further investigation under Section 37A(6) must be conducted in strict accordance with Sales Tax General Order No. 2 of 2025.
The FBR said the SOP is aimed at strengthening compliance, expediting action against tax fraud, and maintaining the integrity of tax proceedings nationwide.
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