ISLAMABAD (June 22 2003) : To facilitate corporate sector, the Central Board of Revenue (CBR) has laid down criteria for companies to avail exemption from 'additional' tax and penalty on non-payment of Corporate Assets Tax, says Income Tax circular 4/2003 issued here on Saturday.
The companies depositing principal amount of Corporate Assets Tax would not be liable to pay additional tax/penalty notified through amendment in the Corporate Assets Tax law vide Finance Ordinance 2003, while detailed procedure has been explained in the said circular.
The CBR would consider withdrawal of penalty and additional tax in cases where Corporate Assets Tax return is filed along with payment of tax due during July 1-September 30, 2003, both days inclusive, for example, a return filed prior to July 1, 2002 and the tax due under sub-section (5) is paid between July 1-September 30, 2003, both days would be inclusive.
Similarly, cases will be considered where a company withdraws pending appeal, rectification or revision filed and the tax due stands paid by June 30, 2003, or is now paid by September 30, 2003, and a company has not filed an appeal, revision or rectification under sub-section (10) against an order passed under sub-section (6) and has paid the tax due under sub-section (5) by September 30, 2003.
According to the circular, Corporate Assets Tax is a one-time levy chargeable under Section 12 of Finance Act, 1991 (XII of 1991) and is payable by a company as defined in the Companies Ordinance, 1984, on the value of fixed assets as per balance sheet drawn between 30.6.1991 and 30.6.1992, both days inclusive.
Where a company, liable to pay Corporate Assets Tax, has not furnished a return and has failed to pay the due tax within prescribed time, it is liable to penalty under sub-section (7) and additional tax under sub-section (8) of Section 12.
The companies which could not comply with the law have been offering to pay the principal amount of tax provided penalty and additional tax were not charged.
The demand appeared genuine since amounts of penalty and additional tax worked out to manifold of the principal amount of tax.
In order to mitigate genuine hardship of the corporate sector, necessary amendments have been made in the Corporate Assets Tax law by inserting sub-sections (8A) and (8B).
Through the Finance Act, 2003, an opportunity to avoid penalty and additional tax has been provided to the companies where:
(i) no order under sub-section (6) has been passed and the Corporate Assets Tax return is filed along with payment of tax due under sub-section (5) during July 1 and September 30, 2003, both days inclusive;
(ii) a return was filed prior to 01.07.2003 and the tax due under sub-section (5) is paid between 1st of July and 30th of September, 2003, both days inclusive;
(iii) a company withdraws pending appeal, rectification or revision filed under sub-section (10) and the tax due under sub-section (5) stands paid by 30th June, 2003 or is now paid by 30th September, 2003; or
(iv) a company has not filed an appeal, revision or rectification under sub-section (10) against an order passed under sub-section (6) and has paid the tax due under sub-section (5) by 30th September, 2003.
As provided in the newly inserted sub-section (8B), any amount of penalty or additional tax paid by June 30, 2003 shall not be refunded.
