*-*-* Tax adjudicating authorities: DG I&I Inland Revenue unearths unique case of wrong order *-*-* Directorate General of Intelligence and Investigation Inland Revenue (IR) has unearthed a unique case involving wrong order by the tax adjudication authorities, who failed to charge sales tax on supply of chicken fat oil to soap manufacturers. The directorate has saved huge revenue by detecting the case where adjudication authorities deliberately interpreted the law to favour suppliers of chicken fat oil. The directorate of intelligence IR intervened and brought to the light the legal position to save government from huge revenue loss. The issue is mainly related to the imposition of the sales tax on supply of chicken fat oil. Legally, the chicken fat oil is exempt when it is used as an ingredient of poultry feed and consequently, chicken fat oil is taxable when it is put to other uses like ingredient in making soap or additive to cooking oil. The show cause notices were served on two suppliers of chicken fat oil to soap manufacturers where sales tax was not deposited on supplies made by them. The adjudication authorities vacated the show cause notices on the argument that chicken fat oil is the ingredient of poultry feed and their supply is exempted from sales tax under Sales Tax Act, 1990. The agencys officials pinpointed that the chicken fat oil is exempt if used as a poultry-feed-ingredient, and taxable in other uses. The taxpayers failed to produce any evidence during adjudication proceedings that they had made any sales of chicken fat oil to any poultry feed industry. The sales tax would be charged on the supply of chicken fat oil to soap manufacturers. Courtesy: Business Recorder Vanquo - Turning Vision into Value..
Posted on: Sat, 01 Feb 2014 08:52:14 +0000
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