KARACHI: The Federal Budget for the fiscal year 2024-25 has introduced a comprehensive definition of “tax fraud.” The new classification aims to curb the intentional evasion of tax and the acquisition of undue refunds through deceitful means.
The budget outlines tax fraud as the deliberate avoidance of legally owed tax or the pursuit of unwarranted refunds by submitting false returns, statements, or documents, or by concealing accurate information. The definition encompasses a range of illicit activities, including:
(a) suppression of sales or receipts that are chargeable to tax under this Act;
(b) false claim of input tax credit;
(c) making taxable supplies of goods without issuing any tax invoice, in violation of the provisions of this Act or the rules made thereunder;
(d) issuance of any tax invoice without supply of goods leading to inadmissible claim of input tax credit or refund;
(e) evasion of tax by availing undue input tax credit or obtaining inadmissible refund by any means or methods other than that covered under clauses (a) to (d);
(f) collection of any amount as tax but failing to deposit the same in the prescribed manner beyond a period of three months from due date of payment of tax;
(g) falsification or substitution of financial records or production of fake accounts or documents or furnishing of any false information through human, mechanical or electronic means with an intention to evade tax due or claim inadmissible refund;
(h) tampering with or destroying of any material evidence or documents required to be maintained under this Act or the rules made thereunder through human or digital means;
(i) acquisition, possession, transportation, disposal or in any way removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner dealing with, any goods in respect of which there are reasons to believe that these are liable to confiscation under this Act or the rules made thereunder.
Any act or omission mentioned in this clause shall be treated as intentional unless the person accused of tax fraud proves that he had no intention, motive, knowledge, or reason to believe that he was committing a tax fraud.