The Sales Tax Act, 1990, is a law that governs the taxation of goods and services in Pakistan. The Act was amended in 2021 to include a new section, Section 14A, which empowers the Federal Board of Revenue (FBR) to discontinue the electricity and gas connections of any person who is making taxable supplies but not registered for sales tax.
This new provision was introduced in response to the growing problem of non-compliance with sales tax laws in Pakistan. The FBR estimates that billions of rupees in sales tax revenue are lost each year due to non-compliance.
Section 14A of the Sales Tax Act, 1990, applies to any person who is making taxable supplies but is not registered for sales tax. This includes tier-I retailers, who are defined as persons who make taxable supplies of goods or services to consumers in the course or furtherance of a business.
If a tier-I retailer is not registered for sales tax and is making taxable supplies, the FBR may direct the relevant gas and electricity distribution company to discontinue the retailer’s electricity and gas connections.
The FBR may take this action after giving the retailer a reasonable opportunity to comply with the law. If the retailer fails to comply with the law within the specified time, the FBR may discontinue the retailer’s electricity and gas connections.
The discontinuation of electricity and gas connections is a serious matter. It can have a significant impact on a retailer’s business. Retailers who are not registered for sales tax should take steps to register with the FBR as soon as possible to avoid the risk of having their electricity and gas connections discontinued.
What are the consequences of having your electricity and gas connections discontinued?
If your electricity and gas connections are discontinued, you may face a number of consequences, including:
- Loss of business: If you are unable to operate your business due to the lack of electricity or gas, you may lose customers and revenue.
- Financial hardship: You may have to pay for alternative sources of power, such as generators, which can be expensive.
- Legal action: The FBR may take legal action against you for non-compliance with the law. This could result in fines or even imprisonment.
How can I avoid having my electricity and gas connections discontinued?
There are a number of things you can do to avoid having your electricity and gas connections discontinued, including:
- Register for sales tax: If you are making taxable supplies, you must register for sales tax with the FBR.
- Pay your sales tax: You must pay your sales tax on time.
- Comply with the law: You must comply with all applicable laws, including the Sales Tax Act, 1990.
By taking these steps, you can help to ensure that your electricity and gas connections are not discontinued.