Car dealers taking illegal advance tax on top of premium from buyers
Recently, according to the news by Dawn, dealers are claiming illegal advance tax from the customers, on top of high premium rates. FBR is now investigating the dealers of locally assembled cars, who are involved in claiming advance tax, irrespective of the tax paid at the booking time, from the buyers.
It has been reported that after getting the advance tax from the customers, the dealers then get a refund from the tax authorities. On the other hand, the customers, not knowing the fraud, end up paying the advance tax when they get their cars registered because they don’t have any tax receipt as a proof that they have spent the tax to the dealers. Moreover, the non-filers have to pay double amount of advance tax.
Also Read: Toyota Indus cancels more booked cars
Furthermore, it has also been reported that the dealers used to book the car on their names and deposited the advance tax with the manufacturer. When they re-sale the cars, not only do they recover the tax amount, but also charge the high premium from the customers.
It was revealed that the Toyota dealers, in last three years, have booked around 46,000 cars on their name and the cars were sold to customers on premium and advance tax.
Last year, Indus Motor Company began with an awareness campaign against the ‘own money,’ in which they cancelled around 1100 bookings, which were believed to be made by the same dealers.
According to an FBR source, “the total amount collected as advance tax ranges between Rs2bn to a maximum of Rs4bn. However, this is not the actual amount and will confirm it once after sending notices to dealers.”
He further added,
“We are investigating the quantum of illegal refunds, it will be difficult to assess the quantum of premium because it was not documented, and we have asked RTOs to investigate the tax profile of other car brands as well.”
According to the details provided by the regional tax offices, 68% cars are booked on the dealers’ name, with 16,442 and 14,997 respectively.
Car bookings by dealers in other cities are Faisalabad 4121, Multan 3,252, Sargodha 1472, Islamabad 938, Rawalpindi 914, Gujranwala 969, Quetta 827, Hyderabad 649, Abbottabad 513, Peshawar 446, Sahiwal 481, Bahawalpur 292 and Sialkot 201.