Arrest warrants should only be searched for fake cases, flying invoices: FBR

• The arrest warrants should only be sought under certain conditions.
• Sufficient measures taken to prevent abuse: Revenue collector.
• Chairman-appointed Trilateral Committee for the approval of the warrants.

Islamabad: Addressing concerns arising from the business community, the Federal Revenue Council (FBR) has clarified that judge arrest warrants will only be sought in cases of sales tax fraud including fake or flight invoices, The news reported on Tuesday.

Pakistan’s leading businessmen recently met as head of military staff Asim Asim Munir and expressed their concerns about the powers of arrest granted under the Economics of 2025.

After discussions at a high -level meeting of the Special Investment Council (SIFC), it was decided to issue an interpretive circular to mitigate these concerns.

In its circular version on Monday, FBR stated that the arrest warrants in accordance with Article 37A (9) would be obtained mainly in cases of serious sales tax fraud, in particular those related to false or flying invoices.

The circular describes that these warrants will only be issued in accordance with specific conditions, similar to those in subparagraph (8) of Article 37A. These include situations where the defendant can violate the evidence, try to land or not cooperate with investigations despite serving three notifications.

The FBR also assured that a separate general tax order on sales (STGO) will be issued to analyze the procedures, conditions and restrictions on the smooth application of subparagraphs (8) and (9) of Article 37A.

The revenue collector emphasized that sufficient safeguards have been introduced to prevent abuse, requiring multiple approvals both in the stages of research and investigation.

The circular clarified that the purpose of the prosecution in accordance with these provisions is not to recover revenue, but to prevent sales tax fraud. Article 37B was amended to process the procedure after arrest, ensuring that the defendant is submitted to court in accordance with the law and the Criminal Procedure.

In addition, a new submarine (4) has been introduced in Article 37, strengthening the revenue of revenue from the inland to exercise the powers of the Court of Justice in accordance with the Code of Civil Procedure of 1908.

Concerning the arrest warrants in accordance with Article 37A subparagraph (8), the FBB stated that the approval must first be granted by a trilateral committee appointed by the President. These warrants will only be issued in cases where fraud exceeds 50 million Rs and falls into specific categories, including the use of fake documents, false tax claims, issuance of invoices without actual supplies of goods, breach of evidence, taxation or taxation.

Separately, the FBR announced the withdrawal of the federal excise duty (FED) on the distribution and transfer of real estate, which was imposed through the 2024 funding law.

In addition, FBR issued an explanatory circular into the income tax, introducing new clauses in accordance with Article 21 of the Income Tax Decree, 2001. A new clause (Q) excludes 10% of the costs attributed to purchases by suppliers without national tax number (NTN). This provision excludes agricultural products unless they are sold by intermediaries and allows FBR to grant exemptions under certain conditions.

Another new clause stipulates that if the sale of RS200,000 or more is done through a single invoice and the payment is not taken through bank or digital channels, 50% of proportional business costs will be banned. However, cash deposits in the seller’s bank account will be treated as banking channel payments, freeing them from this ban.

In addition, according to the amendments to Article 22, the damping costs for funds will be unacceptable if the withholding of tax liabilities in accordance with Articles 152 or 153 were not fulfilled in the acquisition. The unpaid amount of tax will also be excluded from the cost of the asset for depreciation calculations in the relevant tax year.