ADJUSTMENT OF CARRIED FORWARD INPUT CREDIT AGAINST UNPAID OUTSTANDING AMOUNT OF TAX (ARREARS)

ADJUSTMENT OF CARRIED FORWARD INPUT CREDIT AGAINST UNPAID OUTSTANDING AMOUNT OF TAX (ARREARS) <!--[if gte mso 10]> ADJUSTMENT OF CARRIED FORWARD INPUT CREDIT AGAINST UNPAID OUTSTANDING AMOUNT OF TAX (ARREARS) By Akhtar Javed, Advocate, Lahore It has been a normal practice that sales tax authority had been allowed adjustment of arrears against carried forward amount of sales tax. The matter was brought to the knowledge of C.B.R. 2. Board vide its Letter C. No. 2(1)STP/97 dated 3-10-2002 has been pleased to observe that such permission/practice of allowing adjustment of arrears against carried forward amount is fraught with chances of liquidating arrears without actual verification as to whether or not carried forward amount claim is correct. C.B.R. has been further pleased to observe that there are chance that input tax might have already been consumed but the carry forward is shown by understating the prices of finished items. 3. C.B.R. vide its above referred letter dated 3-10-2002 had advised all the Collectors of Sales Tax to discontinue such practice of adjustment of arrears against the carried forward amount.