The Federal Board of Revenue (FBR) has mandated that state-owned enterprises (SOEs) must resolve their tax-related disputes through the Alternate Dispute Resolution Committees (ADRCs). This requirement was formalized through the issuance of S.R.O. 1377(I)/2024, which amends the Income Tax Rules, 2002.
According to the new rules, SOEs are required to seek resolution via ADRCs for any tax-related dispute, regardless of the amount involved. If an SOE is dissatisfied with a tax decision, it must apply to the FBR for the formation of a committee to address the issue.
The process for resolution begins when any individual or group, including SOEs, submits a written application for alternate dispute resolution to the FBR, using the prescribed form outlined in the Schedule of the amended rules.
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The FBR will establish a panel to handle these disputes, consisting of retired Inland Revenue Service officers (BS-21 and above), chartered accountants, cost and management accountants, advocates with at least ten years of experience in taxation, and reputable businesspeople. The eligibility criteria for panel members are specified in Part II of the Schedule.
The committee will receive administrative support from the designated member of the panel. Once formed, the committee may seek additional data, expert opinions, or conduct inquiries and audits as necessary. The committee must reach a decision within 45 days of its formation, with an option to extend this period by an additional 15 days if necessary, provided reasons for the delay are documented.
The committee’s decision is binding on the Commissioner of Inland Revenue only if the applicant agrees with the outcome and formally withdraws any ongoing appeals in courts or appellate authorities. This withdrawal must be submitted in the specified form within 60 days of receiving the committee’s decision. If the withdrawal is not communicated within this timeframe, the decision will not be binding on the Commissioner.
Once the committee’s decision is received, the applicant is required to pay any taxes as determined. Any relevant tax orders will be modified to align with the committee’s ruling.
Each member of the committee will receive a one-time remuneration of PKR 100,000 for their services, which will be paid by the FBR from its budget within 15 days of the committee’s decision.
