The Central Board of Revenue (CBR) is planning to register new sales taxpayers without allocating any specific number, allowing them to carry out all sales tax and income tax-related transactions under a single National Tax Number (NTN). In another landmark decision, the CBR also agreed to permit persons falling under the category of "individuals" to carryout business transactions on the basis of national identity card (NIC) number instead of NTN.
Information Management System (IMS) Member Amir Z.A. Chaudhry told Business Recorder on Saturday that the Board-in-Council has, in principle, agreed to give sales tax registration without any sales tax registration number (STRS) as the NTN would be enough to conduct all the transactions of sales tax and income tax.
Speaking about the salient features of the proposed mechanism, Amir Chaudhry said the new applicants would continue to apply to the Regional Registration Office, and their registrations would be confirmed by the Central Registration Office (CRO) in Islamabad by issuing a certificate (without number) to the applicants concerned.
Once the data is fed into the computers, the department would be able to simultaneously access to sales tax and income tax information clicking the NTN, whereas customs duty would be paid separately.
Amir Chaudhry said the IMS Wing has obtained approval from the sales tax authorities to work out the modalities for the implementation of the plan within 3-4 months. The announcement is likely to be made in the next budget.
The basic idea is to issue sales tax registration without giving number to the fresh applicants to regulate all the income tax and sales tax activities under the NTN regime, he said, adding it is not feasible that a registered taxpayer should simultaneously operate under two different numbers ie the sales tax registration number and the NTN.
There are cases where a person's income tax transaction is not known to the sales tax department. Similarly, the income tax department is unaware about the status of a person registered with the sales tax department. The issue of information matching between the income tax and sales tax would also end after implementation of the decision.
The computerised system will give information about the sales tax and income tax declarations at the same time to the tax authorities without lengthy procedures of obtaining data from each other, he said, adding this means that the NTN will give information about the sales tax status of the taxpayers.
Talking about the second decision, Amir Chaudhry said the CBR is considering providing facility to the 'individuals' to conduct business transactions on the basis of the NIC, and it would be considered as a valid number for depositing challan in the banks. In case the decision is implemented, the 'individuals' would not be required to specify the NTN for depositing the challans.
Th Board-in-Council has also approved this concept, but obviously the department may face some difficulties in the implementation phase, and it would be tested to check its authenticity, he said.
The NTN is basically registration with the tax authorities, which shows that the bona fide credentials of taxpayers are available to the department. The taxpayer could be traced any time on the basis of this information and legal requirements are fulfilled after obtaining the NTN.
The facility will give an opportunity to the persons who are out of the tax-net, but due to any reasons they have to deposit tax in the national kitty. They would be able to deposit tax against the submission of their NIC number checking the phenomenon of "Benami" challans. This will ensure tax collection from persons not registered with the department.
The decision will help the CBR in checking the validity of challans with NIC numbers. But, the persons carrying out multiple businesses have to obtain the NTN and the facility would be exclusively for the category of "individuals." The legal entities like partnership, AOPs, etc would obtain the NTN for depositing of challans.
The IMS member said the CBR would have legal record of all the persons depositing tax and the amount deposited on the basis of NIC numbers.
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