Un-registered recipient/buyer: suppliers need not mention NTN or CNIC number on ST invoice

A major budgetary measure to broaden the tax base has been dropped in the amended Finance Bill (2009-10) due to practical difficulties in obtaining National Tax Numbers (NTNs) and computerised national identify cards (CNICs) numbers of unregistered buyers through sales tax invoices. Sources said the amendment in sales tax invoice was also proposed in budget (2008-09) which was dropped.
The same proposal has again been taken up with the government in budget (2009-10), that was rejected by the government. This amendment was proposed in section 23 of the Sales Tax Act, 1990 requiring the supplier of taxable goods to mention the NTN or CNIC number on tax invoice in case of un-registered recipient/buyer. Similar provision was also introduced in section 18 of the Federal Excise Act, 2005. However, this proposal was withdrawn through amended Finance Bill (2009-10).
According to sources, it is almost impossible for the small taxpayers to specify the NTNs/CNICs in cases of supplies made to the un-registered buyers/recipients. It is not possible for small units to provide data of un-registered buyers who purchased goods.
The proposal is practicable in case the condition is being made mandatory only for manufactures. Similarly, the FBR should implement the decision in a phased manner. In the first phase, the condition may be made compulsory in cases of supplies made to un-registered units by the Large Taxpayer Units.
The units registered with the LTUs have the IT capacity to document the data for supplies made to both the registered and un-registered persons. In the next phase, the condition be made mandatory for the medium taxpaying units and later for small taxpayers in a systematic manner.
A registered person is required to give name, address and registration number of the recipient of the supplies in the tax invoice. However, if the supply is made to unregistered person then the tax invoice does not contain any specific information regarding the recipient of the supply; hence, unregistered person cannot be traced out.
In order to trace the unregistered recipients of supplies and to broaden the tax net, it was proposed that the details of NTN or CNIC number, in case of unregistered recipients, may also be incorporated in the tax invoice, by amending clause (b) of sub-section (1) of section 23 of the Sales Tax Act, 1990.