The Provincial Value Added Tax (VAT) Act 2010 has empowered the federating units to register, suspend/cancel VAT registration of any taxpayer operating within their jurisdiction. Sources told Business Recorder here on Thursday that the Federal Board of Revenue (FBR) would have the legal authority to enforce Provincial VAT Act for effective collection of the levy from July 1, 2010.
The Provincial VAT Act has specified the jurisdiction of the FBR with respect to power and duties. The board will administer and enforce the Provincial VAT Act and will have the power to carry out any duty or function in this connection.
For the purposes of collecting the payable tax under the Provincial VAT Act, all provisions of the Federal Value Added Tax Act, relating to registration and cancellation; collection, payment and enforcement of tax, determination of value of supply, deductions for input tax, increasing and decreasing tax adjustments, calculation and assessment of tax, including a fine, default surcharge, penalty or fee imposed under that act or any other sum payable under the provisions of that act or rules made there under will apply.
Integration of Federal and Provincial VAT: The input tax, paid under the Federal Value Added Tax Act or under a Provincial Value Added Tax Act, will be deductible against the tax payable in accordance with the provisions of the Federal Value Added Tax Act and Provincial VAT Act. The Board will collect the tax payable under this act in such a way as to ensure that the Provincial VAT and Federal VAT operate together as an integrated regime. Once the Provincial VAT Act is enforced, the Sales Tax Act, 1990 would be repealed automatically.
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