The business community is experiencing a number of problems in filing electronic sales tax returns due for the tax period June 2012 because of system limitations. Experts pointed out the need for necessary modifications and amendments in the sales tax returns, urging the authorities to make them easier for the business class, saying that it would help generate more revenue.
A renowned Karachi-based sales tax expert, Arshad Shehzad told Business Recorder here on Wednesday that serious limitations were causing practical problem in filing electronic sales tax returns, which was reported while filing sales tax return for the tax period of June 2012. Among the limitations are: There is no provision/column available for reporting of sales tax paid at import stage by importers on bill of additional duties and challans.
In cases of any valuation dispute the Customs authorities usually cleared consignment on submission of post dated cheque/sureties by importers and marked the case to valuation collectorate to ascertain the correct value. Later on, if the value determined by the valuation department is more than declared value, customs charges differential amount of duties and taxes from the importer by generating manual bill of miscellaneous and additional duties.
However, since the bill is issued manually there is no provision for its reporting in electronic sales tax filing system. Therefore, component of sales tax paid on such bills cannot be claimed in sales tax return as input tax, in spite of legal backing provided under Section 7 of the Sales Tax Act, providing entitlement of input tax adjustment on sales tax paid at customs stage.
Shehzad further said that this year in June the number of such cases were settled being last month of the fiscal, therefore large number of taxpayers are facing problem in reporting such input tax in their sales tax return. He said that system also put limitation on reporting sales during last couple of months. Now, he said, a taxpayer could only report sales pertaining to current tax period ie filing month of sales tax return, the question raises, if the taxpayer fails to report sales of previous months and now intend to report the same in next month though legally he can report by paying default surcharge and penalty u/s 33 and 34, how can system limits or restrain them reporting such sales? The system is simply now allowing such sales the taxpayer can only report through filing of revision of return, which causes undue hassle to the registered persons.
He also pointed out that all such amendments and limitation, prior to introduction of electronic form were publicised through notifications and clarifications, but nothing was observed in update system, which increases confusions. Therefore, there was a dire need for all minor practical modifications and amendments to be publicised properly to timely educate taxpayers and to avoid confusion, he said.
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