ISLAMABAD: The Federal Board of Revenue (FBR) has uploaded the Small and Medium Enterprises (SMEs) return forms for Tax Year 2021 on IRIS portal without sharing the draft of the form with the stakeholders.
Tax experts said that the return form has yet to be prescribed in the Income Tax Rules, 2002 as per section 1000E(2) through SRO.
While SME registration process has not been specified considering Rule 2 of the Fourteenth Schedule.
The SMEs return form has been issued just a month ahead of filing deadline i.e. 30 September 2021.
When contacted, Asif S Kasbati (ICAP Fiscal Laws Committee Member and Pakistan Business Council Core Tax Committee Member), elaborated that the SME concept has been introduced by the Finance Act 2021, which means a person who is engaged in manufacturing and his business turnover in a tax year does not exceed Rs250 million.
If annual business turnover of SME exceeds Rs250 million, it will not qualify as SME in the tax year in which annual turnover exceeds that turnover or any subsequent tax year.
Moreover, he highlighted that a new section 100E has been introduced for special provisions relating to SME for Tax Year 2021 and onwards, whereby the tax payable by SME as defined above will be computed and paid in accordance with rules made under the Fourteenth Schedule.
He pointed out that as per section 100E(2), the FBR is required to prescribe a simplified return for a SME; however, no draft or final SRO has been issued so far (for which tax bars and his office has already informed FBR) but the form has been uploaded on IRIS website without SRO.
Regarding registration as per Rule 2 of the Fourteenth Schedule, he explained that SME is required to be registered with FBR on its Iris web portal or Small and Medium Enterprises Development Authority on its SME registration portal (SMERP).
The SME registration form has not been uploaded on IRIS portal, for which tax bars have also written to FBR.
The registration form is however, available on Smeda website.
In his opinion, the SME registration at Smeda website is also okay, in the absence of the same on IRIS portal.
The electronic return form was issued on 1.7.21; however, Kasbati, stated that the FBR may allow extension considering delay in SRO about manual return forms for individuals, electronic return.
The SME return form (which is yet to be prescribed) though uploaded on IRIS (which is not sufficient as per the Law); manual filing of return Form for AoPs as well as no form for simplified return for retailers having turnover below Rs10 million has been issued like SRO 885 dated 17 September 2020 issued last year.
Copyright Business Recorder, 2021
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