Withdrawal of CNIC condition: DGDIA’s supply chain integration plan likely to hit a snag

ISLAMABAD: The Directorate General of Digital Invoicing and Analysis (DGDIA) aim to integrate the whole supply chain including manufacturers, dealers, distributors, wholesalers and retailers would face issues due to the withdrawal of the Computerised National Identity Card condition on supplies to unregistered persons.

Sources told Business Recorder that the Directorate-General for Digital Invoicing and Analysis would integrate the sales tax supply chain, but the condition of providing of NIC number has now been restricted in case of supplies by importer/manufacturers to un-registered distributors only under Finance Act, 2022. There are strong chances of misuse of the facility which may hamper the directorate’s exercise for documentation of the entire supply chain including manufacturers, dealers, distributors, wholesalers and retailers.

The government’s decision to create the DGDIA and abolition of the CNIC condition are not inter-linked but against each other.

Supply chain integration: FBR creates new DGDIA

The supply chain has been broken beyond distributors as they are now not bound to provide the CNICs of the remaining supply chain. Thus. it is not clear that how the dream of documenting the entire supply chain would become a reality. Moreover, the basic concept of the creation of the directorate was to integrate the whole supply chain including manufacturers, dealers, distributors, wholesalers and retailers. However, the policy decision of the withdrawal of the CNIC condition has been compromised this documentation measure.

In pursuance of Section 30CA of Sales Tax Act, 1990, a new Inland Revenue field formation namely Directorate General of Digital Invoicing and Analysis, Islamabad was created with its Headquarters at Islamabad.

Director General, DGDIA shall report to the Chairman, FBR through Member (IR-Operations).

Abdul Wahid Uqaily is working as Director General (OPS), DGDIA, Islamabad.

The system will link the sales data of manufacturers, dealers, distributors, wholesalers, and retailers with the FBR’s system. The monthly sales tax information including payments of sales tax would be available to the FBR under the new system. Due to the online availability of data, the evasion of sales tax would not be possible.

The FBR is expected to waive the major condition of monthly filing of sales tax returns and audits for those manufacturers, dealers, distributors, and retailers, who would be linked with the system of the DG Digital Invoicing and Analysis.

In the presence of the availability of online data, the FBR will give concessions to the entire supply chain due to the submission of electronic information on a monthly basis.

Copyright Business Recorder, 2022