Restriction imposed by FBR: Traders facing issues while filing sales tax returns

ISLAMABAD: The importers and traders are facing serious technical problems in filing of sales tax returns due to restrictions imposed by the Federal Board of Revenue (FBR).

Leading sales tax experts told Business Recorder that the restriction in reporting of supplies in sales tax returns against the H.S. code available in purchases made during the last twelve months has created serious problems in the smooth filing of sales tax returns by the importer and traders. A large number of traders are unable to file their monthly sales tax returns.

According to the details, FBR has placed a restriction on reporting of supplies only with those H.S. codes which were imported/ purchased during the last twelve months in their electronic sale tax return filing system.

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The restriction was introduced last year through the sales tax general order (STGO) 13 of 2022; however, traders have not faced any problem in filing annex ‘C’ in their sales tax return at that time.

It seems some system checks have been placed in the electronic filing system this month and therefore traders have facing problems in filing their annex ‘C’ this month.

Upon seeking opinion, renowned tax export Arshad Shehzad explained the law has rightly introduced to curtailed element of misreporting and the chances of fake invoices through a change in description/ HS code of items which are not available to their stock.

The step is; therefore, in the right direction to introduce proper check and balance and reduced the revenue leakages cause due to inadmissible input tax adjustment.

On the other hand, he suggested the limitation of the time period of twelve months placed in the system is incorrect and illegal. The law does not provide any such time limitation in the referred STGO nor does it make any sense. The traders may have old stocks of over the years.

This reporting problem is more related to the restriction of the time limit of twelve months rather than the other conditions of the STGO.

He suggested FBR should take note of this issue and rectify the implementation problem in their electronic system to remove the technical glitches due to which a large number of traders could not file their returns timely.

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