Unregistered sellers can''t recover GST from buyers: FBR

To stop practice of charging sales tax from costumers by un-registered outlets, the Federal Board of Revenue (FBR) has asked the general public to check whether the sellers/suppliers of goods, collecting sales tax from customers on purchases, are registered with the sales tax department.
When contacted, a senior FBR official said that the customer is not required to pay 17 percent sales tax to seller/supplier who fails to show his sales tax registration number on invoices/receipts.
The FBR has issued a clarification to the general public through a sales tax circular number 2 of 2019 here on Thursday. The FBR has further asked the general public (customers) to see invoices/receipts having Sales Tax Number (STRN) on the invoices/receipts on purchase of goods and services to confirm whether the supplier is registered with the sales tax department.
According to the FBR, it has been observed that in many cases, suppliers of goods and services are charging sales tax on invoices/receipts without identifying their Sales Tax Registration Number (STRN) on the ''Invoices/Receipts'' issued to the customers. At times, National Tax Number (NTN) is indicated on invoices, to exhibit that the supplier is registered. Customers are suggested to ask for invoices/receipts having Sales Tax Number (STRN) on the invoices/receipts on purchase of goods and services. sales tax can only be recovered from the customer if the supplier is registered for sales tax purposes, and reflects the Sales Tax Registration Number (STRN) on the invoice/receipt issued to the customer. In other cases, the supplier is not entitled to recover sales tax from the customers. Customers should beware of the same.
This clarification is being issued for the reason that many suppliers are charging Sales Tax from customers without getting themselves registered under the Sales Tax regime. This practice is against the law and is liable to penal action. This practice leads to increase in prices and undue enrichment of sellers without any deposit of tax with the government.
Customers are suggested to seek invoices/receipts from supplier with STRN on the invoices / receipts issued, if Sales Tax is charged on their purchases, FBR said.
It is further clarified that buyer is not required to provide his CNIC in case of purchases from a person not registered for sales tax. It is also clarified that in case of purchase of third schedule items, which are subject to sales tax on the basis of retail price and on which retail price along with sales tax is legibly and indelibly printed or embossed, the sales tax on the same is deposited by the manufacturer or importer. In case of such items, STRN may not be required if the same are purchased from a retailer, the FBR added.