Option of exclusion: KTBA seeks clarification after issuance of SRO 1190, 2019

Taxpayers are facing immense difficulties as the option of exclusion as provided under SRO 1190(I)/2019 has only been allowed for the taxpayers enlisted in the exclusion list.

In a letter sent to the member IR policy, Karachi Tax Bar Association (KTBA) has sought clarification after issuance of SRO 1190, 2019. It said that practical impediments have been raised after introduction of STRIVe at the time of filing sales tax returns to avail the exclusion from section 8B of the Act read with SRO 1190 of 2019.

The option of exclusion as provided under SRO 1190(I)/2019 has been allowed only to certain taxpayers who are enlisted in the list of exclusion as provided hereunder while, earlier it was provided under SRO 647(I)/2007 in general.

Consequently, the taxpayers who are engaged in multiple businesses or have not updated their tax profiles are not allowed to avail the benefit of the aforesaid exclusion despite the fact that their activity is excluded from Section 8B of the Act.

On the other hand, the situation is further deteriorated as there is no option in the Tax Asaan application for "change in particular", due to which complications have cropped up for taxpayers to update their tax profiles as required.

Presently, the taxpayers are left with no other option but to file an application for change in particulars on the line of previous prescribed procedure whereby a 'No Objection Certification (NOC)' was required to be issued by the concerned Commissioner to the 'Local Registration Office'.

This consumes considerable time. What has been observed that even after updating the tax profile, certain taxpayers, mostly importer, are not getting exclusions from Section 8B.

Furthermore, the letter said that taxpayers did not have clear understanding about the business classification available on IRIS portal while updating the tax profile, taxpayers were unable to select their applicable business category from the IRIS portal as FBR had not provided any guideline about the correct classification of business category of respective businesses. Furthermore the letter requested him to look into matters and make appropriate measures in order to remove anomalies.