The Federal Board of Revenue has decided to make it mandatory for the telecommunication companies to provide province-wise break-up of services which would enable the federal tax authorities to determine the share of each province regarding sales tax collected on these services.
In this connection, the FBR amended the sales tax and federal excise return form here on Thursday for proper distribution of sales tax among all four provinces on services provided by telecom companies. According to the FBR, to facilitate taxpayers, streamline refund process and simplify certain procedures, few amendments in monthly Sales Tax and Federal Excise return are being made. The amended return, effective from July, 2011, is being placed on FBR website for feedback from taxpayers/stakeholders, FBR added.
Sources told Business Recorder that a new annex titled as "Annex-P" is provided in the new return form in which the registered person will provide province-wise break-up of services rendered which will be initially applicable to telecommunication companies and may be extended to other similar sectors on need basis. It will help in implementing the decision made by federal and provincial governments for handling the services provided across the provinces.
The telecom companies would be required to give information about province-wise value of services and sales tax charged on the basis of province from where outbound (outgoing) call is made. Instead of introducing an entirely separate return for telecom sector, an annexure has been introduced in the existing sales tax and federal return form. This data would enable the FBR to determine the share of each province regarding sales tax collected on telecom services, sources added.
As per new return form, on the basis of required information, the tax paid by the service provider (telecom companies) will be proportionately distributed among the provinces. The tax share will be credited to the designated account of the provinces which will be reflected in the Main Page of the ST&FE Return, on computerised payment receipt (CPR) as well as in the bank scroll, FBR added.
Sources said that the FBR has abolished rate-wise summary reflecting different rates of 16 percent, 18 percent, zero-percent etc. Now, the computerised system would itself compute rate wise summary. The rate wise summaries will not be required to be prepared by the registered persons. Therefore, it will reduce the data entry work of the registered persons.
Separate column for short-shipment or exported goods has been introduced, through which the registered person will be able to feed the details of short-shipment. It will help in automatic processing of refund claims in expeditious manner. Now the registered persons will not be required to feed every import or export information, whereas the same will be automatically made available by the IT system in the sales tax and federal excise. However, the registered persons will be able to add new line of information where the import/export data could not be automatically brought into the return.
Sources said that a stock statement has also been made part of the ST and FE return through an Annex, therefore, the refund claimants will not be required to submit the stock statement separately for the refund claims. The return has also been suitably amended for giving treatment to the tax charged at reduced rate which provides the facility to the taxpayers to offset the tax charged at reduced rate and payable upfront from the refund claimed in the return.
Sources said that the provision of supplying National Tax Number (NTN) and computerised national identity card number (CNIC) has been made in both sales and purchase annexure, so that the registered persons should be able to provide complete identification of sellers and buyers in form of NTN or CNIC.
Now, the registered person will provide the invoice by invoice information instead of providing invoice summaries in the returns and then supplying invoice by invoice information in the refund claim. It would facilitate the taxpayers as the registered person would not be required to add up all the invoices and then provide summary information through invoice summary.
The new return form said that all sales shall be recorded by providing any one of the CNIC or NTN of the buyer irrespective of whether sold to a registered person or un-registered person, it is mandatory for manufacturers, importers and exporters. Other registered persons are encouraged to provide these details but they may issue the bulk invoices to un-registered persons with NTN, all the invoices may be grouped by Sale Type and Tax Rate.
The invoices count will be entered in column "Document Number" and "Document Date column will be blank in this case. If an invoice contains items pertaining to multiple rates or multiple types; then multiple rows with same Invoice Type, Invoice No/HS Code & Date will be written by the taxpayer in this Annexure by providing Sale Type, Rate, Value, Sales Tax and Tax Withheld separately. If an invoice contains items pertaining to Goods and Services both, then write two separate rows giving details separately where possible, FBR said.
Sources said that a separate annex has been introduced for providing details of sales tax arrears by the registered persons. After introducing, separate annexure for the purposes referred above, the FBR has provided all options for every type of registered person to be covered through a single return form. It is to be noted that the registered person will fill the relevant annexure only instead of filling all the annexure, sources added.