The Federal Board of Revenue (FBR) is likely to extend date for filing of sales tax and federal excise returns up to August 26, 2011. It is learnt that the FBR is seriously reviewing the proposal of the private sector to extend the filing date of sales tax and federal excise returns.
The new format of the return under consideration has yet not to be uploaded on the FBR Web Portal. Therefore, return filing date is expected to be extended up to August 26. The FBR is expected to modify the sales tax returns for incorporating suggestions of the stakeholders, sources said.
According to the feedback of business and trade, the return form under consideration has been strongly criticised particularly condition of the computerised national identity card number (CNIC) and National Tax Number (NTN) on sales to un-registered persons.
When contacted, a tax expert said that if the FBR extends the date of filing of sales tax return, the Sindh Revenue Board (SRB) should also extend the date for filing of return. The new proposed sales tax return form contains controversial provision of submitting NTN or CNIC for sales and purchases made from unregistered persons, which has no legal backing in the Sales Tax Act, 1990. The controversial part of the proposed return are the remarks given at the foot note of annex 'A' and 'C' pertaining to purchase and sales respectively, which suggest that all manufacturers, importers and exporters have been required to record CNIC or NTN for all purchases whether made from registered or unregistered person. There is no legal bar under the Sales Tax Act, 1990 for such compliance.
The FBR, though a couple of years back had proposed amendment to section 23 for requirement of NTN or CNIC, the same was not endorsed/approved by the National Assembly on the pretext that there is already a very narrow tax base and in case of introducing such compulsion, the registered and documented sector simply can't operate.
Therefore, in the absence of the backup legal clause in the Sales Tax Act, such requirement simply becomes arbitrary, unwarranted and unlawful and could not sustain the test of judicial scrutiny. Furthermore, the person registered other than manufacturer, importer and exporter did not mandatorily require provision CNIC and NTN of unregistered buyer/supplier, which creates discriminate treatment as well, tax expert added.