Complex Annexure-H: ST refund claimants unable to file complete returns

21 Dec, 2011

The sales tax refund claimants are unable to completely file their sales tax returns even after a lapse of almost five months due to practical problems in filing of the complex 'Annex-H' of the return. Tax experts told Business Recorder here on Tuesday that the sales tax returns of the refund claimants remain incompletely filed despite passage of many months.
A long time has passed but a large number of taxpayers are unable to file their sales tax return completely with all the required annexures. The Federal Board of Revenue (FBR) during current fiscal year has prescribed a new comprehensive format of sales tax return with different annexures.
Interestingly, each annexure has opened a new debate among the trade, and resultantly FBR was forced to take ad hoc measure like the date of return filing was extended up to October. Amendment in Annex -F and annex-H was required to file within 120 days. However, tax experts reported that taxpayers are yet unable to file annex-H and resultantly their returns from July 2011 remain incomplete.
When Saleem Parekh, a prominent exporter and trade leader, was questioned in this regard, he said that annex-H contains complex information and they can not understand why the FBR is pressing for such minute and petty details. He said that the exporters required specialised accountant and senior production staff to first arrange all details according to the required form and reconcile it with the accounts available with them and then seek advice from sales tax legal expert to file the statement. He questioned that under such tough global business environment whether they should focus on their core business or divert all their attention towards such exercise in futility.
The same question was asked from Arshad Shehzad, a Karachi based prominent tax expert. He contended that no particular format of stock statement is defined in the Sales Tax Act. Hence, in his opinion, if the FBR intends to make the stock statement as integral part of the return then it should be a simple and easy form, so that each and every taxpayer may file without any hassle. He further explained that details of HS code of each and every item, break-up of consumption in exports and local supply and stocks details of zero rated items in his opinion at this stage genuinely create problems. According to his opinion, such detailed information could be sought with annual sales tax return.
Arshad added that the issue of complexity of Annex-H was particularly taken by him on behalf of apparel forum during their meeting with Chairman of FBR in Karachi and he found the Chairman of FBR very much convinced with the demand to simplify the form. However, the issue unfortunately remains unattended and resultantly one of the significant sectors of taxpayers could not file their returns completely.

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