The Federal Board of Revenue (FBR) has decided to issue a new sales tax and federal excise return form (2012-2013) for the business community, bringing it in line with changes made through the Finance Act of 2012. Sources told Business Recorder on Sunday that the FBR was also expected to announce a major facilitative measure for extension in date for filing of sales tax return form up to August 30 for the tax period of July 2012.
The decision was taken in view of the upcoming Eid holidays. As new sales tax return form for 2012-13 is yet to be notified by the FBR, therefore, no taxpayer is in a position to file the sales tax return for the tax period of July 2012. Under this situation, FBR is expected to extend the return filing date till the end of August which will also cover the gazette holidays on account of August 14th and Eid vacations notified by the government.
The new sales tax return form has been sent for vetting to the Law and Justice Division and expected to be notified on Monday (August 13). The new sales tax return form has incorporated changes in view of amendments made in the Sales Tax Act 1990 and Federal Excise Act 2005. The announcement of extension in date for filing of returns would also be made along with notification of the new return. The penalty charged and the provisions of the SRO191(I)/2011 would be removed from the new form. The new form is expected to delete provision pertaining to the calculation of inadmissible input tax for furnishing computerised national identity card numbers (CNICs) and National Tax Numbers (NTNs) of unregistered buyers under rescinded SRO191(I)/2011.
A major change in the new form is that the tax treatment of gas supplied to CNG stations is likely to be split into two parts - the tax at standard rate and 9 percent tax to be charged and paid directly by the gas companies. In this way, the gas companies will have to pay the nine percent sales tax instead of getting its adjustment. The change would be brought in line with the Sales Tax Rules. According to the expected amendments in the new sales tax return form, the provision of higher rate up to 22 percent would be deleted from the existing return form. While selecting rates in the return form, the higher rate of 22 percent was likely be selected by the registered persons liable to pay higher rates prior to budget (2012-2013). As all higher rates of sales tax were abolished in the budget, the corresponding amendment in the new return form would be made.
Sources said that the FBR is expected to delete details about the dutiable items on which the Federal Excise Duty (FED) was abolished in budget.
A tax expert said there was no provision/column available for reporting of sales tax paid at import stage by importers on bill of additional duties and challans. In cases of any valuation dispute the Customs authorities usually cleared consignment on submission of post dated cheque/sureties by importers and marked the case to valuation collectorate to ascertain the correct value. Later, if the value determined by the valuation department is more than declared value, customs charges differential amount of duties and taxes from the importer by generating manual bill of miscellaneous and additional duties. However, since the bill is issued manually there is no provision for its reporting in electronic sales tax filing system. Therefore, component of sales tax paid on such bills cannot be claimed in sales tax return as input tax, in spite of legal backing provided under Section 7 of the Sales Tax Act, providing entitlement of input tax adjustment on sales tax paid at customs stage, expert added.