The Federal Board of Revenue (FBR) has issued modified sales tax return format for registered persons through issuance of SRO 57(I)/2016 dated August 15, here on Tuesday. According to the details, it is learnt that FBR has brought some amendment in sales tax return form and accordingly in order to give such amendments a legal effect has issued notification 757(i)/2016 dated 15th August 2016 to replace STR-7 (ie sales tax return format) in sales tax rules 2006.
While giving expert opinion on the modified return form, Arshad Shehzad, a prominent Karachi-based Value Added Tax (VAT) expert informed some new legal amendments were brought in the Sales Tax Law and Federal Excise law in Finance Bill 2016-2017 and reporting of sales tax payment by virtue of these amendments were required to be incorporated in sales tax return which seems to be done by the FBR through amendment in sales tax rules 2006.
Highlighting new changes in the sales tax return form, Arshad Shehzad explained that special procedure was introduced for marble and granite for payment of sales tax through electricity bill. Accordingly, a new column 12-A was inserted for reporting by this category of persons. Likewise, option for payment of sales tax liability through turnover bases was inserted for special procedure meant for retailers. Accordingly, a new column 18-A was inserted for reporting of sales tax payment by such retailer.
The FBR has also restricted input tax adjustment on packing material under SRO 1125(i)/2011 for textile sector, accordingly the columns related to inadmissible input tax were also renumbered and reclassify.
Arshad Shehzad has pointed out that annex 'F' pertaining to reporting of stock valuation on monthly bases by persons having carried forward/ excessive input tax credit was not withdrawn in-spite, complaints by the different quarters in recent past. He contends reporting of stock valuation on monthly bases is practically very difficult and it was suggested at different forum that filing of annex 'F' may be restricted on yearly bases. However no such measure is yet taken. The lengthy procedure and unnecessary time consumption on compiling valuation data on monthly bases is adversely affecting taxpayers as well as FBR's effort to keep the procedural compliance simple. It is important to note that in last world bank's report on ease of doing business Pakistan ranking was badly affected due to negative performance on account of law and procedure compliance in the area of General Sales Tax.
"Likewise in his opinion, after requirement for filing of sales tax return by service providers in their respective province, the provision for filing of Annex 'P' is practically become redundant. The FBR needs to revisit provision for filing of Annex 'P' as well," Arshad Shehzad concluded.