Finance Act 2019: CNIC condition for sales tax invoices applicable from August 01

KARACHI: The condition of obtaining CNIC number for unregistered persons at the time of supplies by registered person will be applicable from August 01, 2019.

The condition has been proposed to be applicable from July 01, 2019 through Finance Bill 2019.

However, through Finance Act, 2019 this condition now will be applicable from August 2019.

An amendment has been introduced through Finance Bill 2019 to Section 23 of Sales Tax Act, 1990 under which it was now required specifically to mention particulars on invoices in Urdu or English language. Tax Invoice is also required to reflect CNIC Number of recipient in case supplies are made to unregistered person.

The Finance Bill 2019 also proposed to require a supplier of textile yarn and fabric to mention count, denier and construction, in addition to description, on tax invoice at the time of making taxable supply.

According to commentary on Finance Act, 2019 issued by PwC A F Ferguson Chartered Accountants NTN or CNIC are now required to be mentioned in tax invoice in respect of supply to unregistered persons.

In the Finance Bill 2019, only CNIC was proposed to be mentioned on tax invoice.

Further through Finance Act 2019, such requirements have been made effective from 1st August, 2019.

However, an exception from such requirement has been introduced through the Finance Act for supplies made by a retailer where the transaction value inclusive of sales tax does not exceed rupees fifty thousand, if sale is being made to an ordinary consumer.

The term ‘Ordinary Consumer’ has also been explained in the Finance Act as a person who is buying goods for his own consumption and not for the purpose of re-sale or processing. It has been further provided in the Finance Act that in case it is subsequently proved that CNIC provided by the purchaser was not correct, liability of tax or penalty shall not arise against the seller, in case of sale made in good faith.

(Visited 883 times, 1 visits today)

Leave a Reply

Your email address will not be published. Required fields are marked *