Day: July 26, 2020

KARACHI: Federal Board of Revenue (FBR) has been authorized to serve electronic notice and decision as legal document to sales tax registered persons.

In this regard an amendment has been made to Section 56 of Sales Tax Act, 1990 through Finance Act, 2020.

Prior to amendment the FBR was empowered to send electronically through email or to the e-folder maintained for the purpose of e-filing of sales tax-cum-Federal Excise returns by the limited companies, both public and private.

However, through the amendment the FBR has been empowered to send electronic notice or decision to all registered persons.

The serving of electronic notices by the FBR was legalized through Finance Act, 2017.

The section 56 after the amendment shall be:

“Section 56: Service of orders; decisions etc. – (1) subject to this Act , any notice, order or requisition required to be served on a resident individual, other than in a representative capacity for the purposes of this Act shall be treated as properly served on the individual if –

(a) personally served on the individual or, in the case of an individual under a legal disability or a non-residents individual the representative of the individual;

(b) sent by register post or courier service specified in clause (b) of sub-section (2) or to the individual’s usual or last known address in Pakistan;

(c) served on the individual in the manner prescribed for service of a summons under the code of civil procedure, 1908(Act V of 1908); or

(d) sent electronically through email or to the e-folder maintained for the purpose of e-filing of sales tax-cum-Federal excise returns by registered person.

(2) Subject to this Act, any notice order or requisition required to be served on any person, other than a resident individual to whom sub-section (1)applies, for the purposes of this Act, shall be treated as properly served on person if –

(a) personally served on the representative of the person;

(b) sent by registered post or courier service to the person’s registered office or address for service of notices under this Act, in Pakistan or where the person does not have such office or address, the notice is sent by registered [Post to any office or place of business of the person in Pakistan;

(c) served on the Person in the manner prescribed for service of a summons under the code of civil procedure, 1908(Act V of 1908); or

(d) sent electronically through email or to the e-folder maintained for the purpose of e-filing of sales tax-cum-Federal excise returns by registered person.

(3) Where an association of persons is dissolved, any notice, order or requisition required to be served under this Act, on the association or a member of the association may be served on any person who was the principal officer or a member of the association immediately before such dissolution.

(4) Where, business stands discontinued, any notice, order or requisition required to be served under this Act, on the person discontinuing the business may be served on the person personally or on any individual who was the person’s representative at the time of discontinuance.

(5) The validity of service of a notice under this Act shall not be called into question after the notice has been complied with in any manner.“

ISLAMABAD: Federal Board of Revenue (FBR) will get CNIC details of unregistered persons making purchases above Rs100,000 through monthly sales tax return for July 2020 to be filed by registered persons in August 2020.

The registered persons are required to provide details of all those unregistered persons who made purchases above Rs100,000. The information of CNIC of unregistered persons should be provided through sales tax return for the month of July 2020 in August 2020.

Through Finance Act, 2019 the government made it mandatory for sales tax registered persons to provide information of unregistered persons including their CNICs, names and addresses on making supplies above Rs50,000.

However, due to difficulties in implementation the condition was applied from August 2019. But due to dispute between FBR and retailers the implementation of this condition was remained inapplicable.

Through Finance Act, 2020 the limit of purchases by unregistered persons has been enhanced to Rs100,000 effective from July 01, 2020.

Section 23 of Sales Tax Act, 1990 requires the registered persons to provide the details of unregistered persons while issuing tax invoice.

“Section 23. Tax Invoices.– (1) A registered person making a taxable supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars, in Urdu or English language, namely: –

(a) name, address and registration number of the supplier;

(b) name, address and registration, number of the recipient and NIC or NTN of the unregistered person, as the case may be, excluding supplies made by a retailer where the transaction value inclusive of sales tax amount does not exceed rupees fifty thousand, if sale is being made to an ordinary consumer.

Explanation. – For the purpose of this clause, ordinary consumer means a person who is buying the goods for his own consumption and not for the purpose of re-sale or processing:

Provided that the condition of NIC or NTN shall be effective from 1st August, 2019;

(c) date of issue of invoice;

(d) description including count, denier and construction in case of textile yarn and fabric, and quantity of goods;

(e) value exclusive of tax;

(f) amount of sales tax; and

(ff)

(g) value inclusive of tax:

Provided that the Board may, by notification in the official Gazette, specify such modified invoices for different persons or classes of persons;

Provided further that not more than one tax invoice shall be issued for a taxable supply:

Provided also that if 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.

(2) No person other than a registered person or a person paying retail tax shall issue an invoice under this section.

(3) A registered person making a taxable supply may, subject to such conditions, restrictions and limitations as the Board may, by notification in the official Gazette, specify, issue invoices to another registered person electronically and to the Board as well as to the Commissioner, as may be specified.

(4) The Board may, by notification in the Official Gazette, prescribe the manner and procedure for regulating the issuance and authentication of tax invoices.”