Author: Hamza Shahnawaz

Section 25 of Sales Tax Act, 1990 has explained commissioner empowered to access sales record.

The Federal Board of Revenue (FBR) issued the Sales Tax Act, 1990 updated up to June 30, 2021. The Act incorporated amendments brought through Finance Act, 2021.

Following is the text of section 25 of Sales Tax Act, 1990:

25. Access to record, documents, etc.– (1) A person who is required to maintain any record or documents under this Act or any other law shall, as and when required by Commissioner, produce record or documents which are in his possession or control or in the possession or control of his agent; and where such record or documents have been kept on electronic data, he shall allow access to the officer of Inland Revenue authorized by the Commissioner and use of any machine on which such data is kept.

(2) The officer of Inland Revenue authorized by the Commissioner, on the basis of the record, obtained under sub-section (1), may, once in a year, conduct audit:

(2A) For the purpose of sub-section (2) of section 25, the Commissioner may conduct audit proceedings electronically through video links, or any other facility as prescribed by the Board.

Provided that in case the Commissioner has information or sufficient evidence showing that such registered person is involved in tax fraud or evasion of tax, he may authorize an officer of Inland Revenue, not below the rank of Assistant Commissioner, to conduct an inquiry or investigation under section 38:

Provided further that nothing in this sub-section, shall bar the officer of Inland Revenue from conducting audit of the records of the registered person if the same were earlier audited by the office of the Auditor-General of Pakistan.

(3) After completion of Audit under this section or any other provision of this Act, the officer of Inland Revenue may, after obtaining the registered person’s explanation on all the issues raised in the audit shall pass an order under section 11.

(5) Notwithstanding the penalties prescribed in section 33, if a registered person wishes to deposit the amount of tax short paid or amount of tax evaded along with default surcharge voluntarily, whenever it comes to his notice, before receipt of notice of audit, no penalty shall be recovered from him:

Provided if a registered person wishes to deposit the amount of tax short paid or amount of tax evaded along with default surcharge during the audit, or at any time before issuance of show cause notice  he may deposit the evaded amount of tax, default surcharge under section 34, and twenty five per cent of the penalty payable under section 33:

Provided further that if a registered person wishes to deposit the amount of tax short paid or amount of tax evaded along with default surcharge after issuance of show cause notice, he shall deposit the evaded amount of tax, default surcharge under section 34, and full amount of the penalty payable under section 33 and thereafter, the show cause notice, shall stand abated.

Explanation.– For the purpose of sections 25, 38, 38A, 38B and 45A and for removal of doubt, it is declared that the powers of the Board, Commissioner or officer of Inland Revenue under these sections are independent of the powers of the Board under section 72B and nothing contained in section 72B restricts the powers of the Board, Commissioner or Officer of Inland revenue to have access to premises, stocks, accounts, records, etc. under these sections or to conduct audit under these sections.

(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

Taxpayers require to retain record of past six years

In a bid to streamline tax compliance and enhance transparency, the Federal Board of Revenue (FBR) has re-emphasized the statutory requirement for taxpayers to retain records for a period of six years.

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Section 23 of Sales Tax Act, 1990 has defined issuing tax invoice must for supplier.

The Federal Board of Revenue (FBR) issued the Sales Tax Act, 1990 updated up to June 30, 2021. The Act incorporated amendments brought through Finance Act, 2021.

Following is the text of section 23 of Sales Tax Act, 1990:

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 particular, 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 one hundred 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

(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.

(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

Record keeping under sales tax act

Section 22 of Sales Tax Act, 1990 has defined record keeping under the act. The Federal Board of Revenue (FBR) issued the Sales Tax Act, 1990 updated up to June 30, 2021. The Act incorporated amendments brought through Finance Act, 2021.

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Following is the complete sections of the Sales Tax Act, 1990 updated up to June 30, 2001 after incorporating changes brought through Finance Act, 2001.

Section 2: Definitions of Sales Tax Act, 1990

Section 3: Chargeability of sales tax at 17% on supply of goods

Section 3B: Overcharging of tax to be deposited in national kitty

Section 4: Zero rated tax under sales tax law

Section 5: Applicable tax rates to be charged under sales tax law

Section 6: Sales Tax Law explains time of payment

Section 7: Determination of tax liability for supplies

Section 7A: Levy and collection of tax on goods

Section 8: Tax credit on certain supplies not allowed

Section 8A: Joint, several liability in tax default

Section 8B: Provision for input tax adjustment

Section 9: Issuance of debit, credit notes on tax adjustment

Section 10: Refund of input

Section 11: Assessment and recovery of tax not levied

Section 11A: Short paid amounts recoverable without notice

Section 11B; Assessment giving effect to an order

Section 11C: Powers of tax authorities to modify orders

Section 13: Sales Tax exemption

Section 14: Sales Tax registration for making supplies

Section 21: De-registration under Sales Tax Act

Section 21A: FBR’s power to issue sales tax Active Taxpayers List

Section 22: Record keeping under sales tax act

Section 23: Issuing tax invoice must for supplier

Section 24: Taxpayers require to retain record of past six years

Section 25: Commissioner empowered to access sales record

Section 25A: IR officer authorized to obtain sample for sales tax

Section 25AA: IR officers may determine fair price in transactions

Section 26: Filing sales tax returns mandatory for registered persons

Section 27, 28 and 29: Filing of special, final returns under Sales Tax Act

Section 30: Appointment of FBR officers for exercising sales tax law

Section 30A: Intelligence officers empowered to exercise sales tax law

Section 30B, 30C, 30D, 30DD, 30DDD: Formation of Directorates under Sales Tax Act

Section 30E: Powers and functions of directorates

Section 31 and 32: Powers, delegation of powers by Inland Revenue officials

Section 32A: FBR authorized to appoint special panels for tax audit

Section 33: Penalty for failure in filing sales tax return

Section 33(2): Penalty for non issuance of sales tax invoice

Section 33(3): Penalty for issuing unauthorized sales tax invoice

Section 33(4): Penalty for failure to notify changes in registration details

Section 33(5): Three-year jail for defaulting sales tax payment

Section 33(6): Penalty for repeated miscalculation in sales tax return

Section 33(7): Imprisonment for selling goods without tax registration

Section 33(8): Penalty for failure to maintain sales tax record

Section 33(9): Up to Rs50,000 penalty for obstructing access to records

Section 33(10): Taxpayers to pay penalty on failure to provide information

section 33(11): Three-year jail for making false statement under tax law

Section 33(12): Imprisonment of 5yrs for denying access to FBR officials

Section 33(13): Imprisonment of five years for fraud under sales tax

Section 33(14): Penalty for violating embargo placed on goods removal

Section 33(15-21): Penalties under Section 33 (15-21) of Sales Tax Act

Section 33(22): Imprisonment for unauthorized access to tax system

Section 33(23): Penalty for selling cigarettes with counterfeit tax stamps

Section 33(24-25): Imprisonment for retailers on tax integration failure

Section 33(26): Penalty on failure to print retail price

Section 33(27): Penalty for bringing goods illegally into Pakistan

Section 33(28): Penalty for denying information sharing

Section 33A: Tax officials may face criminal proceedings under ST Act

Section 34: Default surcharge for failure in timely tax payment

Section 34A: Exemption from penalty and default surcharge

Section 37: Power to order persons to give evidence and produce documents

Section 37A: Commissioner having power to arrest and prosecute

Section 37B: Procedure for IR officers on arrest of person

Section 37C: Special judges may be appointed under Sales Tax Act

Section 37D: Cognizance of offences by special judges

Section 37E: Special Judge to have exclusive jurisdiction

Section 37F: Provisions of code of Criminal Procedure 1898, to apply

Section 37G and 37H: Sales tax cases may be transferred from special court

Section 37I: Tax authorities may appeal against special court order

Section 38: Tax officials authorized to access taxpayers’ premises

Section 38A: IR officials empowered to call for record

Section 38B: Taxpayers require to produce sales records to IR office

Section 40: IR officers empowered for searches under warrant

Section 40B: Deploying IR officers at taxpayers’ premises

Section 40C: IR officers empowered electronic monitoring of taxpayers

Section 40D: Supply of goods from tax exempt areas

Section 40E: Manufacturers require to obtain brand license

Section 45A: Power of the Board and Commissioner to call for records

Section 45B: Filing appeal under Sales Tax Act

Section 46: Filing appeal before Appellate Tribunal IR

Section 47: Making reference against ATIR decision

Section 47A; How to get relief through alternative dispute resolution

Section 48: Recovery of arrears under sales tax law

Section 49: Ownership transfer or termination of taxable activity

section 49A; Commissioner’s power to notify liquidator of company

Section 50: FBR’s powers to make sales tax rules

 Section 50A: FBR may prescribe rules for using computerized system

 Section 50B: FBR may implement electronic scrutiny, intimation

Section 51: No bar or suit against order passed in good faith

 Section 52: Appearance of authorized representative

Section 52A: Persons may be appointed for filing e-return

Section 53: Recovery of tax from estate of deceased person

Section 55: FBR may issue instructions under Sales Tax Act

Section 56: Service of notices, orders under sales tax act

Section 56A: Agreement for the exchange of information

Section 56AB: Real-time access to information and databases

Section 56B: Information exchange under STA should be confidential

Section 56C: Prize scheme on invoices issued by retailers

Section 57: Rectification of mistake in order made by IR officer

Section 58: Tax liability of winding company

Section 58A: Taxpayers allowed to nominate representatives

Section 58B: Liability and obligations of representatives

Section 59: Tax paid on stocks acquired before registration

Section 60: Powers to deliver certain goods without payment of tax

Section 61: Repayment of tax in certain cases

Section 61A: Repayment of tax to registered persons

Section 62: Drawback allowable on re-export

Section 63: Drawback into use between import and re-export

Section 64: FBR may prohibit drawback in case of foreign territory

Section 65: Exemption of tax not or short levied

Section 66: Refund to be claimed within one year

Section 67: FBR to pay additional amount on delayed sales tax refund

Section 67A: Provision to pay sales tax refunds through bonds

Section 68: Liability of the registered person for the acts of his agent

Section 69: Taxpayers can obtain duplicate sales tax documents

Section 70: Computation of limitation period

Section 71: FBR may issue special procedure under sales tax law

Section 72: Obeying FBR’s orders made mandatory

Section 72A: Section 72A of Sales Tax Act

Section 72B: FBR’s computerized selection for audit

Section 72C and 72D: Reward to IR officials, whistleblowers on tax detection

Section 73: Cash transactions above Rs50,000 not admissible

Disclaimer: PkRevenue.com team has endeavored to provide the actual text of the Sales Tax Act, 1990 updated through Finance Act, 2021. However, PkRevenue.com team is not responsible for any error.