ISLAMABAD: Federal Board of Revenue (FBR) has said that buyer’s CNIC (Computerized National Identity Card) detail is now mandatory on the invoice issued by seller for providing service in order avail credit.
The FBR in its explanation of Sales Tax and Federal Excise through Circular No. 01 of 2020, stated the word “services” has been added along with goods to enlarge the scope of disallowance of input tax on account of non-mentioning of CNIC of the buyer by the seller on the invoice as required under section 23 of the 1990 Act.
Resultantly, input tax claimed against goods as well as services shall be disallowed on pro rata basis if supplies have been made to persons without obtaining their CNIC/ NTN subject to the conditions mentioned in the law.
The measure is expected to optimally broaden the sales tax base.
The FBR explained that Following two changes have been made in subsection (7) of Section 3: The expression “by the buyers” has been omitted and after the word “persons” the expression “being purchaser of goods or services” has been added”.
The first change is only clarificatory/consequential, however, the second change enlarges the scope of sales tax withholding by including purchase of services in the ambit of sales tax withholding regime.