Karachi, November 19, 2023 – The Federal Board of Revenue (FBR) has issued a directive advising taxpayers to maintain comprehensive records of purchases and supplies throughout the tax year 2024.
In line with the updated Sales Tax Act of 1990 for the upcoming tax year, the FBR emphasizes that registered taxpayers are obligated to uphold records at their registered business premises. Section 22 of the Sales Tax Act outlines the specific requirements for record-keeping, designed for audit purposes by tax authorities.
Under Section 22 of the Sales Tax Act, registered individuals engaged in taxable supplies are mandated to maintain records in either English or Urdu at their business premises or registered offices. These records should allow for the easy determination of their tax liability during a tax period. The specified records include details of goods purchased, imported, and supplied, encompassing zero-rated and exempt supplies.
Key components of the required records are:
• Descriptions, quantities, and values of goods sold, along with the recipient’s name and address.
• Details of goods purchased, including descriptions, quantities, values, supplier information, and applicable taxes.
• Information on imported goods, indicating descriptions, quantities, values, and taxes paid.
• Records of zero-rated and exempt supplies.
• Double-entry sales tax accounts.
• Invoices, credit notes, debit notes, bank statements, and other relevant financial documents.
• Documentation related to gate passes, inward or outward transport receipts.
• Electronic versions of the aforementioned records.
Additionally, the FBR may, through official notifications, specify the number of business bank accounts to be used by registered persons for purchase and sale transactions, as well as the payment of due taxes. The directive also allows the FBR to prescribe procedures or software for electronic record maintenance, filing of sales tax returns or refunds, and other related matters.
Registered persons whose accounts are subject to audit under the Companies Ordinance, 1984, are required to submit annual audited accounts, accompanied by a certificate from auditors certifying the payment of due taxes. The FBR retains the authority to specify additional record-keeping requirements for specific classes of taxable persons or entities.
