ISLAMABAD: Federal Board of Revenue (FBR) has directed field offices to conduct desk audit of returns filed for tax year 2020 to cross match turnover for avoiding misuse/mis-declaration.
The FBR on Tuesday said that it had clarified on December 03, 2020 on ‘technical issue in filing of tax return 2020 dated December 03, 2020’ on a communication sent by Lahore Chamber of Commerce and Industry (LCCI).
The LCCI had requested for clarification regarding the treatment of closing stock at the time of change of taxation regime from final to minimum tax.
The FBR said that the chamber had pointed out in case of importers, the tax collected at import stage during tax year 2019 had come final tax at the time of collection, therefore, the turnover or income arising from the disposal of such closing stock should not be included in taxable income for tax year 2020 as this would result in double taxation.
The FBR said that it had examined the matter. “The turnover resulting from disposal of closing stock already declared under Final Tax Regime (FTR) in previous tax year should not make part of next year’s turnover as it would be tantamount to double taxation. Therefore, such turnover should not be declared in the column of ‘subject to NTR [Normal Tax Rate] for tax year 2020.”
The FBR further said: “In order to void misuse/mis-declaration, field formation, are required to conduct desk audit/audit of all such cases for tax year 2020 and cross match turnover with relevant sales tax declarations.”