Islamabad, March 4, 2024 – The Federal Board of Revenue (FBR) took a significant step on Monday by officially notifying a new Standard Operating Procedure (SOP) for granting time extensions under the sales tax law.
This move comes with the issuance of Sales Tax Circular No. 1 of 2024, providing guidelines for the disposal of cases related to the condonation of time limits under Section 74 of the Sales Tax Act, 1990.
Under the newly established SOP, the FBR has outlined a detailed procedure for the disposal of requests from registered persons seeking condonation of time or period under Section 74 of the Sales Tax Act, 1990. The key components of the procedure are as follows:
1. Application Process:
• Registered persons are required to apply to the Commissioner Inland Revenue with jurisdiction for an extension of time or period, clearly specifying the grounds for the delay.
• Requests received directly by the Board will be forwarded to the relevant Commissioner Inland Revenue for necessary action. However, in cases where the Board deems sufficient information is available, it may pass orders without referral.
2. Recommendations by Commissioner Inland Revenue:
• The Commissioner Inland Revenue, after considering the grounds and any additional information, will send categorical recommendations to the Board using a prescribed format.
• The recommendations will cover a checklist including brief facts of the case, reasons for seeking condonation, revenue impact, period to be condoned, and other essential details.
• The Commissioner Inland Revenue must forward recommendations to the Board within fifteen days of receiving the application, or from the date of receiving additional information if requested.
3. Board Examination and Communication:
• Upon receiving recommendations from the Commissioner Inland Revenue, the Board will examine the request and the accompanying recommendations.
• The Board will then communicate its approval or rejection of the request to both the Commissioner Inland Revenue and the applicant.
4. Applicability and Supersession:
• The instructions outlined in the circular are also applicable, mutatis mutandis, for condonation sought under Section 43(2) of the Federal Excise Act, 2005.
• This circular supersedes Sales Tax Circular No. 02 of 2020/IR Operations dated 21.09.2020.
This new SOP aims to streamline and bring clarity to the process of granting time extensions under the sales tax law. The FBR’s proactive approach in introducing such guidelines reflects its commitment to transparency, efficiency, and accountability in tax-related matters. The circular is expected to contribute to a smoother resolution of cases and foster a more predictable regulatory environment for businesses operating under the sales tax law.
