In a move to enhance flexibility and adaptability within the tax framework, Section 71 of the Sales Tax Act, 1990, grants authority to the Federal Board of Revenue (FBR) to prescribe special procedures for the payment and submission of documents.
The provision, updated up to June 30, 2021, through the Finance Act, 2021, allows the FBR to specify unique procedures related to tax scope, registration, bookkeeping, invoicing requirements, and returns for designated supplies. This initiative aims to facilitate smoother compliance and administrative processes tailored to specific categories of supplies, fostering efficiency within the taxation system.
The specific text of Section 71 is outlined as follows:
71. Special procedure.— (1) The Board may, by notification in the official Gazette, prescribe special procedure for the scope and payment of tax, registration, bookkeeping, and invoicing requirements and returns, etc. in respect of such supplies as may be specified therein. (3) Notwithstanding anything contained in this Act or any other law for the time being in force or any decision of any court, the trade enrollment Certificate Schemes immediately in force before the commencement of the Finance Act, 1999, shall be deemed to be validly made under this Act.
Key components and implications of Section 71 include:
1. FBR’s Discretionary Power: Section 71 vests discretionary power in the Federal Board of Revenue, allowing it to prescribe special procedures through notifications published in the official Gazette. This discretionary authority enables the FBR to respond dynamically to the evolving needs of the taxation landscape and specific requirements associated with designated supplies.
2. Scope and Payment of Tax: The provision explicitly mentions that the special procedures may cover a range of aspects, including the scope and payment of tax. This flexibility allows the FBR to tailor procedures to the unique characteristics and challenges posed by different categories of supplies.
3. Registration, Bookkeeping, and Invoicing: In addition to tax-related matters, Section 71 empowers the FBR to specify special procedures related to registration, bookkeeping, invoicing requirements, and returns. This comprehensive approach ensures that the prescribed procedures address multiple facets of compliance and administrative processes.
4. Deemed Validity of Trade Enrollment Certificate Schemes: Subsection (3) of Section 71 includes a provision stating that the trade enrollment Certificate Schemes in force before the commencement of the Finance Act, 1999, shall be deemed to be validly made under the Sales Tax Act, 1990. This recognition ensures continuity and validity for existing schemes, providing a seamless transition under the amended legislation.
The inclusion of Section 71 in the Sales Tax Act, 1990, reflects a commitment to facilitating compliance and administrative processes by allowing for tailored procedures for specific supplies. The discretionary power granted to the FBR acknowledges the need for adaptability in taxation practices and ensures that procedures remain responsive to the diverse requirements of different sectors.
Stakeholders in the business and taxation sectors are encouraged to stay informed about any notifications issued by the FBR under Section 71, as these could introduce special procedures impacting the compliance and administrative aspects of designated supplies.
