The Federal Board of Revenue (FBR) has introduced monetary penalties for individuals or entities failing to file their sales tax returns for the Tax Year 2024.
The FBR has updated the Sales Tax Act, 1990, outlining the penalties for non-compliance and emphasizing the importance of timely and accurate return submission.
As per the revised regulations, any person failing to furnish a sales tax return within the stipulated due date will be subject to a penalty of ten thousand rupees. However, there is a provision that offers a degree of leniency; if a person files a return within ten days of the due date, a reduced penalty of two hundred rupees for each day of default will be applicable.
The guidelines for return filing are comprehensively explained in Section 26 of the Sales Tax Act, 1990. This section mandates that every registered person must submit a true, complete, and correct return in the prescribed form to a designated bank or another office specified by the FBR. The return should include details of purchases and supplies made during a tax period, the tax due and paid, and any other information as prescribed.
Furthermore, the Board reserves the right to require specific individuals or classes of persons to submit quarterly or annual returns, as deemed necessary. The introduction of electronic filing options, including web-based platforms and other computer-readable media specified by the Board, aims to streamline the process and enhance efficiency. The Board may issue rules to determine the eligibility of data from electronically filed returns and designate e-intermediaries responsible for digitizing and transmitting the data under their digital signatures.
Section 26 also provides an avenue for registered persons to rectify errors or omissions in their returns. A revised return can be filed within one hundred and twenty days of the original filing date with the approval of the Commissioner Inland Revenue having jurisdiction. However, a waiver of approval is granted if the revised return is submitted within sixty days of the initial filing, and either the tax payable is more than the amount paid or the refund claimed is less than the amount initially stated.
To encourage voluntary compliance, the regulations state that if a registered person files a revised return voluntarily, along with the deposit of any short-paid tax or tax evaded and default surcharge, before receiving an audit notice, no penalty will be imposed.
The regulations also outline specific scenarios for depositing amounts after the issuance of a show cause notice, ensuring that penalties are levied in proportion to the severity of the violation. The goal is to strike a balance between encouraging voluntary correction of errors and deterring intentional tax evasion.
Additionally, the Board has the authority to require specific persons or classes to submit summaries or details related to imports, purchases, and supplies during specific tax periods in a format specified by official Gazette notification.
These stringent measures are part of the FBR’s ongoing efforts to enhance tax compliance and revenue collection, ultimately contributing to the economic development of the country. As businesses and individuals navigate the tax landscape in the Tax Year 2024, adherence to these regulations becomes paramount to avoid financial penalties and legal consequences.
