ISLAMABAD: Federal Board of Revenue (FBR) has been empowered to discontinue gas and electricity connections of any person who is making taxable supplies but not registered for sales tax.
An important amendment has been introduced through Tax Laws (Third Amendment) Ordinance, 2021, which was promulgated through a presidential order on September 15, 2021.
Text of the new Section 14A is:
“14A. Discontinuance of gas and electricity connections._ Notwithstanding anything contained in this Act or any other law for the time being in force, the Board [FBR] shall have power through sales tax general order to direct the gas and electricity distribution companies for discontinuing the gas and electricity connections of any person who falls in the following categories, namely:—
(a) any person, including tier-1 retailers, who fails to register for sales tax purpose, or
Provided that upon registration or integration, as the case may be, of the above said persons, the Board [FBR] shall notify the restoration of their gas or electricity connection through sales tax general order.”
The Section 14 of the Sales Tax Act, 1990 has explained about the registration in detail.
The text of Section 14 is:
14. Registration.— (1) Every person engaged in making taxable supplies in Pakistan, including zero-rated supplies, in the course or furtherance of any taxable activity carried on by him, falling in any of the following categories, if not already registered, is required to be registered under this Act, namely:-
(a) a manufacturer who is not running a cottage industry;
(b) a retailer who is liable to pay sales tax under the Act or rules made thereunder, excluding such retailer required to pay sales tax through his electricity bill under sub-section (9) of section 3;
(c) an importer;
(d) an exporter who intends to obtain sales tax refund against his zero-rated supplies;
(e) a wholesaler, dealer or distributor; and
(f) a person who is required, under any other Federal law or Provincial law, to be registered for the purpose of any duty or tax collected or paid as if it were a levy of sales tax to be collected under the Act.
(2) Persons not engaged in making of taxable supplies in Pakistan, if required to be registered for making imports or exports, or under any provisions of the Act, or any other Federal law, may apply for registration.
(3) The registration under this Act shall be regulated in such manner as the Board may, by notification in the official Gazette, prescribe.”