Karachi, July 4, 2024 – The Karachi Tax Bar Association (KTBA) has identified a critical impediment affecting taxpayers’ ability to submit their final sales tax returns following the issuance of SRO 350.
In a formal communication addressed to Ms. Mufeeza Iqbal, Member IT at the Federal Board of Revenue (FBR), KTBA President Syed Zafar Ahmed underscored the urgency of addressing this technical anomaly.
The issue revolves around a new provision introduced under rule 18(3) of the Rules through SRO 350 of 2024, dated March 7, 2024. This amendment stipulates that a buyer’s sales tax return remains provisional until the corresponding seller files their return for the same tax period. If the seller fails to meet this deadline, the IRIS system automatically removes the invoices issued by the non-filing supplier from the buyer’s Annexure “A.”
However, KTBA has flagged a significant technical limitation within the FBR’s portal. Currently, the system prohibits any adjustments within Annexures A and F for provisional returns. Consequently, unsubmitted purchase invoices are automatically excluded from Annexure A at month-end. This action triggers a corresponding reduction in the value of purchases and input tax adjustments within Annexure F.
The resultant negative net value for purchases in Annexure F, coupled with unchanged values for consumption/sold goods, prompts the IRIS system to generate an error message prohibiting the submission of final returns. The message reads “NSTR-Negative Value(s) are not allowed in Annex F or Annex G Or Return,” presenting a substantial hurdle for taxpayers attempting to comply with filing requirements.
In light of these challenges, KTBA President Syed Zafar Ahmed has urgently appealed to the FBR to intervene. Proposed solutions include enabling edits within Annexure F or exploring alternative measures to facilitate the seamless filing of final sales tax returns. Addressing this technical glitch promptly is crucial to alleviating the current difficulties faced by taxpayers grappling with compliance issues.
The KTBA remains committed to collaborating with the FBR to implement necessary reforms that streamline tax filing processes and enhance operational efficiency. As discussions continue, stakeholders await a swift resolution to ensure minimal disruption to businesses and individuals adhering to regulatory obligations.