ISLAMABAD: The Federal Board of Revenue (FBR) has amended rules related to sales tax de-registration of a person or a company.
The FBR issued SRO 51(I)/2022 dated January 13, 2022 to amend Sales Tax Rules, 2006. Rule 11 of the Sales Tax Rules, 2006 deals with de-registration.
Under this rule, sub-rule (1) every registered person who ceases to carry on his business or whose supplies become exempt from tax, or who ceases to remain registered shall apply to the Commissioner Inland Revenue having jurisdiction for cancellation of his registration, and the Commissioner, on such application or on its own initiative, may issue order of de-registration or cancellation of the registration of such person from such date as may be specified, but not later than ninety days from the date of such applicant or the date all the dues outstanding against such person are deposited by him, whichever is later and such person shall caused to be de-registered through computerized system accordingly.
The FBR made amendment in sub-rule 2 of Rule 11. The sub-rule 2 explains that The Commissioner, upon completion of any audit proceedings or inquiry which may have been initiated consequent upon the application of the registered person for de-registration, shall complete the proceedings or inquiry within ninety days from the date of application and direct the applicant to discharge any outstanding liability which may have been raised therein by filing a final return under section 28 of the Sales Tax Act, 1990:
Provided that the person applying for de-registration shall not be de-registered unless he provides record for the purpose of audit or inquiry.
Through the SRO the FBR inserted sub-rule 2A and 2B to the sub-rule 2.
According to sub-rule 2A: “After receipt of the application for de-registration by the Commissioner Inland Revenue having jurisdiction, the obligation of the registered person to file monthly sales tax return under Section 26 of the Sales Tax Act, 1990 shall remain suspended, until he is de-registered or his application is rejected, as the case may be.”
The sub-rule 2B explains: “Where the Commissioner Inland Revenue desires to conduct audit or inquiry of the applicant to determine his liability, he shall require the applicant, in writing, to provide the requisite records. On receipts of the complete requisite records, entry to this effect shall be made in the computerized system, which shall automatically de-register the applicant on expiry of ninety days thereof, subject to provision of sub-rule (4).”
The sub-rule (4) explains that the obligations and liabilities of the person whose registration is cancelled under sub-rule (1) relating to the period when he conducted business as a registered person shall not be affected by the fact that his registration has been cancelled or that he has ceased to be a registered person.