Karachi, December 16, 2023 – All the sales tax registered persons are required to e-file their returns during tax year 2024.
The Federal Board of Revenue (FBR) in Pakistan has mandated the electronic filing (e-filing) of returns for all sales tax registered persons during the tax year 2024. This move is part of the FBR’s ongoing efforts to modernize tax administration, reduce paperwork, and enhance transparency in the tax system.
The FBR’s directive is outlined in the updated Sales Tax Rules, 2006, specifically under Rule 18. The key points of the rule are as follows:
(1) Electronic Filing of Sales Tax Return: Every registered person who is required to file a return or other statements as per Section 26 or Section 27 of the Sales Tax Act, 1990, or any notification issued thereunder, must file such returns or statements electronically. The manner of electronic filing is to be specified by the Board through a general order. Failure to fill in relevant data or information in any applicable column of the sales tax return renders the return invalid.
(2) Quoting NTN: The rule emphasizes the importance of displaying and quoting the National Tax Number (NTN) in various circumstances, including commercial transactions, cash memos, returns, statements, and other documents required under the ordinance. The e-return, designed in line with Change Request Form(s) (CRFs) and made available on the Board’s web portal, is deemed the prescribed return.
(3) Timely Submission of Data: Registered persons are required to enter data of supplies in Annexure-C and data of Debit or Credit Notes in Annexure-I by the 10th day of the month following the end of the tax period. This data becomes immediately available to the respective registered person (buyer) for use in preparing their return.
(4) Automated System Notifications: The automated system will inform registered persons when their suppliers have filed their monthly sales tax and federal excise returns for the same tax period. This feature aims to ensure timely and accurate reporting, facilitating compliance.
(5) Provisional Adjustments: Provisional adjustments are allowed for input tax credit, output tax, and Credit Note issues, subject to conditions. The automated system will communicate with registered persons, notifying them of any discrepancies and guiding them on necessary actions to rectify issues.
(6) Allowance of Input Tax Credit and Reduction of Output Tax: Input tax credit and reduction of output tax related to withholding of sales tax or Credit Notes will be allowed to registered persons through specific columns in their next return.
(7) Reporting Disallowed Credits: The monthly sales tax and federal excise return will include columns highlighting disallowed input tax credits and reductions of output tax. Registered persons will be advised to contact and persuade their suppliers or buyers to rectify the issues.
(8) Payment of Due Tax: Registered persons filing electronic returns must make payment of any sales tax due in designated branches of the National Bank of Pakistan using the prescribed payment challan (STR-11) or through the electronic payment system devised for this purpose.
(9) Deadline Compliance: In cases where the due date is the 15th of a month, tax due must be deposited by the 15th, and the return must be submitted electronically by the 18th of the same month.
The FBR’s move towards mandatory e-filing is expected to streamline tax processes, reduce manual errors, and contribute to a more efficient and transparent tax administration system in Pakistan. Registered persons are urged to familiarize themselves with these changes and comply promptly to avoid penalties or legal repercussions.
