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Tag: Sales Tax Act 1990

  • Sales Tax Act 1990: FBR may appoint special panels for audit

    Sales Tax Act 1990: FBR may appoint special panels for audit

    KARACHI: Federal Board of Revenue (FBR) has been empowered under sales tax law to appoint special audit panels for conducting audit of any registered person.

    The updated Sales Tax Act, 1990 issued by the FBR, the Section 32A explains the powers of the revenue body for appointment of special audit panels.

    Section 32A: Audit by Special Audit Panels

    Sub-Section (1): The Board may appoint as many special audit panels as may be necessary, comprising two or more members from the following, –

    (a) an officer or officers of Inland Revenue;

    (b) a firm of chartered accountants as defined under the Chartered Accountants Ordinance, 1961 (X of 1961);

    (b) a firm of cost and management accountants as defined under the Cost and Management Accountants Act, 1966 (XIV of 1966); or

    (d) any other person as directed by the Board,

    to conduct audit of a registered person or persons, including audit of refund claims and forensic audit and the scope of such audit shall be determined by the Board or the Commissioner Inland Revenue on a case-to-case basis. In addition, the Board may, where it considers appropriate, also get such audit conducted jointly with similar audits being conducted by provincial administrations of sales tax on services.

    Sub-Section (2): Notwithstanding that records of a registered person have been audited by an officer appointed under section 30, the Board or a Commissioner may direct special audit panel appointed under sub-section (1) to audit the records of any registered person.

    Sub-Section (3): Every member of special audit panel appointed under sub-section (1), shall have the powers of an officer of Inland Revenue under sections 25, 37 and 38.

    Sub-Section (4): Each special audit panel shall be headed by a chairman who shall be an officer of Inland Revenue.

    Sub-Section (5): If any one member of the special audit panel, other than the chairman, is absent from conducting an audit, the proceedings of the audit may continue and the audit conducted by the special audit panel shall not be invalid or be called in question merely on the ground of such absence.

    Sub-Section (6): The Board may prescribe rules in respect of constitution, procedure and working of special audit panel.

  • Sales Tax Act 1990: return filing requirement by registered persons

    Sales Tax Act 1990: return filing requirement by registered persons

    KARACHI: A sales tax registered person is required to file true and correct sales tax return on monthly basis by providing details of supplies and persons whom the supplies were made during the period.

    According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), the Section 26 explained the requirement of filing sales tax return by registered persons.

    Section 26: Return

    Sub-Section (1): Every registered person hall furnish not later than the due date a true and correct return in the prescribed form to a designated bank or any other office specified by the Board [FBR], indicating the purchases and the supplies made during a tax period, the tax due and paid and such other information, as may be prescribed;

    Provided that the Board may, by notification in the official Gazette, require any person or class of persons to submit return on quarterly basis:

    Provided further that the Board may, by notification in the official Gazette, require any person or class of persons to submit such return as may be prescribed annually in addition to the monthly return or quarterly return:

    Provided also that the return filed electronically on the web or any magnetic media or any other computer readable media as may be specified by the Board shall also be deemed to be a return for the purpose of sub-section (1) and the Board may, by notification in the official Gazette, make rules for determining eligibility of the data of such returns and e-intermediaries who will digitize the data of such returns and transmit the same electronically under their digital signatures.

    Sub-Section (2): omitted

    Sub-Section (3): A registered person may, subject to approval of the Commissioner Inland Revenue having jurisdiction, file a revised return within one hundred and twenty days of the filing of return under sub-section (1) or, as the case may be, sub-section (2), or under clause (a) or clause (b) of section 27, to correct any omission or wrong declaration made therein.

    Sub-Section (4): Notwithstanding the penalties prescribed in section 33, if a registered person wishes to file revised return voluntarily along with deposit of the amount of tax short paid or amount of tax evaded along with default surcharge, whenever it comes to his notice, before receipt of notice of audit, no penalty shall be recovered from him:

    Provided that in case the registered person wishes to deposit the amount of tax as pointed out by the officer of Inland Revenue during the audit, or at any time before issuance of the show cause notice, he may deposit the evaded amount of tax, default surcharge under section (34), and twenty five percent of the penalty payable under section 33 along with the levied return:

    Provided further that in case the registered person wishes to deposit the amount after issuance of show cause notice, he shall deposit the evaded amount of sales tax, default surcharge under section 34, and full amount of leviable penalty under section 33 along with the revised return and thereafter, the show cause notice, shall stands abated.

    Sub-Section (5): The Board may, by notification in the official Gazette, require any person or class of persons, for any goods of such description or class, to furnish such summary or details or particulars pertaining to the imports, purchases and supplies during any tax period or periods, in such format as may be specified.

  • Sales Tax Act 1990: tax officials authorized to access record

    Sales Tax Act 1990: tax officials authorized to access record

    KARACHI: The sales tax law has authorized tax officials to access record maintain by registered persons for the purpose of investigation and audit.

    According to updated Sales Tax Act, 1990 issued by the Federal Board of Revenue (FBR), the Section 25 explained maintenance of record by taxpayer and authority of tax department to access the record and conduct audit.

    Section 25: Access to record, documents, etc.

    Sub-Section (1): A person who is required to maintain any record or documents under this Act or any other law shall, as and when required by Commissioner, produce record or documents which are in his possession or control or in the possession or control of his agent; and where such record or documents have been kept on electronic data, he shall allow access to the officer of Inland Revenue authorized by the Commissioner and use of any machine on which such data is kept.

    Sub-Section (2): The officer of Inland Revenue authorized by the Commissioner, on the basis of the record, obtained under sub-section (1), may, once in a year, conduct audit:

    Provided that in case the Commissioner has information or sufficient evidence showing that such registered person is involved in tax fraud or evasion of tax, he may authorize an officer of Inland Revenue, not below the rank of Assistant Commissioner, to conduct an inquiry or investigation under section 38:

    Provided further that nothing in this sub-section, shall bar the officer of Inland Revenue from conducting audit of the records of the registered person if the same were earlier audited by the office of the Auditor-General of Pakistan:

    Provided also that audit under this section shall be conducted only once in every three years.

    Sub-Section (3): After completion of Audit under this section or any other provision of this Act, the officer of Inland Revenue may, after obtaining the registered person’s explanation on all the issues raised in the audit shall pass an order under section (11).

    Sub-Section (4): Omitted

    Sub-Section (5): Notwithstanding the penalties prescribed in section 33, if a registered person wishes to deposit the amount of tax short paid or amount of tax evaded along with default surcharge voluntarily, whenever it comes to his notice, before receipt of notice of audit, no penalty shall be recovered from him:

    Provided if a registered person wishes to deposit the amount of tax short paid or amount of tax evaded along with default surcharge during the audit, or at any time before issuance of show cause notice he may deposit the evaded amount of tax, default surcharge under section 34, and twenty five per cent of the penalty payable under section 33:

    Provided further that if a registered person wishes to deposit the amount of tax short paid or amount of tax evaded along with default surcharge after issuance of show cause notice, he shall deposit the evaded amount of tax, default surcharge under section 34, and full amount of the penalty payable under section 33 and thereafter, the show cause notice, shall stand abated.

    Explanation.– For the purpose of sections 25, 38, 38A, 38B and 45A and for removal of doubt, it is declared that the powers of the Board, Commissioner or officer of Inland Revenue under these sections are independent of the powers of the Board under section 72B and nothing contained in section 72B restricts the powers of the Board, Commissioner or Officer of Inland revenue to have access to premises, stocks, accounts, records, etc. under these sections or to conduct audit under these sections.

  • Sales Tax Act 1990: six years record required to be maintained

    Sales Tax Act 1990: six years record required to be maintained

    As per Section 24 of the Sales Tax Act, 1990, a person engaged in taxable supplies is mandated to preserve records and documents for a period of six years, effective from the end of the tax period to which such records or documents relate.

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  • Sales Tax Act 1990: requirement of issuing tax invoice

    Sales Tax Act 1990: requirement of issuing tax invoice

    KARACHI: A person making taxable supplies is required to issue serially numbered tax invoice at the time of making supply of goods.

    According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), the Section 23 of the Act explained the requirement of issuing tax invoice.

    Section 23: Tax Invoices

    Sub-Section (1): A registered person making a taxable supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars, namely: –

    (a) name, address and registration number of the supplier;

    (b) name, address and registration number of the recipient;

    (c) date of issue of invoice;

    (d) description and quantity of goods;

    (e) value exclusive of tax;

    (f) amount of sales tax; and

    (g) value inclusive of tax:

    Provided that the Board may, by notification in the official Gazette, specify such modified invoices for different persons or classes of persons:

    Provided further that not more than one tax invoice shall be issued for a taxable supply.

    Sub-Section (2): No person other than a registered person or a person paying retail tax shall issue an invoice under this section.

    Sub-Section (3): A registered person making a taxable supply may, subject to such conditions, restrictions and limitations as the Board may, by notification in the official Gazette, specify, issue invoices to another registered person electronically and to the Board as well as to the Commissioner, as may be specified.

    Sub-Section (4): The Board may, by notification in the Official Gazette, prescribe the manner and procedure for regulating the issuance and authentication of tax invoices.

  • Sales Tax Act 1990: maintaining record for taxable supplies

    Sales Tax Act 1990: maintaining record for taxable supplies

    KARACHI: A person making taxable supplies is required to maintain record of goods and keep at his office for scrutiny by tax officials.

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  • Sales Tax Act 1990: persons required to get registration

    Sales Tax Act 1990: persons required to get registration

    KARACHI: All the persons engaged in making taxable supplies are required to get sales tax registration.

    According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), the Section 14 of the Act, explained the requirement of registration.

    Section 14: Registration

    Sub-Section (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.

    Sub-Section (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.

    Sub-Section (3): The registration under this Act shall be regulated in such manner as the Board may, by notification in the official Gazette, prescribe.

  • Sales Tax Act 1990: exemption on domestic supplies, imports

    Sales Tax Act 1990: exemption on domestic supplies, imports

    KARACHI: The government has allowed exemption on supply of goods and import of goods falling in the Sixth Schedule of Sales Tax Act, 1990.

    Section 13 of updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), explained the exemptions on domestic supplies and imported goods.

    Section 13: Exemption

    Sub-Section (1): Notwithstanding the provisions of section 3, supply of goods or import of goods specified in the Sixth Schedule shall, subject to such conditions as may be specified by the Federal Government, be exempt from tax under this Act.

    Sub-Section (2): Notwithstanding the provisions of sub-section (1) –

    (a) the Federal Government may, whenever circumstances exist to take immediate action for the purposes of national security, natural disaster, national food security in emergency situations, protection of national economic interests in situations arising out of abnormal fluctuation in international commodity prices, removal of anomalies in taxes, development of backward areas and implementation of bilateral, multilateral agreements and matters relating to international financial institutions or foreign government-owned financial institutions by notification in the official Gazette, exempt any taxable supplies made or import or supply of any goods or class of goods, from the whole or any part of the tax chargeable under this Act, subject to the conditions and limitations specified therein;

    Sub-Section (3): The exemption from tax chargeable under sub-section (2) may be allowed from any previous date specified in the notification issued under clause (a).

    Sub-Section (4): omitted

    Sub-Section (5): omitted

    Sub-Section (6): The Board shall place before the National Assembly all notifications issued under this section in a financial year.

    Sub-Section (7): Any notification issued under sub-section (2), after 1st July, 2015 shall, if not earlier rescinded, stand rescinded on the expiry of the financial year in which it was issued:

    Provided that all such notifications, except those earlier rescinded, shall be deemed to have been in force with effect from the 1st July, 2016 and shall continue to be in force till the 30th June, 2018, if not earlier rescinded:

    Provided further that all notifications issued on or after the first day of July, 2016 and placed before the National Assembly as required under sub-section (6) shall continue to be in force till thirtieth day of June, 2018, if not earlier rescinded by the Federal Government or the National Assembly.

  • Sales Tax Act 1990: recovery of short payment without notice

    Sales Tax Act 1990: recovery of short payment without notice

    KARACHI: The sales tax law authorized tax authorities to recover short paid amount without issuing notice.

    According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), the Section 11A of the Act explained the authority of tax officials in recovery of short paid amount.

    Section 11A: Short paid amounts recoverable without notice

    Notwithstanding any of the provisions of this Act, where a registered person pays the amount of tax less than the tax due as indicated in his return, the short paid amount of tax along with default surcharge shall be recovered from such person by stopping removal of any goods from his business premises and through attachment of his business bank accounts, without giving him a show cause notice and without prejudice to any other action prescribed under section 48 of this Act or the rules made thereunder:

    Provided that no penalty under Section 33 of this Act shall be imposed unless a show cause notice is given to such person.

    Section 11B: Assessment giving effect to an order

    Sub-Section (1): Except where sub-section (2) applies, where, in consequence of, or to give effect to, any finding or direction in any order made under Chapter-VIII by the Commissioner (Appeals), Appellate Tribunal, High Court or Supreme Court an order of assessment of tax is to be issued to any registered person, the Commissioner or an officer of Inland Revenue empowered in this behalf shall issue the order within one year from the end of the financial year in which the order of the Commissioner (Appeals), Appellate Tribunal, High Court or Supreme Court, as the case may be, was served on the Commissioner or officer of Inland Revenue.

    Sub-Section (2): Where, by an order made under Chapter-VIII by the Appellate Tribunal, High Court or Supreme Court, an order of assessment is remanded wholly or partly and the Commissioner or Commissioner (Appeals) or officer of Inland Revenue, as the case may be, is directed to pass a new order of assessment, the Commissioner or Commissioner (Appeals) or officer of Inland Revenue, as the case may be, shall pass the new order within one year from the end of the financial year in which the Commissioner or Commissioner (Appeals) or officer of Inland Revenue, as the case may be, is served with the order:

    Provided that limitation under this sub-section shall not apply, if an appeal or reference has been preferred against the order passed by Appellate Tribunal or a High Court.

  • Sales Tax Act 1990: Recovery of amount erroneously refunded

    Sales Tax Act 1990: Recovery of amount erroneously refunded

    KARACHI: The officers of Inland Revenue have been authorized for recovery of refunded amount erroneously issued to taxpayer along with penalties and default surcharge.

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