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Tag: sales tax

  • Sectoral analysis shows massive decline in sales tax from OMCs

    Sectoral analysis shows massive decline in sales tax from OMCs

    ISLAMABAD: Federal Board of Revenue (FBR) has conducted sectoral analysis to identify reasons behind shortfall in revenue collection. The analysis showed massive decline in sales tax from Oil Market Companies (OMCs) during July – January 2019/2020.

    According to official documents, the collection of sales tax from OMCs was at Rs13.56 billion during first seven months of current fiscal year as compared with Rs18.94 billion in the corresponding period of the last year, showing 28 percent decline.

    The fall in sales tax collection from OMCs is much higher than the decline in domestic sales of the oil market companies. The domestic oil sales fell by 10 percent to 10.14 million tons during the period under review as compared with 11.3 million tons in the same period of the last fiscal year.

    The analysis also revealed that the collection of sales tax from iron and steel products declined by 29 percent to Rs4.93 billion as compared with Rs6.92 billion in the same period of the last fiscal year.

    Similarly, the collection of sales tax from sales of motor cars fell by 43 percent to Rs2.22 billion during first seven months of the current fiscal year as compared with Rs3.86 billion in the corresponding period of the last fiscal year.

    Reportedly, the FBR is facing huge shortfall in revenue collection to achieve current fiscal year revenue target. The FBR was assigned Rs5.55 trillion target at the start of current fiscal year. However, this target was revised downwards to Rs5.238 trillion.

    The FBR provisionally collected Rs2,400 billion during first seven months of current fiscal year as compared with Rs2,067 billion in the same period of the last fiscal year.

    The revenue authority is required another Rs2,828 billion in remaining five months to achieve the collection target.

    The FBR conducted analysis of 11 sectors, which included: OMCs, Iron and Steel Products; natural gas; auto parts; motor cars; motor cycles; tea; ceramic tiles; pickle in oil; printing industries; and storage batteries.

    All the above sectors have shown decline in sales tax during the period under review.

  • FBR extends ST, FE return date up to February 26

    FBR extends ST, FE return date up to February 26

    KARACHI: Federal Board of Revenue (FBR) has extended the last date for filing sales tax (ST) and federal excise (FE) return for the month of January 2020 up to February 26, 2020.

    The FBR issued a notification on Tuesday addressing all chief commissioners Inland Revenue of Large Taxpayers Units and Regional Tax Offices to inform about extension in date of submission of sales tax and federal excise return for the tax period of January 2020.

    The FBR said that the date has been extended for submission of sales tax and federal excise return up to February 26, 2020 for the tax period of January 2020, which was due on February 18, 2020.

  • Registered persons to pay Rs5,000 as penalty for each invoice for not obtaining CNIC

    Registered persons to pay Rs5,000 as penalty for each invoice for not obtaining CNIC

    KARACHI: Federal Board of Revenue (FBR) has said that registered persons to pay Rs5,000 as penalty amount on each invoice for failure to obtain CNIC information of buyers.

    Sources in the FBR said that as per updated Sales Tax Act, 1990 up to December 31, 2019 any person who fails to issue an invoice when required under this Act, then such person shall pay a penalty of five thousand rupees or three percent of the amount of the tax involved, whichever is higher.

    The penal amount has been specified for Section 23 of the Sales Tax Act, 1990, which mainly deals with tax invoices issued by registered persons, who are also liable to obtain information of Computerized National Identity Card (CNIC) of buyers on sales above Rs50,000.

    The mandatory condition of obtaining CNIC information of unregistered persons has been applicable from February 01, 2020, which was to be applied from August 01, 2019.

    As per the updated Sales Tax Act, 1990, the section said:

    23. Tax Invoices.– (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, in Urdu or English language, namely:

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

    (b) name, address and registration, number of the recipient and NIC or NTN of the unregistered person, as the case may be, excluding supplies made by a retailer where the transaction value inclusive of sales tax amount does not exceed rupees fifty thousand, if sale is being made to an ordinary consumer.

    Explanation. – For the purpose of this clause, ordinary consumer means a person who is buying the goods for his own consumption and not for the purpose of re-sale or processing:

    Provided that the condition of NIC or NTN shall be effective from 1st August, 2019;

    (c) date of issue of invoice;

    (d) description including count, denier and construction in case of textile yarn and fabric, 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.

  • Sales tax on mobile phones reduced by 85% to promote digital economy: FBR

    Sales tax on mobile phones reduced by 85% to promote digital economy: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) has reduced sales tax on imported mobile phones by 85 percent in order to promote digital economy in the country.

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  • FBR issues procedure for verification of sales tax invoice

    FBR issues procedure for verification of sales tax invoice

    KARACHI: Federal Board of Revenue (FBR) has issued procedure for verification of sales tax invoices prepared by Tier-1 retailers.

    According to FBR officials the following procedure shall be adopted for the verification of sales tax invoices.

    — Customer visits the counter to pay for his/her shopping.

    — Counter Boy Prepares the Invoice.

    — Invoice is forwarded to FBR system for invoice number.

    — Fiscal Invoice is generated and stored in FBR Sale Data Controller and returns a fiscal invoice number to POS.

    — Point of Sale (POS) generate the QR Code for fiscal invoice.

    — The receipt is printed out from the POS and physically delivered to the customer.

    — Customer receives the printed fiscal invoice and verify it from FBR System using any of proposed mode.

    The officials said that

    Tier -I retailer as defined under Section 2(43A) of Sales Tax Act 1990 are required to integrate their sales with the FBR.

    Tier-1 retailer means:-

    A retailer operating as a unit of a national or international chain of stores.

    A retailer operating in an air conditioned shopping mall plaza or centre, excluding kiosks.

    Retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds rupees six hundred thousands.

    A wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers.

    A retailer whose shop measures one thousand square feet in the area or more.

    The officials said that the integrated supplier shall prominently display on each outlet a signboard bearing FBR’s official logo along with the text “Integrated with FBR” and also registration number of each POS verifiable through FBR verification services.

    Explaining the benefits of establishing integration with the FBR, the sources said that supplies of finished fabric and locally manufactured finished articles of textile and textile made ups and leather and artificial leather shall be entitled to reduced rate of 14 per cent subject to condition they have maintained 4 percent value addition during the last six months.

    Further, customers entitled to receive a cash back of up to 5 per cent of the tax involved in the manner and to the extent as may be prescribed.

    The penalty for non-compliance by the Tier-1 retailers, the sources said that under sub section (6) of section 8B of the Act, adjustable in put tax for whole of that tax period shall be reduced by 15 percent.

    Penalty as prescribed at serial No.(19) of the section 33 of the Act besides default surcharge under section 34 of the Act.

  • Valuation to be issued to plug loopholes in sales tax collection on imported consumer goods

    Valuation to be issued to plug loopholes in sales tax collection on imported consumer goods

    KARACHI: Federal Board of Revenue (FBR) to issued sales tax valuation in order to plug revenue leakages on imported consumer items, sources said.

    The sources said that the FBR had identified massive misdeclaration and under invoicing on imported consumer items falling under Third Schedule of Sales Tax Act, 1990.

    In the latest budget 2019/2020, an amendment was introduced to Sales Tax Act, 1990 under which printing of retail price was made mandatory on imported consumer goods.

    The measure was introduced to end the assumed prices in order to recover sales tax on fixed retail prices on imported items.

    The law has been applicable since July 01, 2019 but due to difficulties faced by importers of such goods the FBR allowed relief in declaration without printing of retail prices subject to some conditions.

    The FBR issued Sales Tax General Order (STGO) on August 07, 2019 that the retail price, if not printed at import stage, can be printed at the port of import.

    According to the STGO: “If that is also not possible, the importer shall undertake to print the retail price after clearance of goods and shall pay sales tax on retail price which shall not be less than 130 percent of the customs value increased by assessed customs duties, excise duty and other applicable taxes and charges excluding sales tax.”

    The sources said that tax offices in Karachi conducted survey and found the selling price of imported consumer items was much higher than the declared value at customs clearance stage.

    They said that the finding of the survey had been sent to the FBR headquarters for taking further action.

    The printing of retail prices is mandatory for importers on items such as tea, juices, perfumes, household electrical goods, including air conditioners, refrigerators, deep freezers, televisions, recorders and players, electric bulbs, tube-lights, electric fans, electric irons, washing machines and telephone sets. These items shall also include house hold gas appliance, including cooking range, ovens, geysers and gas heaters.

    Besides items such as foam mattresses, paints, lubricating oils, storage batteries, tyers, motor cycles and auto rickshaws have also been included in the regime of printed retail prices.

    The sources said that as per latest development the FBR had decided to issue valuation of such imported consumer goods in order to realize correct sales tax at import stage.

  • Locally manufactured two-, three electric wheelers proposed 1pc sales tax for seven years

    Locally manufactured two-, three electric wheelers proposed 1pc sales tax for seven years

    ISLAMABAD: All two and three wheelers manufactured under Electric Vehicle Policy will sold at less than one percent sales tax for next seven years to bring the purchase price of EVs down, according to the policy.

    However, all two and three-wheeler EV’s imported shall be sold at one percent sales tax for the next five years.

    EVs will be exempted from registration fees and annual token tax to encourage prospective buyers and the FBR shall evolve a policy to evolve tax incentives for prospective buyers of the two-wheeler and three wheelers.

    All existing incentives of the Auto Development Policy 2016-2021 will remain intact, according to EV Policy 2019.

    The policy said that Pakistan had a large market of two and three wheelers. More than twenty million such vehicles are already on roads in Pakistan.

    Their local production has reached indigenization of more than 90 percent. Therefore, the need is to incentivize the already available manufacturing expertise for converting to e-bikes and e-rickshaws.

    Moreover, a new category of low speed electric vehicles have emerged that is added into this category.

    The policy said that EV specific parts and components, not being manufactured locally compliant to UNECE 1958 Agreement ‘WP.29’ standards as well as equivalent international standard applied by the United States, European Union and other major EV manufacturers, will be allowed import at one percent customs duty and one percent sales tax for the next two years.

    Registration number plates of EVs will have a distinct color/design to create EV specific zones in high density areas. The registration number plates will be different from other typical vehicles to distinguish between two, three and low speed four wheel electric vehicles and other vehicles segments.

    A special provision for import of swappable battery-based three wheelers is being introduced to help both introduction of such vehicles and charging infrastructure.

    Those manufacturers or consortia who demonstrate setup of manufacturing of these units and battery swapping infrastructure of running of these vehicles will be allowed to import a cumulative number of 20,000 completely built units (CBU) along with the charging infrastructure at one percent customs duty and can sell these units at one percent sales tax.

  • CNIC condition on sales tax transactions deferred till January 2020, traders claim

    CNIC condition on sales tax transactions deferred till January 2020, traders claim

    The Federal Board of Revenue (FBR) has announced its decision to defer the implementation of the Computerized National Identity Card (CNIC) condition on sales transactions exceeding Rs50,000 until January 31, 2020.

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  • FBR extends last date for filing sales tax, federal excise return

    FBR extends last date for filing sales tax, federal excise return

    ISLAMABAD: The Federal Board of Revenue (FBR) on has extended the last date for filing sales tax and federal excise return for the month of September 2019.

    According to a notification issued on Friday, the FBR extended the last date for making payment of sales tax and federal excise duty for the month of September 2019 to October 22, 2019 from October 15, 2019.

    The FBR extended the last date for submitting sales tax and federal excise return for the month to October 25, 2019 from October 18, 2019.

  • FBR detects huge gap in indirect revenue collection; launches sales tax, federal excise monitoring

    FBR detects huge gap in indirect revenue collection; launches sales tax, federal excise monitoring

    ISLAMABAD: Federal Board of Revenue (FBR) has launched monitoring of sales tax and federal excise duty following huge gap detected in indirect revenue collection.

    “There appear to be a big gap between actual collection of sales tax / federal excise and its true potential,” the FBR said in a communication sent to all Chief Commissioners of Inland Revenue.

    The FBR said that in order to bridge the gap numerous amendments were made in Sales Tax Act, 1990 and Federal Excise Act, 2005 through Finance Act, 2019.

    Now administrative measures are required to be strengthened / implement the policy corrections/

    The FBR directed the field formations to adopt the following steps in addition to their regular actions:

    01. Immediate action on non-files of July and August 2019, especially where the registered persons have filed their sales tax returns for the tax periods of May and June 2019. In addition, desk audit of the registered persons who filed returns for the month of July and August 2019 to be conducted especially those who were previously included in five reduced / zero rated sectors.

    02. Monitoring of registered persons paying sales tax under Eighth Schedule of the Sales Tax Act, 1990 especially in those cases where registered persons are supplying at reduced rate.

    03. Sectoral analysis/reports must be made by the field formations having jurisdiction over a specific sector, and these reports should be shared with the FBR as well as other field formations having jurisdiction over same sectors. Any success stories be identified.

    04. The registered persons dealing in third schedule items should be specifically monitored to ensure the sales tax is being paid on the retail price.

    05. Printing of retail price has to be ensured and price lists of all such products have to be obtained from the manufactured/importers filing in Third Schedule to compared with the printed prices of products supplied in market.

    06. Monitoring of stock position as on June 30, 2019 filed by the manufacturers/importers of goods which have been included in Third Schedule to ensure that supply is made and tax is charged on retail price.

    07. Timely filing of sales tax/federal excise returns along with all the annexure should be ensured. It has been observed that the registered persons do intentionally skip some annexures while filing the returns.

    08. Analysis of Annexure J showing the sale, production and stock must be at regular basis.

    09. Special focus should be made on those cases which have piled up massive carry forward and are only paying sales tax under Section 8B of the Sales Tax Act, 1990.

    10. FBR instructions / SOP for revision of the Sales Tax Returns should be followed in letter and spirit.