KARACHI: The Sindh Revenue Board (SRB) has implemented online verification system for invoices issued by utility companies.
The SRB in a communication issued on Monday stated that STRIVe (Sales Tax Real-time Invoice Verification) System has been implemented for Sindh Sales Tax return filing since July, 2019.
However, keeping in view taxpayers’ demand, the system was not made applicable to the invoices issued by utility companies such as electricity / gas distribution companies and telephone / telecom companies.
Since, considerable time has elapsed and other tax administrations such as FBR and other provincial sales tax authorities have long ago implemented STRIVe for utility invoices, SRB has decided to discontinue the practice of allowing input tax adjustment against manual entry of utility invoices.
Accordingly, it is intimated that starting from Sindh sales tax returns for the tax period February, 2022, to be filed in March 2022, the input tax against utility invoices (i.e. electricity, gas and phone / telecom services) shall only be allowed if the supplier / utility company has declared such supplies / services specifically in the name of Sindh registered person in the respective monthly tax returns submitted with Federal Board of Revenue.
It is added that the input tax deduction / adjustment, so availed, shall be subject to admissibility criteria as laid down in or under the Sindh Sales Tax on Services Act, 2011.
Karachi Tax Bar Association (KTBA) has identified a sheer violation of the constitution by the Sindh Revenue Board (SRB) regarding appointments in appellate system.
KTBA President Muhammad Zeeshan Merchant in a letter to SRB Chairman Wasif Ali Memon pointed out the irregularities in appointments of provincial tax officials in first appellate forum available to taxpayers i.e. Appeals.
Merchant referred to the Constitution of Islamic Republic of Pakistan which is coined on the trichotomy of power.
The Article 175 of the Constitution envisages separation of powers between legislature, executive and judiciary ostensibly to prevent the concentration of power and to check transgression.
The Supreme Court of Pakistan in the case of Government of Baluchistan Vs. Azizullah Memon reported as PLD 1993 SC 31 has seconded the above analogy.
With the given methodology, it needs to be appreciated that the Notification No. SRB 3-4/34/2021 dated December 20, 2021 issued by the Member (Operations) Sindh Revenue Board (“SRB”), infringes upon the structure of trichotomy and separation of power in so far as following situations are concerned:
Zamir A. Khalid, presently posted as the Commissioner (Legal) is also given the additional charge of the Commissioner (Appeals – I)
Muhammad Iqbal Lakho, presently posted as Commissioner-III is also given the additional charge of the Commissioner (Appeals – II).
The KTBA expressed the surprise to see such a belligerent offensive on the constitutional methodology by a distinguished institution like SRB.
“We believe this prima facie is a travesty of justice as no one can be judge of his own cause. Please subscribe that this is further likely to shake the confidence of litigants (taxpayers) on the SRB as an independent appellate forum with the dedicated Commissioner (Appeals) is the only solution.”
KARACHI: Sindh Revenue Board (SRB) on Tuesday extended the last date for electronic filing of sales tax return for the period of December 2021 up to January 25, 2022.
The SRB issued Circular No. 01 / 2022 for extension in the last date for e-deposit of Sindh Sales Tax for the tax period December 2021 and for e-filing of tax return for the tax period December 2021.
Through the circular the SRB allowed the registered persons, including the withholding agents covered by the provisions of the Sindh Sales Tax Special Procedure (Withholding) Rules, 2014, to: e-deposit the amount of Sindh sales tax for the tax period December 2021 on or before Friday, January 21, 2022; and e-file their tax returns for the tax period December 2021 on or before Tuesday January 25, 2022.
The SRB extended the last date for electronic filing of sales tax returns following the date extension announced by the Federal Board of Revenue (FBR) a day earlier.
Previously, the SRB advised the taxpayers registered with the provincial tax authorities to file their monthly sales tax return on the SRB portal.
The SRB said that the FBR had developed a National Sales Tax return which is in the process of implementation.
As agreed by FBR, this return is only applicable to FBR registered persons at this stage. FBR is in the process of consultation with the provinces for extension of the National Sales Tax Return to the Provinces.
In view of above, in order to avoid any problem, all persons registered with SRB are requested to continue filing their Sindh sales tax returns in the form SST-03 on SRB portal i.e. http://e.srb.gos.pk in accordance with the provisions of the Sindh Sales Tax on Services Act, 2011, and the rules made thereunder.
SRB shall advise SRB-registered persons when Single National Sales tax Return is fully developed by FBR / PRAL in consultation with the provinces and after proper user acceptance tests are carried out.
Any departure from above advice may entail contravention proceedings by officers of SRB for non-filing of the prescribed return with SRB, which may lead to imposition of penalty and other related consequences, the SRB added.
KARACHI: The Sindh government has made mandatory the requirement of exchange rate declaration to avail sales tax concessions on export of services.
In this regard, the Sindh Revenue Board (SRB) issued a notification to amend Sales Tax on Services Rules, 2011.
The provincial revenue board amended the changes in Annex-D of the Sindh Sales Tax on Services Return in Form SST-03.
The decision to amend the rules has been taken considering the high volatility in exchange rate as the Pak Rupee hit record low at Rs178.04 on December 17, 2021 and lost around 13 per cent against the dollar since start of the current fiscal year.
As per the amended sales tax on service return form, an exporter is required to provide name of the foreign buyer or the non-resident service recipient. The other details shall be provided by the exporters, included: country to which service exported; description of the service exported; tariff heading of the service exported; 4-digit code as per State Bank of Pakistan (SBP) Code List; Invoice No.; Invoice Date etc.
The exporters are also required to value of the service exported, included: in foreign exchange (with currency name); exchange rate; in Pak Rupee.
The exporters further required to provide details, included: amount of sales tax involved being claimed to be exempt (in Pak Rupee); Reference No. of the notification / authority for exemption; and actual/estimated date for receipt of sale value in foreign exchange.
KARACHI: Sindh Revenue Board (SRB) has invited proposals for budget 2022/2023 from stakeholders by January 21, 2022.
The SRB said it was in process of formulating budgetary proposals for provincial budget 2022-2023 in relation to taxation and procedural provisions of Sindh Sales Tax on Services Act, 2011, the Sindh Sales Tax on Services Rules, 2011, the Sindh Sales Tax Special Procedure (Withholding) Rules, 2014, the Sindh Sales Tax Special Procedure (Transport or Carriage of Petroleum Oil through Oil Tankers) Rules, 2018 and the Sindh Sales Tax Special Procedure (Services provided or rendered by cab aggregator and the services provided or rendered by the owners or drivers of the motor vehicles using the cab aggregator service) Rules, 2019 and the various notifications issued under the Act 2011.
The SRB said that it was policy of the board to consult all chambers, associations, groups, stakeholders and taxpayers before finalizing the budget proposals.
“With this end in view, SRB requests all persons (including the chambers of commerce and industry, business councils, trade associations, tax bars, Institution of Chartered Accountants, Institute of Cost and Management Accountants, taxpayers, etc.) to send their written proposals latest by Friday, January 21, 2022.
The Sindh government has issued a notification dated November 23, 2021, to appoint Dr. Wasif Ali Memon as the chairman of the SRB.
Dr. Wasif was already working in SRB as a senior member. Prior to this assignment, he had served as an officer of the Pakistan Customs Service (PCS) for 31 years in various capacities including chief collector and director-general.
The contribution of Dr. Wasi Ali at the SRB in the capacity of a senior member (legal, audit, and IT) is worth mentioning as he expedited the process of effective litigation management, risk-based audit system besides introducing innovations in the digitalization of SRB.
He worked in active coordination with other provincial revenue authorities and the Federal Board of Revenue (FBR) and participated in activities under the auspices of the National Tax Council.
He also remained in close coordination with International Donors and Development Agencies.
Given the relevant skillset and capacities gathered over his illustrious career of 32 years, as a thorough professional, SRB and the provincial government expect to hugely benefit from his services.
Khalid Mehmood said that sincere efforts were made to resolve the indenters issue whose tax was reduced from 13 percent to 3 percent yet, many indenters were still reluctant to pay tax and have gone into litigations. “If they (Indenters) have any other feasible option, it can be shared with SRB and we will take it into consideration,” he assured.
He said that point of sale measure was being taken to capture sales of restaurants, beauty parlors and other outlets where a large number of cash transactions were taking place. “In this regard, we will be requiring your cooperation as it will be a substantive move,” he added.
Chairman SRB said: “Instead of being a typically strict tax collecting authority, we try our best to make SRB a taxpayers’ friendly institution and we have succeeded in attaining this objective to a certain extent.
“Even in those matters in which there were differences between the SRB and the business community, we usually act leniently in terms of enforcement and the Board has been overall enjoying good relations with the business community of Karachi.”
He added that any unwarranted notice received by members of the business community can be brought to SRB high-ups’ notice who are always available to listen to and amicably resolve the issues.
Chairman BMG Zubair Motiwala, while congratulating SRB Chairman on achieving record tax collection of Rs128 billion, stated that there was a huge potential for further growth as SRB has created an enabling and cordial environment in which the taxpayers were being facilitated as much as possible which was a very nice approach.
He stressed that out of a total revenue of Rs128 billion, Karachi must be contributing somewhere around Rs110 billion and out of this huge contribution, the Sindh government should look into the possibility of spending half of the amount on development of Karachi.
He further pointed out that the Worker Welfare Fund (WWF), which was either being submitted to SRB or FBR, was a serious issue that stands unresolved to date. Many taxpayers, who submit it to FBR, adjust WWF in Income Tax Returns but those taxpayers, who submit it to SRB, cannot carry out adjustment in IT returns.
Hence, the SRB and FBR will have to sit together to deal with this issue as it puts the business community in confusing situation, he added.
He further stated that sales tax on Exports was not being charged anywhere around the world hence it should not be charged here as well because all the services including shipping lines and terminals operators etc. were being availed for exports. “SRB must also rationalize its tax rates in consultation with KCCI as there was plenty of space available in numerous sectors where the tax rate can either be reduced or enhanced”, he opined.
Vice Chairman BMG Haroon Farooki, in his remarks, stated that the business community faces a lot of problems and remains confused on various occasions when parallel taxes were being demanded by the FBR and SRB as well and both claim that these taxes fall under their domain. “This clash between the two tax collecting authorities puts legitimate taxpayers in a discomfortable position who sometimes even have to go to courts to settle the issues but it is high time that FBR and SRB must sit together to decide their domains in order to set the loyal taxpayers free from all the trouble”, he added.
He mentioned that taxation issues of indenters, security agencies and travels agents etc. have still not been addressed at SRB level which require attention.
Vice Chairman BMG Jawed Bilwani stressed that although Karachi contributes 95 percent revenue to SRB but sector-wise and city-wise breakup was unavailable. “SRB should look into the possibility of publicizing this important info so that we could examine the statistics and give inputs on where the tax rate needs to be enhanced and where it has to be reduced.”
President KCCI Muhammad Idrees, while welcoming Chairman SRB, stated that since Khalid Mehmood assumed charge, SRB’s revenue has been constantly increasing every year and it was heartening to see that most of the revenue was being contributed by the business & industrial community of Karachi. “We have no problem in contributing so much and we can contribute even more but the funds being generated from Karachi must be utilized on the infrastructure of this city which was in bad shape.”
He appreciated the support and cooperation being extended by Chairman SRB who has promptly resolved numerous issues highlighted by KCCI.
Chairman Businessmen Group (BMG) Zubair Motiwala, Vice Chairmen BMG Haroon Farooki and Jawed Bilwani, President KCCI Muhammad Idrees, Senior Vice President Abdul Rehman Naqi, Advisor SRB Mushtaq Kazmi and KCCI Managing Committee Members attended the meeting.
A division bench of the SHC in a case C.P.No.D-3735 of 2016, observed: “We are of the considered view that instant petition is misconceived and not maintainable for having been filed on mere issuance of show casue notice, which prime facie does not suffer from any jurisdictional defect or patent illegality, whereas, the objections raised by the petitioner through instant petition can be agitated before the statutory forums while submitting the response/reply to the impugned show cause notice in accordance with law.”
Accordingly, the petition has been dismissed. The bench has also made reference to its short order issued on February 12, 2019, in the following terms:
“For reasons to be recorded later, the instant petition is dismissed along with the listed application for being not maintainable. The petitioner may, however, be at liberty to raise all such legal and factual grounds before the respondent, including the ground of jurisdiction, which shall be considered and decided by the respondents strictly in accordance with law, whereas, an opportunity of being heard shall be provided to the petitioner before passing any adverse order against the petitioner.”
Hum Tv Network, the petitioner, is a public limited company operating satellite TV channels engaged in the business of production, advertisement, entertained and media marketing, had challenged a show cause notice issued by an official of the SRB before the SHC on the ground that the same was malafide, illegal and was issued without jurisdiction and lawful authority.
The show cause notice was issued by the official of the SRB under Section 23(2) read with Section 23(1A) of the Sindh Sales Tax on Services Act, 2011 for the periods from July 2011 to June 2012, July 2012 to June 2013, July 2013 to June 2014 and July 2014 to June 2015.
The petitioner prayed that the show cause notice was issued without jurisdiction and lawful authority, as the notice issuing officer belonged to Unit-21 Commissioner-IV, had not jurisdiction over the case as the authority over ‘Withholding of Sindh Sales Tax Act’ was with the Assistant Commissioner (unit-22).
The petitioner had also raised objection that in absence of any audit proceedings or inquiry pending against a registered persons, impugned notice cannot be issued.
The counsel for the respondents (SRB) argued that the constitutional petition was not maintainable against Show Cause Notice as the same had not suffer from any jurisdictional defect or patent illegality.
The SHC was informed that the petitioner had been given plenty of time on request of extension for reply. But the petitioner instead giving reply preferred to approach the court.
