In a letter sent to Asim Ahmad, Chairman, Federal Board of Revenue (FBR) on August 13, 2021, the KTBA said that online sales tax return had not been updated and harmonized in line with the amendments incorporated in Sales Tax Act, 1990 through Finance Act, 2021.
The KTBA informed that effective from July 2021 the listed companies had been excluded from the purview of application of Section 8B of the Sales Tax Act, 1990, which restricted input claim tax adjustment up to 90 per cent of output tax, which required modification in the sales tax return.
The Section 8B of the Sales Tax Act, 1990 is read as:
“(1) Nothwithstanding anything contained in this Act, in relation to a tax period, a registered person other than public limited companies listed on Pakistan Stock Exchange shall not be allowed to adjust input tax in excess of ninety per cent of the output tax for that tax period:”
The tax bar also highlighted that practice of declaration of bulk sale by banks/insurance companies/port terminal operators etc. is still in vogue. Due to this the taxpayers are unable to claim their input tax adjustment.
The tax bar urged the FBR to direct all banks/insurance companies/port terminal operators and other bulk sellers to immediately discontinue the practice of bulk sale input in respect of registered persons in the sales tax return.