ISLAMABAD: Federal Board of Revenue (FBR) on Monday said that female consumer can present CNIC of her husband or father for making purchase above Rs50,000.
The FBR clarified that in case of purchase above Rs50,000 by an ordinary consumer being a female the CNIC of the husband or the father will be considered valid for the purpose of implementation of the provision.
Federal Board of Revenue (FBR) on Monday issued clarification regarding condition of Computerized National Identity Card (CNIC) for sale invoices above Rs50,000.
The FBR said that it was country-wide demand for decades to bring all people in the tax system and gradually convert CNIC as a NTN.
This has been the national public demand and is a correct approach. In the Finance Act, 2019, the first step towards this ultimate goal has been adopted by requiring provision of CNIC number in very few transactions.
The law as amended is simply described as under:
(a) The amendment has been made in the Sales Tax Act, 1990 (Section 23) and not in any other taxation statute.
(b) This clearly means that this provision is only applicable if purchases are made from a sales tax registered person.
(c) At present there are only 41,484 sales tax registered persons who are actually paying some tax with their returns.
(d) This provision requires that if a purchase is made from a sales tax registered person, then CNIC number of the buyer is to be provided in limited situations. Provision of CNIC number does not in any manner means that buyer has to be a registered person under the sales tax law. Sales to unregistered person can be made.
(e) The law further provides this condition will not apply if the value of purchases is below Rs50,000 in case sale is being made to an ordinary consumer. The term ordinary consumer is well defined. It means purchases for own non-business use by the end consumer.
The FBR said that in order to further safeguard businesses operating in a reasonable manner the law specifically provides that “if it is subsequently proved that CNIC provided by the purchaser was not correct, liability of loss or penalty shall not arise against the seller in case of sale made in ‘good faith’.
The FBR said that the provision has been placed for business to business transactions and few transactions in a value higher than Rs50,000 by limited number of end consumer and that too from sales tax registered person only and also to avoid, unverifiable, non-genuine, fake and fictitious business buyers which results in huge sales tax loss in value chain. This is all the more necessary now onwards as ‘Export Oriented Sectors’ which were zero rated will now be eligible for refunds. FBR is fully committed for automated expeditious release of refunds.
FBR said that there was no intention to place any hurdle in business transaction or to use this provision for any harassment.
The FBR further clarified that:
No action will be taken against the seller if an error or incorrectness is identified subsequently provided the transaction has been made in good faith.
(a) No action under this provision will be undertaken without the approval of Chief Commissioner of the jurisdiction. Furthermore, where the incidence exceeds Rs5 million the action will require further approval of Member Operations or Director General Export Oriented Sector or Member IR-Policy as the case may be.
(b) No action will be undertaken unless action has been undertaken against the person who has used non-genuine CNIC.