Clarification on taxes payment issues: banks to hold meeting with FBR on Tuesday

The banks would convene a meeting with the Federal Board of Revenue (FBR) on Tuesday next week to seek clarification as to whether the federal excise duty (FED) or provincial sales tax is to be paid in Sindh province.
Official sources told Business Recorder here on Friday that the meeting between the tax authorities and the banking industry would also discuss whether the banks would file sales tax and federal excise returns with the FBR or sales tax return with the Sindh Revenue Board (SRB).
So far, the banks have not deposited FED or sales tax due to confusion in the absence of clear-cut notification or clarification of the FBR on the issue as the Board has not withdrawn the excise duty on excisable services under the Federal Excise Act 2005.
Sources said that the FBR would clarify the issues raised by the banks pertaining to sales tax, withholding tax and disclosure of information about the accountholders. In this regard, FBR Members, senior sales tax officials and income tax officials would participate in the meeting. In a letter to the FBR, the Pakistan Banks Association (PBA) said it would raise the following four issues with the FBR:
1. Bar on disclosure of bona fide banking transactions: Banks are in receipt of notices to provide details of accounts of customers based on computerised national identity card number (CNIC), name of customer. Banks had never refused to provide protected information to taxation; provided legal procedure is followed. Banks provide information where specific notices are required containing account number of the customers.
2. Disclosure of the National Tax Number/CNIC customers in monthly withholding tax statements: This is linked with bar on disclosure of bona fide banking transactions of the customers.
3. Problems in filing of withholding tax statements: FBR''s Web Portal is not receiving withholding tax statements where Computerised Payment Receipt Number (CPR) is not available. All NBP''s branches do not have system of issuance of the CPR. These branches receive payment of tax through manual challans which are not recognising withholding tax statements at the FBR''s Web Portal.
4. Issue of the FED and the sales tax on banking services in Sindh: Clarification/notification is required to resolve the issue whether banks should pay the FED or the sales tax.