SUNDAY AUGUST 07: Tax bar points out errors in new ST return form
The Federal Board of Revenue (FBR) has not issued the details of the excisable services to remain under the Federal Excise Act 2005, following transfer of sales tax on services to the provinces. It is learnt that the ambiguity pertaining to services in the Federal Excise Act 2005 has been pointed out by the Karachi Tax Bar Association to Khawar Khurshid Butt, Member Inland Revenue FBR in a recent letter to the Board.
Copyright Business Recorder, 2011
The FBR has not issued the necessary notification to give details of the excisable services which would remain to be operated under the value-added tax mode. The services of the Federal Excise Act 2005 have been transferred to provinces, but the FBR has not issued the details of such services which would continue to be operated under the excisable mode as per Federal Excise Act. Thus, the ambiguity in the Federal Excise Act has yet to be removed by the FBR.
Under the new sales tax return form, the details related to Sindh should be removed from relevant annexure as Sindh is itself controlling the infrastructure for filing of return and paying of taxes, therefore the same does not require to be reflected in this column.
The tax bar association has sought different clarifications on the proposed sales tax return. In annexure-E of the sales tax return, the information required for Federal Exercise, but due to amendment in Finance Act, the services covered under Federal Excise announced to be shifted to sales tax in the provinces, but notification with the details of services which remain in Federal Excises Act has yet to be issued, the same may immediately be issued to avoid this ambiguous situation.
The association said that the bar has reviewed the draft sales tax return and strongly feels that the following points should be considered before finalising the sales tax return form to save the taxpayers from facing cumbersome exercise of preparing and filling the proposed sales tax return:
Firstly, at the first page business nature column should be removed as every time taxpayer has to select the category which is difficult for multiple nature of business activity. Secondly, in Annexure-A Option of invoicing month not given, which is necessary to enter previous month's invoices. Thirdly, in annexure A & C unregistered person CNIC/NTN is required which is again difficult to acquire considering the undocumented sector in the business activity
Fourthly, the HS Code is required to provide with purchases details, it is an unnecessary requirement as the taxpayers does not know about the HS Code of the item purchased, therefore the same may be removed. Fifthly, in annexure E, the information required for Federal Exercise, but due to amendment in Finance Act, the services covered under Federal Excise announced to be shifted to sales tax in the provinces, but no notification with the details of services remains in Federal Excises Act has yet to be issued, the same may immediately be issued to avoid this ambiguous situation.
Sixthly, in annexures F & H the information required, related to carry forward and stocks are almost impossible to provide every month, this information may be attached to the annual return. Seventhly, in annexure P the details related to province of Sindh should be removed from this annexure as province of Sindh has itself controlling the infrastructure for filing of return and paying of taxes, therefore the same does not required to be reflected in this column. Eighthly, the filing of new Sales Tax Return should be implemented from the month of September 2011, tax bar added.