Non-availability of SRB data with FBR: input tax cross verification not done in certain cases

The Federal Board of Revenue has informed Sindh Revenue Board (SRB) that due to non-availability of SRB data with the FBR, the cross verification of input tax against sales tax on service charges was not made in some cases of registered persons in Sindh.
It is learnt here on Tuesday that now the Board has clarified that the input tax would be allowed on the basis of documentary evidence of filing of sales tax return through the SRB. In this connection, the FBR has issued a letter to the SRB on the input tax credit of Sindh sales tax against the output tax on goods in terms of section 7(1) of the Sales Tax Act, 1990 read with section 2 (14) (d) thereof.
According to the FBR, the input adjustment is allowed at the time of filing of return in accordance with section 7(1) of the Sales Tax Act, 1990. However, in some instances due to non availability of SRB data with FBR, the bona fide of input claimed by the taxpayer in lieu of Sindh Sales Tax on Services, were not accepted. Recently, SRB and FBR have mutually agreed to provide access to their respective database for the purpose of verification of input adjusted by their taxpayers which would eventually facilitate system-based input tax adjustment without recourse to manual verifications thus resolving the issue of input adjustment, FBR added.
The FBR has authorised the SRB to have full access to the data captured after June 30, 2011 relating to sales tax matters of the service providers registered with both FBR and SRB. The authorisation is, however, subject to the condition that SRB and/or PRAL will not divulge, share, reveal, exchange or give away the information or part of the information to any person, entity or organisation (except the competent court of law) without written approval of FBR, and also that SRB provides FBR, full access to the data or services providers in Sindh who are registered with the SRB or, where persons registered as services providers in Sindh also indulged in import or supply of goods. The mutual co-operation will also be extended in respect of verification of input tax adjustment claims.