New VAT return form to replace combined ST/FED form

A new value-added tax (VAT) return (form for declaring sales, turnover and other liabilities) would replace the existing combined sales tax and federal excise return from July 1, 2010 under the Federal VAT Act 2010.
Sources told Business Recorder on Saturday that a special team of Federal Board of Revenue (FBR) has started working on the new VAT rules and procedures to abolish existing sales tax rules and special procedures of 2007. The FBR would introduce a new VAT invoice as well as VAT return form. However, it is yet to be decided whether the new VAT form should be separate or combined with the federal excise return. Presently, the FBR has issued a combined sales tax and federal excise return form to facilitate the taxpayers.
The combined return helps in adjustment of excise duty in sales tax regime. For example, a manufacturer paying excise duty can avail adjustment in sales tax. As the sales tax and federal excise are entirely two different taxes, the FBR may issue separate VAT return for them. However, sources admitted that it would be time-consuming for the registered taxpayers to separately file VAT and federal excise returns.
A tax expert said that most of the best tax administrations have a separate VAT return. Countries like Australia, Canada, New Zealand, UK etc have separate VAT return. In best tax administrations, excise operates as an entirely independent regime or it has been totally abolished. If the FBR wanted to continue with the excise regime, it should be handled separately by an independent department.
According to Federal VAT Act, the FBR has explained the features of the new tax invoice. A registered person who makes a taxable supply to another registered person shall issue a serially numbered true and correct tax invoice for the supply. A tax invoice shall contain the information prescribed by the Board, including but not limited to the date on which it is issued; the name , address and registration number of the supplier; the name, address and registration number or national tax number (NTN) or computerised national identity card (CNIC) number; description, quantity and other relevant specifications of the goods or services supplied; total amount payable for the supply; rate of tax applicable to the supply and the amount of tax payable.