ISLAMABAD: The Federal Board of Revenue (FBR) has provided a major relaxation to the manufacturers in the fertiliser sector by allowing input tax credit/adjustment on supplies made to the un-registered persons having value exceeding prescribed threshold of Rs100 million per fiscal year.
In this regard, the FBR has issued an SRO 1337 (I)/2020 here on Wednesday to relax fertiliser manufacturers from this documentation measure.
Now, the fertiliser manufacturers would be bound to provide complete list of the dealers or distributors to the FBR.
Under Sales Tax Act 1990, a registered person shall not be entitled to deduct input tax (credit adjustment or deduction of input tax), which is attributable to such taxable supplies exceeding, in aggregate, Rs100 million in financial year or Rs10 million in a tax period as are made to certain person who is not a registered person under this Act, it added.
Sources said that in order to document big distributors, the FBR did not allow input tax adjustment to those manufacturers who would sell Rs10 million goods on a monthly basis to unregistered buyers.
The objective of this amendment was to bring major distributors into the documented regime.
The big distributors who made purchases from Rs10 million on monthly basis to Rs100 million on annual basis, the manufacturers would not be granted input adjustments, if they would sell their products to unregistered persons.
Now, this condition has been relaxed for the manufacturers of fertiliser industry through an SRO 1337 (I)/2020 issued here on Wednesday.
However, the manufacturers have to provide necessary information to the FBR for availing relaxation of the said provision of the law.
According to the notification, the manufacturers of fertilisers are required to provide following documents and details to the board on or before the 15th day of January, 2020: The complete list of the dealers or distributors of their products including details of business name, address and NTNs; complete list of buyers, other than dealers and distributors, including details of their names, residential addresses and CNICs; copies of relevant dealership or distribution agreements, as the case may be; details of all business bank accounts of the dealers, distributors or buyers along-with names and addresses of the relevant bank branches; dealer or distributor-wise figures of sales made by the registered persons during the period 01.07.2019 to 30.06.20 and 01.07.2020 till date; and any other document specially required by the board for compulsory registration of dealers, distributors or buyers.
Failure to comply with any of the conditions specified in column (3) of the said Table by due date shall disentitle the registered person for the waiver being granted under this notification and all provisions of Act shall apply accordingly.
This notification shall take effect from the 1st day of July, 2020, it added.
Copyright Business Recorder, 2020
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