Monthly sales tax returns software: FBR directs PRAL to include 3rd schedule items

LAHORE: The Federal Board of Revenue (FBR) has directed the Pakistan Revenue Automation (Pvt) Limited (PRAL) to include 3rd schedule items in monthly sales tax returns software and allow exclusion from the provision of Section 8B of the Sales Tax Act, 1990.

A letter issued by the Inland Revenue Policy Wing, copy available with Business Recorder, has pointed out that serial No 9 of SRO 1190(1)/2019 dated 02-01-2019 which excludes from applicability of Section 8B of the Sales Tax Act to those registered persons supplying goods covered under 3rd schedule of the Act, provided the value of taxable supplies exceed 80 percent of all taxable supplies. Subsequently, the said SRO was partially amended vide SRO 344(1)/2020 dated 29.4.2020 which substituted the word “Retailers” with words “Tier-1 Retailers” entitling them to adjustment of input tax to the extent of 95 percent of output tax only.

The letter has further stated that Tier-1 retailers supplying goods under 3rd schedule items which constitute 80 percent or more of their total sales are excluded from application of Section 8b of the Act. However, the Annexure-C of the Sales Tax returns, automatically fetching the data, does not recognize this description and does not exclude Tier-1 retailers dealing in 3rd schedule items from section 8B.

Keeping in view of the above described scenario, it is requested that PRAL may be directed to enable 3rd schedule identity row in the software of the monthly sales tax return where 3rd schedule items sales is declared over and above the prescribed threshold and allow the exclusion bases on S.No.9 of Table-I of SRO 1190 (1)/2019 so that the registered persons can avail the benefit available under the aforesaid provisions of law.

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