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ISLAMABAD: The Federal Board of Revenue (FBR) has directed its field formations to disallow input tax adjustment in next month’s sales tax returns in past cases where the adjustment was unduly allowed due to any technical glitch.

According to the details released by the FBR here on Sunday, the FBR has explained the matter pertaining to input tax adjustment of Tier-1 retailers who failed to integrate with POS System. The FBR has also announced that all unduly allowed adjustments would be disallowed.

The FBR has explained that an amendment was introduced in the relevant provisions of law recently that all those Tier-1 retailers who failed to get registered with POS System would not be entitled to claim 60% of input tax adjustment in their monthly Sales Tax Return. Legally speaking this is a regular check which Field Formations undertake in routine. However, in order to automate the process, Sales Tax General Orders (STGOs) were issued to do the same through the IT system. The FBR has put in place a very robust system to verify the payment and deduction of input tax adjustment and there are many checks built in the system to authenticate and verify the processes.

The FBR has clarified that the System indicated the anomaly in the monthly Sales Tax Return of retailers who failed to integrate with POS System. CEO, PRAL with his team explained that the changes in the system had, in fact, suitably been incorporated. The matter was brought to the notice of Chairman FBR/Secretary Revenue Division, Dr. Muhammad Ashfaq Ahmed who ordered a inquiry into the matter to ascertain as to why the changes made into the system were not effectively working.

In case of any technical glitch, it would be scrutinized as to how this malfunction occurred and the fault would be rectified in the minimum possible time. Field Formations are already enforcing law, and in case any input has been allowed, it would be disallowed in next month’s sales tax return, which is a routine function of the tax administration.

It is pertinent to mention that FBR had already taken up the matter on its own and Chairman FBR had already ordered an inquiry into the same. The system itself identified this malfunctioning/anomaly which resulted into an immediate inquiry.

The FBR has resolved that all unduly allowed adjustments would be disallowed.

Lastly, it is pertinent to highlight that FBR has ushered in a new era of a clean taxation through various innovative interventions both at policy and operational level. These out-of-box initiatives have not only have translated into consistent revenue growth but also bridged trust deficit between FBR and taxpayers. Therefore, the on-going drive for digitization, transparency and taxpayers’ facilitation across the country has already perturbed those vested economic interests who have largely been the beneficiary of various tax exemptions and revenue leakages for decades, and who could, in fact, be behind such ludicrous content to demoralize the tax administration.

Chairman, FBR has also instructed Member (Public Relations), FBR to arrange regular training sessions for FBR reporters in tax laws and procedures, FBR added.

Copyright Business Recorder, 2022

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Ahmad Hassan Feb 07, 2022 11:24pm
Any kind of help for my country I will present in every field to help our country Pakistan
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