17 percent GST, CNIC condition: Government not meeting major demands of businessmen

The government is not meeting to two major demands of the business community - withdrawal of the Computerized National Identity Card (CNIC) condition from unregistered buyers to be effective August 1, 2019 and withdrawal of 17 percent sales tax on local sales of the five export-oriented sectors. Sources told Business Recorder that the FBR has only accepted those proposals of the business community which have small revenue implications.
Withdrawal of the CNIC condition would keep the wholesalers/traders, small and large, out of the tax net with actual revenue implications not revealed by the FBR though they are considered to be considerable.
Finance Bill 2020 excludes the condition of CNIC on supplies by a retailer where the transaction value inclusive of sales tax amount does not exceed Rs 50,000, if sale is being made to an ordinary consumer (defined as an individual purchasing goods for his own consumption and not for purpose of re-sale or processing).
If it is subsequently proved that CNIC number provided by the purchaser is not correct, liability of tax or penalty shall not arise against the seller, in case of sale made in good faith, according to the amendment in the Finance Bill 2020.
A senior FBR official told this correspondent that FBR is in the process of discussing measures that would facilitate jewellers and traders in consultation with jewellers associations and Pakistan Traders Alliance during the current week.
The 17 percent sales tax on local sales of five export sectors would have a revenue impact of Rs 80-100 billion; however All Pakistan Textile Processing Mills Association is engaged in talks with FBR on this matter.
The FBR headquarters has been inundated with representatives from various business groups since the passage of the Finance Bill 2020. The list includes All Pakistan Textile Mills Association (APTMA), chambers of commerce and industry, trade bodies and associations of Karachi, Faisalabad, Lahore and Islamabad, Lahore Traders Alliance and Anjuman-e-Tajran, but only the following proposals have been accepted and notified : (i) Reduction in additional customs duty on the import of edible oil from 7 to 2 percent, (ii) cut in withholding tax on transporters from 4 percent to 3 percent, (iii) simplified fixed tax scheme for traders, (iv) stocktaking of different sectors on the basis of self-assessment without physical intervention of tax officials, (v) clearance of imported Third Schedule items without printing of retail price or affixing stickers for which goods declaration are filed by the importers up to July 31, 2019, no sales tax on wheat flour in any form, ie, aata, maida or suji and meslin flour, and (vii) a new mobile app in English and Urdu languages for business registration of big retailers and distributors.
Accepted by FBR though not yet notified is the agreement to change duty and tax remission for export (DTRE) scheme on procurement of local goods by the export sectors. Under the amendment in the Finance Bill 2020, the tax on capital gains on disposal of immovable property has been rationalized.