The Federal Board of Revenue (FBR) has made it mandatory for two major sectors, ie, edible oil, vegetable ghee/cooking oil and steel/billet manufacturers, paying Federal Excise Duty (FED) in sales tax mode, to follow tax invoices/adjustment of sales tax provisions and condition of providing CNIC of unregistered buyers. The FBR has issued S.R.0.1461(I)/2019 here on Wednesday to direct the sectors paying the FED in sales tax mode to follow section 8B (adjustable input tax) and section 23 (tax Invoices) of the Sales Tax Act 1990.
Under S.R.0.1461(I)/2019, the sales tax conditions of issuing tax invoice at the time of supply of goods would now be applicable on sectors paying Federal Excise Duty (FED) in sales tax mode under Second Schedule to the Federal Excise Act, 2005, sources said.
Under S.R.0.1461(I)/2019, the provisions of sections 8B and 23 of the Sales Tax Act, 1990 and serial numbers 46,49, 52, 52A, 71,109,134 and 147 of Table-1 and serial numbers 3 and 4 ofTable-2 in the Sixth Schedule thereto shall be applicable, mutatis mutandis, in regard to like matters in respect of the federal excise duty leviable in sales tax mode on the goods specified in the Second Schedule to the Federal Excise Act, 2005. The Second Schedule (Goods on which duty is collectible under sales tax mode with entitlement for adjustment with sales tax and vice versa) to the Federal Excise Act, 2005 contains sectors, ie, edible oil excluding epoxidized soyabean oil, vegetable ghee and cooking oil and steel billets, ingots, ship plates, bars and other long re-rolled products.
Under the provisions of section 8B (Adjustable input tax) of the Sales Tax Act, a registered person shall not be allowed to adjust input tax in excess of 90per cent of the output tax for that tax period. This section would be applicable on sectors of edible oil, vegetable ghee/cooking oil and steel/billet manufacturers, who are paying Federal Excise Duty (FED) in sales tax mode. As per provisions of section 23 (Tax Invoices) of the Sales Tax Act, a registered person making a taxable supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars, in Urdu or English language:
(a) name, address and registration number of the supplier; (b) name, address and registration, number of the recipient and NIC or NTN of the unregistered person, as the case may be, excluding supplies made by a retailer where the transaction value inclusive of sales tax amount does not exceed rupees fifty thousand, if sale is being made to an ordinary consumer.
Provided that the condition of NIC or NTN shall be effective (c) date of issue of invoice; (d) description including count, denier and construction in case of textile yarn and fabric, and quantity of goods; (e) value exclusive of tax; (f) amount of sales tax (g) value inclusive of tax.
In July 2019, the FBR had clarified that the amendment regarding provision of National Identity Card (CNIC) number at the time of purchases had been made in the Sales Tax Act, 1990 (Section 23) and not in any other taxation statute. This clearly means that this provision was only applicable if purchases were made from a sales tax registered person.