National Tax or CNIC numbers: SRO 821(I)/2011 creates fear among traders

KARACHI: With the imposition of mandatory requirement by the Federal Board of Revenue (FBR) to issue invoices containing National Tax or CNIC numbers of unregistered traders are now becoming more fearful of the situation.

The FBR has made it mandatory for all industrial sectors except sugar sector to issue invoice carrying CNIC numbers or NTNs of their unregistered buyers, which would definitely cause the businesses to shrink, said Zeeshan-ur-Rehman, ACA, from Shekha & Mufti, Chartered Accountants. He said that under SRO 821(I)/2011, the board has made it mandatory for all registered manufacturers, importers and exporters selling taxable or dutiable goods to unregistered persons to mention their CNIC/NTN in the invoices from January, 2012.

He expressed fear that this mandatory requirement would restrain non-compliant taxpayers from reporting sales made to unregistered without disclosing buyers' NTN/CNIC.

However, few beneficial rulings were also issued by FBR in this respect, overlapping with each other, and creating confusion among the business circles, he added.

Zeeshan said that all industrial sectors have expressed resentment over the said decision, terming it as impractical and unrealistic approach as unregistered buyers either refuse to share their NTN/CNIC or switch to some other unregistered seller, which would cause severe financial shocks to the already depressed business community.

Following the requests made by the business fraternity, the FBR has only excluded the sugar sector from the jurisdiction of the said SRO but this exemption remains applicable till the discussion between the FBR and Pakistan Sugar Mills Association (PSMA) reaches any conclusion, he said.

Similarly, upon agitation by other quarters, the FBR later relaxed the implementation of SRO 821(I)/2011 across the board till 31 December 2011, he said. Therefore, the business fraternity is required to exercise the requirements of said SRO from January 2012, he added.

Moreover, he said, these rulings are in field and appear to be overlapping vis.a.vis implementation of SRO 821(I)/2011 upon sugar sector as on one hand, the FBR had made it mandatory for all taxpayers to observe compliance with the requirement of NTN/CNIC. However, on the other hand, the sugar-specific ruling has not been rescinded by FBR.

"If the sugar sector will continue to enjoy immunity from disclosing their buyers' NTN/CNIC, while all other business segments will be bound by the requirements of SRO 821(I)/2011," he said.

Keeping all these ambiguities in view, he urged the authority concerned to withdraw the sugar specific ruling or else clarify the matter to avert potential problems in future.