ISLAMABAD: The Federal Board of Revenue (FBR), Sindh Revenue Board (SRB) and Punjab Revenue Authority (PRA) signed a memorandum of understanding (MoUs) to ensure cross adjustment of sales tax on goods and services levied by the federal and provincial governments. The MoU signing ceremony was held at the FBR House in the presence of Finance Minister Ishaq Dar.
The MoUs were signed by FBR Chairman Tariq Bajwa, Punjab Revenue Authority Chairperson Iftikhar Qutab and Sindh Revenue Board Chairman Tashfeen Khalid Niaz. The MoU signing brought the long outstanding issue regarding cross adjustment of sales tax on goods and services among the Centre and federating units to an amicable end.
It is to be noted that after the 18th Amendment, the Federal government devolve the powers for collection and levy of sales tax on services to the respective provincial governments. Sindh was the first province which formed an independent revenue collection body and legislated the provincial Sales Tax Act along with Sindh Finance Bill 2011. Later on, Punjab and Khyber Pakhtunkhwa governments followed suit and established their sales tax authorities in 2012 and 2013, respectively.
In spite of this revolutionary development, federal and provincial governments were unable to enlarge mutual understanding for intra-federal/provincial input tax adjustment. The issue was debated threadbare among the highest sales tax collection authorities over last couple of years and settled with the singing of MoU.
