KARACHI: The Karachi Tax Bar Association (KTBA) has urged the Federal Board of Revenue (FBR) to remove certain flaws from the amended tax laws to make e-filing of sales tax returns hassle-free.
Taxpayers failed to e-file their returns for July through FBR’s web-portal because of amendments in the Finance Act 2014.
The tax bar pointed that it was because some appendices were not in agreement with the sales tax returns.
The association also urged the board authorities to allow extension in filing of sales tax returns for the current fiscal year starting from July 1, 2014.
The KTBA pointed out that it was right of the registered taxpayers to claim input tax on purchases during preceding six months if the relevant input tax could not be claimed in the actual tax period.
Similarly, under section 10(1) of the Sales Tax Act, 1990, excess input tax against output tax on supplies (other than exports and zero-rated supplies) is to be carried forward to the next tax period and should be treated as input tax for that period. However, the newly uploaded sales tax return is not allowing credit of excess input tax brought forward from preceding tax months.
The bar added that the newly uploaded sales tax return is allowing input tax on services which were acquired only from those service providers who are registered with the FBR.
Objecting to this, it said restriction imposed by the portal by not allowing input tax on services provided by people who are not registered with the FBR is unjust and against the spirit of memorandum of understanding signed between the FBR and provincial governments as well as SRO No.212(1)/2014, dated March 26, 2014.
Referring to SRO 647(1)/2007, the bar stated that commercial importers are exempt from provisions of Section 8(b) of the Sales Tax Act, 1990, which restricts claiming input tax in excess of 90 percent of the output tax.
The KTBA has urged the FBR to direct PRAL (Pakistan Revenue Automation Limited) to make necessary amendments in the website to fix the issues.
