ISLAMABAD: The Pakistan Chemical & Dyes Merchants Association (PCDMA) has raised significant concerns regarding the difficulties currently faced by traders in filing their sales tax returns. This comes in the wake of a new requirement introduced by the Federal Board of Revenue (FBR) through SRO 55(I)/2025, which makes it mandatory for all registered commercial importers, distributors, and wholesalers to declare their stock position in Annexure H1 with every monthly sales tax return.
PCDMA Chairman Salim Valimuhammad stated that the lack of clear and timely instructions from the FBR regarding this new requirement has created unnecessary confusion and hardship for traders across the country.
Confusion and Filing delays among traders
Valimuhammad explained that a considerable number of traders submitted their March 2025 sales tax returns without Annexure H1 simply because they did not fully understand the new process or its implications. As a direct consequence, these traders are now finding themselves unable to declare their opening stock for April, leading to a cascading delay that continues even into June.
“PCDMA has received many complaints from members who are still unable to file their April 2025 returns due to this confusion,” Valimuhammad emphasized, highlighting the widespread nature of the problem.
He further added that many traders were compelled to engage in repeated back-and-forth communication with the FBR seeking clarification on the new requirement. While the FBR eventually allowed revised returns without needing to change Annex A or C or seek commissioner approval, for many, this clarification came too late, having already caused significant delays and operational disruptions.
PCDMA proposes grace period & enhanced consultation
To mitigate the current difficulties and prevent further disruptions, the PCDMA is urging the FBR to grant traders a 60- to 90-day grace period for submitting Annexure H1 after they have filed their main sales tax returns. This proposed flexibility would be similar to the 120-day window already available to manufacturer-exporters, acknowledging the practical challenges faced by businesses.
“PCDMA believes that such crucial decisions should be made after proper consultation with trade bodies,” Valimuhammad asserted. He stressed that timely and transparent communication is absolutely essential to ensure taxpayer compliance and to proactively avoid similar problems in the future.
The association continues to advocate for reforms that safeguard traders’ interests and promote smoother, more efficient tax procedures. PCDMA is pushing for urgent action from the FBR before these ongoing disruptions adversely affect business operations, erode trader confidence, and potentially impact overall national revenue collection in the coming months.
