ISLAMABAD: The Federal Board of Revenue (FBR) has asked the Economic Affairs Division (EAD) to directly approach the concerned Chief Commissioner Inland Revenue to obtain sales tax exemption authorisations on goods imported or supplied under grants-in-aid agreements for entitled organisation or agency.
The FBR issued Sales Tax General Order (STGO) No. 48 for processing of applications of exemption under Sales Tax Act, 1990.
As per existing law: “Goods imported or supplied under grants-in-aid for which a specific consent has been obtained from the board (FBR); supplies and imports under agreements signed by the government of Pakistan before June 30, 1996, provided the agreements contained the provision for exemption of tax at the time of signing of agreement.”
The FBR said that in order to streamline the issues pertaining to grant of exemption to goods imported or supplied under grants-in-aid, procedure for issuance of authorization of exempt supply has been prescribed under Chapter VIII-A of the Sales Tax Rules, 2006 inserted through SRO 494(I)/2015 dated June 30, 2015 which stipulates that the entitled organization or agency desirous of making exempt imports or taking exempt supplies from a registered person shall make application to the officer of Inland Revenue having jurisdiction, accompanied with documents detailed in the Rules.
Therefore, the FBR directed all chief commissioners of Inland Revenue to nominate one dedicated officer in every Regional Tax Office (RTO) / Large Taxpayers Unit (LTU), not below the rank of an assistant commissioner IR/Deputy Commissioner IR, as a focal persons to dispose of such applications received from Economic Affairs Division (EAD) pertaining to entitled organizations/agencies falling under the jurisdiction or respective RTO/LTU. After satisfying that the intended purchases by the organization or agency are bona-fide and qualify for exemption under the subject – referred provision of law, the designated focal person may issue an ‘authorization for exempt supply’. All such applications must be disposed of within 15 days of receipt in the RTO/LTU.
Through the STGO, Economic Affair Division is also asked that bona-fide applications, complete in all respects, in respect of organizations or agencies, from now onwards may be sent directly to the chief commissioner Inland Revenue (RTO/LTU) having jurisdiction for obtaining ‘authorization for exempt supplies’ under grants-in-aid.
