FBR notifies rules to cross-check input, output tax adjustments

KARACHI: The Federal Board of Revenue (FBR) has linked the input and output tax credit with the return-filing of suppliers as well as buyers; and it would be the responsibility of a registered person to convince his suppliers/buyers to file returns.

The FBR has notified certain amendments in Sales Tax Rules 2006, which provides that a registered person would enter all the data of sales and supplies in the automated system along with debit credit notes, which would enable the FBR to cross-check input and output tax adjustments.

As soon as all suppliers of a registered person have declared their supplies made to him and have filed their monthly sales tax and federal excise returns for the same tax period, the registered person will be informed by the automated system of the Board that his all suppliers have filed their monthly sales tax and federal excise returns.

In case, suppliers of a registered person do not file their sales tax returns, he would be informed by the FBR’s new automated sales tax system to contact the supplier and persuade him to declare said supplies made to him and file return so that registered person could get input tax credit relating to said supplies.

Similarly, a sales tax registered persons can not claim output tax credit unless and until, his buyer file their returns and declare the sales tax withheld amount.

In case, buyers of sales tax registered persons fail to declare sales tax withheld amount in the monthly sales tax and federal excise return, the registered person would be informed by the FBR’s new automated sales tax system to contact their buyer and persuade him to declare sales tax withheld so that registered person could get output tax credit relating to said sales.

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