Taxation

Amended rules of ST registration: new applicants facing problems as no mechanism finalised

No new sales tax registration has been granted since July 1, 2019 as Federal Board of Revenue (FBR) hasn’t finalized the mechanism to implement the amendment made in sales tax registration rules through Finance Act 2019, creating difficulties for new applicants.

According to details, FBR has now made biometric verification mandatory for the new applicants for sales tax registration from National Database & Registration Authority (NADRA) and the amended Sales Tax Rules, 2006 has been issued by FBR.

After the said amendment, field formation of FBR is refusing to accept new sales tax registration from their counters since July 1, 2019, creating difficulties for the new applicants to get registration.

Sources said that meetings were being convened but FBR after the lapse of seven days remained unable to finalise the mechanism and make suitable changes in the system to implement the said amendment, creating difficulties for the new applicants to get enrolled in the system.

Talking to Business Recorder, Munawar Manekia, tax consultant & advocate confirmed the said issue, saying that field formation of FBR was neither entertaining new applications for sales tax registration nor the board was giving any justification on the issue, causing to aggravate the applicants’ problems.

He said that importers were facing financial losses in terms of demurrages as their consignments were stuck at ports due to absence of sales tax registration and no FBR official in Karachi or Islamabad was facilitating them in this regard.

Meanwhile, Adnan Mufti, partner, Shekha & Mufti Charter Accountants said that FBR had taken several budgetary measures on IMF pressure but the practical implementation of these measures were formidable task for the tax authority that tempting unwarranted problems for the taxpayers.

Under the revised rules, the applicant having National Tax Number (NTN) or income tax registration shall use his/her login credentials and upload bank account certificate issued by the bank in the name of the business; registration or consumer number with the gas and electricity supplier; particulars of all branches in case of multiple branches at various locations; GPS-tagged photographs of the business premises; and in case of manufacturer, also the GPS-tagged photographs of machinery and industrial electricity or gas meter installed to get sales tax registration.After the registration, the applicant or his authorized person shall visit eSahulat centre of NADRA within a month for biometric verification. In case of failure to visit or failure of verification, the registered person’s name shall be taken off the sales tax Active Taxpayer List.

In case of manufacturer, the board may require post-verification through field offices or a third party authorized by the board. In case, the field office, during scrutiny after the registration, finds that any document provided is non-genuine or fake or wrong, it may request through the system, to provide the missing document, in fifteen days, failing which the registered person shall be taken off from the sales Active Taxpayer List, subject to approval of the Member (IR-Operations), FBR.

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