KTBA highlights irritants in filing sales tax return

KARACHI: Tax practitioners have identified irritants in online sales tax return and requested further extension in the date for e-filing the monthly sales tax return.

The Karachi Tax Bar Association (KTBA) highlighted the issues in a letter to the Federal Board of Revenue (FBR) chairman on Tuesday. It its letter, the KTBA said that members and taxpayers were facing difficulties in filing the returns.

The tax bar said that sales tax invoices were not being updated on real time basis in the return of buyers as well as suppliers, which were causing delay in filing. “As the concept of real time invoice entry is still not enabled, this will again result in delay in filing Annexure C (sales data) for the tax period August 2016,” the KTBA said.

The KTBA said the supplier has to claim withholding sales tax in the same month of issuance of invoice. “This is a harsh step and needs review as the responsibility to check if the buyer is a withholding agent or not,” the KTBA said.

The tax practitioners’ body said that supplier/buyer would not be able to file sales tax return for the subsequent period if either the supplier or buyer has not filed the return. If the supplier does not file the sales tax return, the buyer has to again make the payment, which the KTBA said would result in double taxation.

The KTBA said that in the last budget, retailers were given an option to pay two percent sales tax on their entire turnover. The retailers were given this option up till July 15, 2016. The tax body said that since the retailers were facing difficulties in the online system, they should be given sufficient time to avail this option.

The KTBA suggested that withholding sales tax be done away with between the registered persons and be restricted to un-registered persons only, and that too at the time of making payment and not on the basis of accrual. The FBR chairman has been urged to consider the difficulties faced by the taxpayers and tax practitioners and extend the last date for filing sales tax return for July 2016.