National Sales Tax Return to be extended to territorial jurisdiction of AJ&K

ISLAMABAD: After the successful launch of its digitized National Sales Tax Return last month, the FBR has signed an MoU with the Central Board of Revenue (CBR), AJ&K, to extend its application to the territorial jurisdiction of AJ&K.

In a ceremony, the MoU was inked by Dr Ashfaq Ahmad Tunio, Member (IT), FBR, and Shakeel Qadir Khan, Chief Secretary/ Chairman CBR (AJ&K), at the FBR HQs on Friday afternoon. The ceremony was witnessed by Chairman FBR/Secretary Revenue Division, Dr Muhammad Ashfaq Ahmed and Commissioner Inland Revenue (AJ&K) Zafar Mahmood Khan.

The chairman FBR congratulated Team FBR for successful launch of National Sales Tax Return in AJ&K. He also thanked chairman CBR (AJ&K) on signing of a historic MoU, which promises a paradigm shift in the way sales tax returns are filed by taxpayers of AJ&K. He termed it a watershed initiative and a big leap forward to maximizing automation and taxpayers’ facilitation who would be able to file their returns for Sales Tax and FED electronically. Addressing on the occasion, Shakil Qadir Khan thanked team and chairman FBR for providing this momentous opportunity to the government and taxpayers of AJ&K in integrating their economy with the Federation of Pakistan. This will usher in a new era for ensuring ease of doing business for the residents of AJ&K as well as the 1.5 million Kashmiri diaspora settled in England, Europe and other developed countries, he concluded.

It is pertinent to share that there are about 63,500 registered taxpayers in AJ&K, out of which 1,002 are also registered for Sales Tax and 40 are registered with WEBOC. The National Sales Tax Return will facilitate all those taxpayers who are engaged in sales taxable activities.

The need for a National Sales Tax Return was felt long ago, but only recently, the FBR had signed agreements with the provincial authorities to work together and prepare this return for the facilitation of taxpayers. Previously, a taxpayer had to get registered and file Sales Tax Returns in each of the areas where he was supplying goods or services. Thus, someone operating in all the four provinces and AJ&K had to file six different returns each month to different revenue authorities. This caused great hardship and increased compliance costs of the taxpayers. Likewise, it was also a very tedious and cumbersome task which often led to errors and disputes. The National Sales Tax Return has eliminated many of these issues.

The salient features of National Sales Tax Return include entering the sales data by the taxpayers only once, instead of multiple times. Furthermore, the system acts as a single repository for all domestic transactions and invoice management. Similarly, the system automatically apportions input tax, prepares the return and works out tax payable to each of the relevant authorities. This automation eliminates repeated tedious data entry, manual calculations and errors.

The new system is based on the IRIS platform, which already has many built-in functionalities. For example, notices, assessment orders, refunds, exemptions, and legal management system are already incorporated. The IRIS platform has proved to be very robust over time, and is being further improved. The new system has linkages with the POS transactions as well as Track & Trace.