Islamabad, October 21, 2023 (PAKONOMY): In a concerning development, a significant number of importers and traders in Pakistan are currently grappling with challenges in filing their monthly sales tax returns. The root cause of this predicament can be traced back to the legal restrictions imposed by the Federal Board of Revenue (FBR), the governing body responsible for overseeing taxation matters in the country.
The focal point of this issue revolves around the FBR’s recent decision to limit the reporting of supplies in sales tax returns. This limitation specifically pertains to supplies associated with Harmonized System (H.S.) codes that were either imported or purchased during the preceding twelve months. This means that traders are now mandated to report only those supplies that fall under these specific H.S. codes, which correspond to the products they have dealt with over the last year.
The FBR introduced this restriction as part of the Sales Tax General Order (STGO) 13 of 2022. Initially, when this rule was put into effect, traders did not encounter significant issues in adhering to it, especially in terms of filing annex ‘C’ in their sales tax returns.
However, a recent twist in the tale has exacerbated the situation. It appears that the electronic filing system used for sales tax returns has undergone rigorous system checks, which have become particularly stringent in the current month. These checks are intended to enforce the restriction on reporting supplies associated with specific H.S. codes. As a result, traders are now facing formidable challenges in filing their annex ‘C’ for the current month.
This unexpected turn of events has elicited frustration and concerns among importers and traders who are now grappling with hurdles in fulfilling their tax obligations. The restrictions imposed by the FBR have significantly impeded their ability to navigate the tax filing process efficiently.
In summary, importers and traders in Pakistan are currently experiencing a predicament related to the filing of their monthly sales tax returns. This situation is directly attributable to the recent restrictions instituted by the Federal Board of Revenue, particularly those concerning the reporting of supplies based on specific H.S. codes. These restrictions have, unfortunately, complicated the tax compliance process, leaving importers and traders seeking solutions to navigate the intricate landscape of tax filing in Pakistan. The issue remains a matter of concern for this group of taxpayers as they grapple with the complexities of the updated tax filing system.