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FILING OF SALES TAX RETURNS IN PAKISTAN

Your Online Lawyers Community > Blog  > FILING OF SALES TAX RETURNS IN PAKISTAN

FILING OF SALES TAX RETURNS IN PAKISTAN

Sales Tax is a tax levied by the Federal Government under the Sales Tax Act, 1990, on sale and supply of goods and services and on the goods imported into Pakistan.

REGISTRATION

Who is to be registered?

  1. All importers
  2. All wholesalers (including dealers) and distributors
  3. Manufacturers not falling in cottage industry. {Cottage industry is defined as having annual turnover below Rs.5 million and whose annual utility bill (including electricity , gas and telephone) does not exceed rupees six hundred thousand}.
  4. Retailers (having value of supplies of over 5 million rupees, in any tax period during the last 12 months.
  5. A person required under any Provincial or Federal Law to be registered for purpose of any duty or tax collected or paid as if it were a levy of sales tax, e.g. service providers like hotels, clubs, caterers, customs agents, ship chandlers, stevedores, courier services etc.
  6. Persons making zero-rated supplies, including commercial exporter who intends to obtain sales tax refund against his zero rated supplies.
  7. A person who is required to be registered by virtue of aforesaid criteria, but still avoids registration, can be compulsorily registered by the department, after proper enquiry, under sub-rule 1 of Rule 6 of Sales Tax Rules, 2006.

Procedure of Registration

  1. The application may be submitted electronically on Form STR-1 as well as either through post or courier services to Central Registration Office (CRO).

Application can also be sent to Local Registration Office (LRO) in the form of hard copy. The LRO after proper scrutiny of documents and necessary editing of the application and particulars, electronically forwards the application to CRO.

  1. All the columns of the Forms have to be duly filled in as per instructions given with the Form.
  2. After verification, the Central Registration Office will issue a Registration Certificate bearing registration number and mail the same to the Registered Person, on a prescribed Form (STR-5) Office (CRO) normally verifies the contents from the data available with it, but has an authority to get an enquiry conducted through Local Registration Office, to verify contents of declaration by a person. The CRO may reject the application within fifteen days from the date, the complete application is received in CRO, under intimation to the applicant, specifying the reasons for such rejection.

Where a Person is to be Registered?

  1. A corporate person (listed/ unlisted public company, private limited company) has to be registered under the Collectorate where the registered office of the business is located.
  2. A non-corporate person is to be registered under the collectorate, where the business is actually carried on.
  3. In case of non-corporate person having single manufacturing unit and the same

is located in a different place than the business premises, in the Collectorate having jurisdiction over the manufacturing unit. A corporate person has the option of transferring his registration to the place of business formation.

Documents needs to be furnished for registration

  1. Complete business name
  2. Business nature, main / activity or service;
  3. Complete address of Head Office and all business units,godowns,outlets mentioning, phone, fax, e-mail, electricity, gas consumer no. etc.
  4. All Bank account numbers, with name and address.
  5. NTN (National Tax Number)
  6. NIC (National Identity Card Number) of the owner, partners or directors of the business (passport number in case of foreigner).
  7. In case of a company, registration number and date of incorporation.
  8. Every director / member of AOP has to fill in STR – 1 (A) Form.
  9. Date of commencement of business and initial capital employed.
  10. The mode of maintenances of business records should also be mentioned.

FILING OF SALES TAX RETURNS

A Sales Tax return is the taxpayer’s document of declaration through which taxpayer not only furnishes the details of transactions during a tax period but also deposits his Sales Tax liability. On the return form, the taxpayer declares for a particular tax period and respective input tax and output tax, at prescribed rate of Sale Tax. In case input tax exceeds output tax, the amount of refund claimed or excess input tax is also declared in the return. For different categories of taxpayers, monthly,quarterly or annual returns may be filed on prescribed format as follows:-

Monthly Return

Under the standard procedure a registered person is required to file monthly return by the 15th day of the month following the period in which the supplies were made, in the designated branches of National Bank of Pakistan. In case of certain categories as mentioned below procedure has been devised to file return on monthly and quarterly basis.

Quarterly Return

The taxpayers falling exclusively in the category of commercial importer, i.e the importer who imports taxable goods for business activity other than industrial use of such goods or manufacturing by himself, is required to file the return on quarterly basis.

Annual Return

A private or public, Ltd Company is to file annual Sales Tax return, for a financial year by the 30th September of the following financial year.

Electronic Filing

Facility of Electronic filing of Sales Tax return has also been made available to the following categories of registered persons.

a). the registered persons falling in the jurisdiction of the Large Taxpayers Units, Karachi and, Lahore.

b). the private and public Ltd companies registered in any

Collectorate of Sales Tax.

c). other taxpayers who may like to opt for electronic filing of sales tax returns. The procedure for e-filing has been laid down in the Sales Tax General Order

No.4/2007.Aregistered person shall obtain a unique identifier and password by visiting FBR’s web portal at e.fbr.gov.pk. He can then file the return by selecting declaration “sales tax” from the web portal. The return data shall be filled in a web

form and directly transferred to FBR’s server.

Source Document:

Sales tax guide (Taxpayer’s facilitation guide)

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