Explaining the decision, CBR officials told Business Recorder that the automobile companies have been given an option to issue sales tax invoice at the time when full payment is received at the time of delivery of the product, saying the facility is available for the industry, and it is up to them to avail the same or not.
Previously, the automobile companies used to issue two different sales tax invoices. First, invoice was being issued at the time of advance payment, and secondly, when full payment was received, they said, adding this procedure was creating unnecessary hardships for the entire sector.
Now, the CBR has given them a procedural relaxation to save them from unnecessary documentation. They are no more required to issue sales tax invoice on part payment instead they will issue a receipt. Later, they will issue only one sales tax invoice at the time of delivery of goods.
According to the CBR instructions, for the part payment received in a tax period, it has been allowed to issue "formal receipt" to the extent of the advances received. However, sales tax chargeable on the advance/part payment shall be accounted for in the return for that period, in which the advance/part payment is received as per clause (44) of section 2 of the Sales Tax Act, 1990.