The FBR has issued SRO.191(I)2012 to amend Sales Tax Rules 2006, chalking out a new procedure for the registered manufacturers, importers and exporters. Interestingly, the FBR seems to have forgotten to rescind SRO821(I)/2011 or superseded SRO821(I)/2011 through SRO.191(I)2012. Now, two different above mentioned SROs are operative at the same time in the field formations on the same issue. The provisions of both the notifications are contrary to each other and are operative in the field formations. The SRO.191(I)2012 would be applicable from March 1, 2012 whereas the old SRO.821(I)2001 was applicable from January 1, 2012.
In SRO.821, there is 100 percent compliance of providing CNICs/NTNs of the un-registered buyers of registered manufacturer, importers and exporters. There is no condition of phase-wise implementation of the documentation measure to obtain CNICs/NTNs of the un-registered buyers under SRO.821. On the other hand, new SRO.191(I)2012 has announced procedure for implementation of the CNICs/NTNs under phased program. The FBR has to rescind SRO821(I)/2011 as two notifications simultaneously cannot operate at the same time, sources said.
According to the new rules for documentation of the un-registered buyers issued here on Friday, the new procedure would apply to registered manufacturers, importers and exporters, making taxable, dutiable or exempt supplies to unregistered person.
All registered manufacturers, importers and exporters, making taxable, dutiable or exempt supplies to unregistered person shall issue an invoice containing the "National Tax Number" (NTN) or "Computerised National Identity Card" (CNIC) number of such unregistered persons. This scheme shall, however, be implemented in a phased manner by the Board in five stages.
In sales tax return for the month of March, 2012 (to be filed up to 15th April, 2012), at least 60% of the sales shall be to identifiable persons whose STRN/NTN/ CNIC will be provided in the sales tax return.
In the sales tax return for the month of April, 2012 (to be filed up to 15th May, 2012), at least 70% of the sales shall be to identifiable persons whose STRN/NTN/CNIC will be provided in the sales tax return. In the sales tax return for the month of May, 2012 (to be filed upto 15th June, 2012), at least 80% of the sales shall be to identifiable persons whose STRN/NTN/CNIC will be provided in the sales tax return.
In the sales tax return for the month of June, 2012 (to be filed upto 15th July, 2012), at least 90% of the sales shall be to identifiable persons whose STRN/NTN/CNIC will be provided in the sales tax return. In the sales tax return for the month of July, 2012 (to be filed up to August 15, 2012) and every subsequent sales tax return, 100% of the sales shall be to identifiable persons whose STRN/NTN/ CNIC will be provided in the sales tax return.
As per SRO191(I)/2012, the rupee value of exports made during the month shall be included in the sales made to identifiable person for the purpose of calculation of mentioned percentages. In case, in any month, the supplies to identifiable persons fall short of the requisite percentages, input tax adjustment of that month shall be proportionately disallowed. Where any registered person gives an NTN or CNIC, which is not verified from the Board's database or database of the National Database and Registration Authority respectively, such person shall pay a penalty of Rs 5000 or three percent of the amount of tax involved, whichever is higher, which shall be included in the arrears appearing in the sales tax return for the subsequent month.
All payments of the amount for transactions shall be made by the buyers through a banking instrument from the bank account of the buyer as envisaged in section 73 of the Sales Tax Act, 1990. The registered person shall provide the buyer-wise details of each unregistered buyers in the monthly sales tax return. The manufacturers-cum-retailers and importers-cum-retailers making retail sales to unregistered persons shall not be required to provide CNIC/NTN to the extent of retail sale which shall be separately shown in the sales tax return, sources said.