FBR asked not to charge additional 3pc from NTN holders

Monday, Mar 21, 2022

LAHORE: Friends of Economics & Business Reforms (FEBR) Sunday asked the Federal Board of Revenue (FBR) do not consider NTN holders as registered persons in Sales Tax Act. Majority of the manufacturers and importers issue sales tax invoices to retailers who are not required to be registered in sales tax and they have to charge them additional 3 percent after 17 percent which becomes their additional cost.

It is requested to ask FBR not to charge additional 3 percent Sales Tax from those persons/retailers who have NTNs.

Additional 3 percent should be charged from those customers who have only CNICs. In budget proposals, the FEBR President said fines/penalties/surcharges should not be charged from those persons where no tax amount is involved.

Wherever tax amount is involved, tax amount should be recovered from the regular taxpayer with minimum penalty as defined in the law.

The condition of POS integration for Tier-1 retailers who have 1,000 square feet shop area should be removed as there is no correlation of area with turnover. Secondly, area for retailers in air-conditioned Mall should be defined as there are many small retailers who have shops in air-conditioned Malls. It is requested to change this law by making it mandatory for retailers to get themselves registered in NTN who have 1,000 square feet shop area and have not already registered in tax.

As per law, a registered person can have multiple audits in a year like income tax audit, sales tax audit, computer balloting audit, commissioner audit and so on. It is requested to fix the number of audits by maximum one in a year of any type. FEBR president Kashif Anwar said that in order to provide facilitation to taxpayers, action should be taken against those assessing officers who make wrong assessments and their orders are reverted back by higher courts & tribunal. He added that a stay order is granted by Commissioner Appeal / Appellate Tribunal for limited number of days. It is requested that Stay Order by Commissioner Appeal / Tribunal should be valid until disposal of the case. It will reduce wrong assessment orders by officers, bank attachments of taxpayers and increase the settlement of cases in higher courts.

Further, the FEBR president stated that the State Bank of Pakistan had announced 7.25 percent profit on amounts in Saving Accounts.

It was observed that only Conventional Banks were giving 7.25 percent profit on savings and Islamic Banks were not following this instruction. The instructions should be issued that all banks to give 7.25 percent to their clients, which would boost Islamic Banking. Similarly, the auto manufacturers through their dealers book new cars against partial payments and discourage full amount pay orders/draft initially. They do this practice to avail the benefit of time and price-hike of automobiles. They should be instructed to receive full payment pay orders at time of booking. It will save consumers from price-hike, secondly, it will curtail “own” pricing on vehicles.

The FEBR believed that the proposals would help to enhance tax base and reduce problems for taxpayers. —Jawwad Rizvi