Serious issues between the Federal Board of Revenue (FBR) and the Sindh Revenue Board (SRB) on payment of input tax adjustments and filing of the National Sales Tax Return have surfaced, creating differences between the federal tax agency and provincial revenue board.
Highly-placed government officials told Propakistani on strict condition of anonymity that recently a meeting was held at the FBR Headquarters which was attended by the senior officials of the Punjab Revenue, Authority (PRA), Sindh Revenue Board, the Khyber-Pakhtunkhwa Revenue Authority, and the Balochistan Revenue Authority. The meeting was held to discuss the issues of the tax credit, cross-input tax adjustment, and National Sales Tax Return.
The FBR claimed that the SRB has to deposit the amount to the FBR on account of a cross-input tax adjustment. On the other hand, the FBR will have to deposit the amount to the remaining provincial revenue authorities and boards except the SRB. Taking serious notice of the situation, the official of the SRB rejected the claim of the tax authorities, and the meeting remained inconclusive. The provincial revenue board was unhappy over the FBR’s stance of depositing any amount to the FBR under the head of the tax adjustment. The meeting between the FBR and the provincial revenue authorities and boards failed to take decisions.
In December 2020, Punjab Revenue Authority (PRA) obtained an amount of Rs. 16.586 billion from the FBR on account of cross-input tax adjustment for the years 2012-13 to 2018-19. The Khyber-Pakhtunkhwa Revenue Authority had also received a similar transfer worth Rs. 1.4 billion from the FBR.
On January 7, Finance Minister, Shaukat Tarin, launched the “National Sales Tax Return” for all federal and provincial sales taxpayers with the resolve that it would promote standardization of taxability and tax rates and automatic input credit and refunds. The representatives of provincial revenue authorities or boards, except for the Punjab Revenue Authority (PRA), did not attend the launch ceremony of the National Sales Tax Return for all federal and provincial sales taxpayers held at the FBR Headquarters.
The representatives of the Sindh Revenue Board, the Khyber-Pakhtunkhwa Revenue Authority, the Balochistan Revenue Authority, the AJK Council Board of Revenue, and the Gilgit-Baltistan Revenue Authority were invited to the ceremony. The FBR had also invited the chief ministers/finance ministers of all the provinces, but they too were not in attendance.
In a new development, the FBR has constituted a committee comprising provincial revenue authorities/boards to resolve issues of the national sales tax returns for federal and provincial taxpayers.
The FBR’s notification said, after obtaining nominations from the provincial revenue authorities, the committee has been constituted, including Abdul Hameed Sheikh, Chief (provincial taxes) FBR (convener of the committee).
Other members of the committee included Noman Malik, Chief-IT FBR; Pasand Khan Buledi, Chairperson Balochistan Revenue Authority; Abdul Hameed Memon, Senior Member Sindh Revenue Board (SRB); Muhammad Iqbal Lakho, Commissioner SRB; Abdur Raziq Khan, Director Khyber-Pakhtunkhwa Revenue Authority; Ali Mansoor, Commissioner Audit Punjab Revenue Authority; Additional Commissioner Punjab Revenue Authority, and other senior officials of the provincial revenue authorities.
