Sales Tax Return Filing Grinds to a Halt Amid FBR Amendments

The sales tax return filing has been practically stopped by the registered taxpayers due to multiple amendments introduced by the Federal Board of Revenue (FBR) during the last two months. Tax experts told ProPakistani that the FBR needs to take steps to control a panic-like situation among the business community. Most of the sales taxpayers are unable to file returns for February and March due to the FBR’s technical amendments and bottlenecks created by the tax officials. Instead of resolving problems, the FBR has further complicated the situation for the sales taxpayers by introducing multiple amendments. The FBR needs to address the issue to restore sales tax return filing by the registered persons. The FBR has extended the date of submission of Sales Tax and Federal Excise Return for the tax period of March 2025 up to April 25, 2025. FBR has introduced modified sales /purchase annexures for the filing of monthly sales tax returns According to the details, it was learned that recently, FBR has introduced requirements for reporting 8-digit H.S code with U.O.M however, these requirements were not formally incorporated in sales tax rules. Now, the FBR has introduced corresponding amendments in the sales tax rules to extend legal protection to these requirements. The FBR, while introducing the modification, also introduced a new annexure C-1 requiring details of payment proofs/banking instruments. It’s imperative to note that in terms of section 73, all payments above Rs. 50,000 are required to be made through a proper banking channel. The tax expert, while commenting on these amendments, informed that sales tax return filing is becoming more complex and detailed. The government is introducing new requirements day by day without realizing the practical problems, compliance costs, and increasing hassle for a highly burdened narrow tax base. In his opinion, the time limit for filing these new annexures should also be increased.