KARACHI: The Karachi Tax Bar Association (KTBA) has identified problems faced while submitting final sales tax returns on the Federal Board of Revenue (FBR) portal.
In a letter to the FBR on Thursday, President of the KTBA Syed Zafar Ahmed explained that anew provision was inserted in March this year under Rule 18(3) of the Rules through SRO350. Per this amendment, a sales tax return submitted by a buyer would be treated as
a provisional return until the respective seller also files his return for the same tax period up to the last date of the month.
Where the seller fails to do so, Iris calculates the sales tax liability of the buyer after deleting those invoices from Annexure A issued by the non-filer supplier.
According to the president of the Karachi Tax Bar Association , it has now been observed that the FBR portal restricts any adjustments in any of the annexures, including those in Annexures A and F, to the provisional return.
After the end of the month, unsubmitted purchase invoices are automatically removed from Annex A. Consequently, the value of purchases and their input tax adjustments are automatically reduced in Annexure F.
As a result, the net value of purchases reduces to negative in Annex F, while the value of consumption or sales remains the same. It is due to this technical issue that Iris is not allowing the submission of final returns and shows a pop-up message when submitting final returns, which says ‘NSTR-Negative Value(s) are not allowed in Annex F or Annex G’ or 'Return'.
The Karachi Tax Bar Association has requested the FBR to either allow editing of Annex F or suggest any other way out so that sales tax returns can be submitted.