FBR amendments halt sales tax return filings, causing business panic

ISLAMABAD: Filing of sales tax returns by registered taxpayers has been virtually halted due to several amendments introduced by the Federal Board of Revenue (FBR) in the last two months.

According to media reports, the FBR needs to take steps to overcome the panic situation in the business community. Due to the technical amendments of the FBR and the obstacles created by the tax authorities, most sales taxpayers are unable to file their returns for February and March.

Instead of solving the problems, the FBR has made the situation more complicated for the sales taxpayers by making several amendments. The FBR needs to resolve this issue to restore the filing of sales tax returns by registered individuals.

The FBR had extended the date for submission of sales tax and federal excise returns for the tax period of March 2025 to April 25, 2025.

FBR introduces revised Sales/Purchase Annexure for filing monthly sales tax returns

According to details, it was learnt that recently FBR introduced requirements for reporting 8-digit H.S. code along with U.O.M. However, these requirements were not formally incorporated in the sales tax rules. Now, FBR has introduced similar amendments in the sales tax rules to provide legal protection to these requirements, vide notification 578…

The FBR, while introducing the amendment, also introduced a new Annexure C-1 which requires details of proof of payment/banking instruments. In terms of section 73, it is necessary to note all payments above Rs. 50,000 need to be made through proper banking channel.

Commenting on these amendments, a tax expert said that filing of sales tax returns has become more complex and detailed. The government is introducing new requirements day by day without understanding the practical problems, compliance costs and the growing concern for a highly burdened narrow tax base. In his opinion, the period for introducing these new regulations should also be extended.