The Federal Board of Revenue (FBR) has taken significant steps to address the challenges faced by sales taxpayers by amending the conditions for filing corresponding sales tax returns to claim input tax for various sectors. This change was formalized through the issuance of SRO.1130(I)/2024 to amend the Sales Tax Rules, 2006.
Following a detailed discussion by a tax expert regarding SRO.1130(I)/2024, it has been revealed that the FBR has made further amendments under this regulation in an effort to streamline the sales tax return filing process, which has been a persistent issue.
The key modification introduced through SRO.1130(I)/2024 is the relaxation of the requirement to file corresponding sales tax returns for the purpose of claiming input tax. This relaxation applies to specific categories of supplies, as the application of the second proviso to sub-rule (3) of rule 18 has been excluded for the following sectors, effective from March 7, 2024:
- Gas transmission and distribution companies
- Electricity distribution companies
- Independent power producers or WAPDA
- Third Schedule items supplied to distributors, wholesalers, retailers, manufacturers, or traders
- Manufacturers who have already settled sales tax liabilities for items as per the return
- Petroleum exploration and production companies
- Registered persons as buyers, provided their suppliers have paid their sales tax liabilities as re-computed by the application of the second proviso to sub-rule (3) of rule 18 after the deletion of invoices, along with corresponding input tax, within six days from the end of the month in which their returns were considered provisional.
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