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Notices on 'further tax' adjustment against input levy issued

ISLAMABAD (October 18 2003): To recover billions of rupees from the business community, the Central Board of Revenue (CBR) has decided to serve notices to all those taxpayers who have adjusted 'further tax' against the input tax in their sales tax returns.

Official sources told Business Recorder hereon Friday that due to amendment in section (7) of the Sales Tax Act,1990 in budget 2003-04, 'further tax' charged by a registered person on supplies to non-registered buyers during a tax period would not be adjustable against the input tax for that tax period.

Therefore, the amount of 'further tax' charged should be deposited, irrespective of the fact whether input tax is carried forward or not.

Despite this announcement in the last budget, many taxpayers have charged and declared further tax in the monthly sales tax returns.

Sources observed that the regional collectorates have ascertained the implementation status of this amendment by using tax return filed up to September 15, 2003.

The exercise showed that registered persons have adjusted 'further tax' to the tune of billions of rupees. Now, this amount would be recovered under section 11(a) and, at the same time, the defaulting taxpayers would be educated about the implication of this provision.

It was pointed out that non-payment of further tax is determined on the basis of following parameters, and computer software for short filers has been changed accordingly.

Firstly, non-payment of further tax; in case where bank payment on returns is nil (input tax carried forward) while further tax has been charged and declared in monthly return.

Secondly, non-payment of further tax; in cases where the net amount of bank paid on return is less than the amount of further tax charged and declared in relevant column of the monthly return.

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