Centralized sales tax registration hits business activities

KARACHI (April 07 2005): Business activities in the cosmopolitan city have been seriously marred due to the delay in Centralised Sales Tax Registration by the Central Board of Revenue (CBR) in Islamabad.

The new centralised system introduced for registration under Sales Tax in the budget last year takes one month as compared to a week consumed in the previous localised system. Those willing to start a business would have to wait for a month after the office premises or a factory is ready for operation. There is no urgent procedure like taking an urgent passport in such cases, taxpayers said during an interaction with Business Recorder.

The taxpayers have urged the CBR to reverse the centralised system of issuing registration certificate and make arrangements to issue the documents from the concerned city.

They said that under the CBR tax reform initiative all tax procedures had been streamlined including the Customs Administrative Reform project (Care) which drastically reduced the customs clearance time. However contrary to the objectives of the CBR reforms a sales tax registration was issued in 30 days.

According to details, in order to eliminate corruption through minimising taxpayers and tax collectors interaction, applicants for sales tax registration are required to send their application through courier to the Sales Tax House in Karachi.

The application is referred to the CBR in Islamabad which registers the applications and sends it back to Karachi to the Sales Tax inspectors who visit the business premises mentioned in the application to verify the address and phone contacts of the applicant as well as the nature of business. Some supportive documents are also verified.

The applicants are also required to provide their National Tax number (NTM), bank account number and electricity accounts number to be eligible for Sales Tax registration.

The verification report is then sent back to CBR in Islamabad, which dispatches the registration certificate directly to the applicant through courier. The whole procedure takes one month depriving the new incumbents from their right to carry out business at an opportune time.

The applicants waiting for a registration certificate are asked to enter their NTN in the CBR website to know the status of their application but in most cases there is no relevant information available on line.

A sales tax registration is essential to carry out any commercial activity including sales and purchase of goods.

Sources at the registration counter in Sales Tax House said on Wednesday that most of the applicants for registration were wholesalers since the government departments had been advised not to do any business with the unregistered suppliers.

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