GOVERNMENT OF PAKISTAN
CENTRAL BOARD OF REVENUE
(SALES TAX WING)
Islamabad, the 27th May, 2004.
SALES TAX GENERAL ORDER NO.2/2004.
Subject:- CONDONATION OF OUT-OF-TAX PERIOD INPUT ADJUSTMENT.
It has been reported to the Board that a number of cases have been made out and are pending in adjudication or appeal due to the fact that the input tax was claimed or adjusted by the registered person out of the relevant tax period.
2. In several such cases, the Appellate Tribunal or the High Court ordered for waiver of additional tax and penalty on the ground that this was merely a procedural lapse on the part of the taxpayer in which no loss of Government revenue was involved. In fact, in cases where the taxpayer claimed input tax adjustment in a period subsequent to the period in which it should have actually been claimed in terms of section 7 of the Sales Tax Act, 1990, the taxpayer has suffered a loss on account of such late claiming and excess payment of tax in the correct tax period.
3. Since late claiming of input tax is only a procedural lapse and no loss of the Government revenue is involved, the Board, in exercise of powers under section 74 of the Sales Tax Act, 1990, is pleased to condone the delay in claiming or adjusting input tax, provided the following conditions are fulfilled:
(i) the tax invoice or bill of entry on which input tax is claimed is genuine, in the name of the claimant, and contains all details specified in section 23 of the Sales Tax Act, 1990;
(ii) no input tax adjustment has earlier been taken on the same tax invoice or bill of entry;
(iii) in case of a tax invoice, payment was made in terms of section 73 of the Sales Tax Act, 1990; and
(iv) in case the input tax adjustment was claimed after three months of the tax period in which it should have been claimed in terms of section 7, the registered person files an application to the Collector of Sales Tax having jurisdiction giving reasons for such delay, and such Collector, on being satisfied that no input tax has been previously claimed or adjusted on such tax invoice or bill of entry, issues a written order permitting such adjustment.
4. Thus, all cases in which input tax was claimed or adjusted by a registered person within three months after the tax period in which it should actually have been claimed in terms of section 7 of the Sales Tax Act, 1990 stand condoned and the taxpayers need not approach any official of sales tax for this purpose. The fulfillment of the conditions mentioned above shall be verified at the time of audit. However, in cases where input was claimed after three months of the appropriate tax period, an order of the Collector of Sales Tax concerned is required for availing the benefit of this General Order.
(Dr. Ashfaq Ahmed Tunio)