Daily Times

The Federal Board of Revenue (FBR) on Monday issued standard operating procedure (SOP) for enrolment with FBR system of persons registered with Azad Jammu Kashmir (AJK) and Gilgit-Baltistan (GB).

The FBR said that the Sales Tax Act, 1990 mandates a registered person (RP) with the Federal Board of Revenue (FBR) to claim input tax credit on supplies made to RPs registered with Azad Jammu & Kashmir (AJK) Tax Department and vice versa. Rule 161 of the Sales Tax Rules, 2006, however, warrants that RPs registered with AJK Tax Administration to have enrolment with FBR so as to be able to avail the benefits of input adjustments.

Apart from a few isolated memoranda issued every now and then, no systematic set of instructions has so far been formulated. Similar instructional void exists when it comes to Gilgit-Baltistan (GB) registered persons intending to undertake imports/exports and have to enroll with FBR’s WeBOC System.

The sub-rule (3) of Rule 161 supra also stipulates that “when the AJK authorities institute e-filing for their registered persons, the adjustment as aforesaid shall only be available against electronic data of supplies as provided to the Board by AJK authorities.” In the intervening period when AJK Tax Department and Pakistan Revenue Automation Limited (PRAL) were negotiating and signing the Service Level Agreement (SLA), cross adjustment of input tax credit was allowed manually. Rule 161(2) warranted all AJK-RPs to “furnish an undertaking that they will provide their supply record and the return filed in AJK” as and when required by the respective RTO or LTO, where their buyers are registered to ascertain correctness of their sales. In anticipation of signing of the SLA between AJK Tax Department and PRAL, manual adjustments stand disallowed.

Accordingly, it has been decided that hereinafter, in order to ensure certainty, transparency and across-the-board, standard operating procedures (SOPs) are being devised that shall govern enrolment of AJK and GB RPs with FBR systems for all purposes. The FBR said that the SOPs laid down in this STGO, mutatis mutandis, would also apply to the GD registered persons as and when requirements for the same are met.