Federation of Pakistan Chambers of Commerce and Industry urges Federal Board of Revenue that tax payers be allowed to adjust their accumulated carry forward amount of input tax

Karachi, August 13, 2012 (PPI-OT): Haji Fazal Kadir Khan Sherani, President FPCCI and Zakariya Usman Chairman FPCCI Working Group on Budget have urged the Chairman Federal Board of Revenue that the tax payers be allowed to adjust their accumulated carry forward amount of input tax.

They elaborated that after harmonization of sales tax rate in Finance Act 2012, the higher rate regime was eliminated which was generally welcomed. However, it has been observed that persons having accumulated carry forward amount in their sales tax returns pertaining to previous higher sales tax rates regime, were not provided any relief for its adjustment.

They added that previously such taxpayers were excluded from the applicability of section 8B of Sales Tax Act vide S.R.O 647(I) 2007 dated June 27, 2007 but after doing away with the higher Sales Tax rates regime in the current Budget, carry forward cannot be adjusted since condition of 8B is now applicable on them. Consequently such tax payers would be unnecessarily burdened to pay 10% sales tax despite of their accumulated carry forward amounts, pertaining to higher tax rates (upto 22%) regime, available to them, they informed.

The FPCCI Chief, Mr. Sherani disclosed that the FPCCI in its meeting held under the Chairmanship of Mr. Zakariya Usman, Chairman FPCCI Working Group on Federal Budget reviewed the whole scenario and after due diligence unanimously proposed that the tax payers who were paying higher input tax before budget should be allowed to adjust the carry forward amount till such time their input tax is completely utilized/adjusted, and as such a new category under SRO 647(I)/2007 be inserted for persons having accumulated amount of higher rate of input tax as on 2nd June 2012.

The President of FPCCI continued that refund of carry forward is not the solution at the present time when Government of Pakistan has proposed a staggering tax collecting target of Rs. 2.84 trillion for the present fiscal year. Further, he apprehended that refund of unadjusted carry forward amount shall increase the cost of compliance of tax payers consequently leading to corruption and palm greasing.

For more information, contact:
Syed Masood Alam Rizvi
Secretary General
Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
B-1, Federation House, Main Clifton Road,
Shahra-e-Firdousi,
Karachi-75600, Pakistan
Tel: 0092-21-35873691, 93-94
Fax: +9221 3587 4332
Email: info@fpcci.com.pk
URL: www.fpcci.com.pk

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