If you are planning to start a business in Pakistan, you'll very soon learn about the sales tax return procedural. For an organized businessman, this procedure simply comprises of official forms, a proper records set, an operational calculator along with some of their time. In Pakistan, sales tax is imposed by the Federal Government on the imported goods as well as goods and services sold and supplied in the country.
The document of declaration by a taxpayer by means of which he/she provides the particulars of trades and transactions within a tax duration and also deposits his/her Sales Tax obligation is known as sales tax return. The taxpayer through this return affirms for a specific tax duration and corresponding output and input tax, at the approved sales tax rate. There are different kinds of prescribed formats for filing returns for different types of tax payers i.e. yearly, quarterly or monthly returns.
Who is eligible to register?
People falling in any of the below mentioned categories are required to register for sales tax:
- Every importer
- Every wholesaler that includes all dealers as well as distributors
- Every manufacturer other than the ones with annual turnover less than five million rupees and their yearly utility bills (telephone, gas and electricity) do not six hundred thousand rupees
- Every retailer that during a tax year owns supplies worth more than five million rupees
- Every service provider, for instance, custom agents, hotels, restaurants, caterers, courier service, ship dealers and loaders etc.
- All those who acquire sales tax refunds for their zero rated provisions
Where to register?
A corporate individual having a private or public limited corporation is required to register under the designated collectorate in the area where the company is located while a non-corporate individual is to be listed in the collectorate in the area where the business is taking place.
If the non-corporate individual has only one manufacturing place which is set in a different location than the corporate location then the collectorate has the authority covering the manufacturing place. A corporate individual has the choice of relocating his registration where his business place is formed.
What documents are required for registration?
Following documents should be available while applying for sales tax registration:
- The complete and clear name of company/business
- The nature of the business
- The exact address of the business location including each and every business unit, head office, outlets, warehouses along with complete email addresses, gas and electricity consumer numbers, fax and phone numbers etc.
- The NIC numbers of business directors, partners or owners
- The National Tax Number (NTN) of the business
- The details of business bank accounts with names and account numbers.
- The incorporation date and registration number of the company
- The duly filled Form STR-1(A)
- The complete details regarding the commencement date of business and the amount of capital involved initially
- The method of business records upkeep
How to File Sales Tax Returns?
You have to follow certain steps to file sales tax return in Pakistan.
- Sales tax return forms can be downloaded from Federal Board of Revenue (FBR)’s official website i.e. www.fbr.gov.pk.
- The next step is to login with your company’s user ID and password. A window will appear showing your company’s profile and previously submitted return files.
- Now click on declaration, if you wish to file sales tax return for a certain month. Select tax year and month for which you’re filing the returns.
- The fourth step is to open the Annexure C window. Now click on Add Sale Invoice button and submit your monthly sales. You can view your sales tax profile after adding your monthly sales.
- Next step is to go to Annexure A and clicking on the search button. This will take you the window showing all the monthly purchases. Select them all.
- Now go to e.fbr.gov.pk and make PSID It is created with e-payments.
- When you're done with PSID, submit Annexure C and confirm the return.
- You will find a feed CPR button after confirming the return. Click on it and attach the mandatory CPR of the month.
- Now to finish, go to process & submit button. Your sales tax returns will be submitted successfully.
Important Points to Remember:
- Make sure you submit Annexure C before the 10th of every month.
- PSIDs should be submitted by the15th of each month.
- The entire sales tax returns filing procedure should take place by the 18th of very month.
Thus, the preparation and filing of sales tax returns is fundamental of your tax knowledge and compliance. It is very important that you comprehend the process well. In this regard, accounting software like LedgerMax can help you stay efficient and mindful of your tax processes and file the returns on time.