The Federal Board of Revenue (FBR) has introduced a new rule for businesses registered for sales tax. This article explains the rule and its implications.
Rule:
If your monthly sales exceed five times your initial business investment, you must inform the FBR Commissioner.
What Documents Are Required?
- Supporting documents justifying the high sales.
- Details of customer payments (including invoices).
- Customer profiles and tax registration numbers.
Background:
This rule aims to combat fake invoices used for tax evasion. Previously, businesses created fake supply chains to inflate input taxes and reduce their payable tax.
How Does This Rule Help?
- Identifies businesses with unusually high sales compared to their investment.
- Allows FBR to investigate potential tax evasion through fake invoices.
Consequences of Non-Compliance:
- FBR may block your tax return filing.
- Further action could be taken based on your business status.
Conclusion:
This new rule helps FBR monitor businesses and reduce tax evasion through fake invoices. Businesses with genuine high sales should not be concerned, but those using fake invoices will be identified.
