The Federal Board of Revenue (FBR) has issued a new standard operating procedure (SOP) to streamline the process for registered persons seeking an extension of the time limit for filing sales tax returns. This new procedure is outlined in Sales Tax Circular No. 05 of 2024.
Key Points of the New SOP:
- Application Process: Registered persons must submit an application to the Commissioner of Inland Revenue (IR) with jurisdiction over their tax affairs. The application should specify the reasons for the delay, referencing the guidelines set forth in SR0.1444(1)/2024 dated September 12, 2024.
- Condonation Beyond Three Years: For delays exceeding three years, the Commissioner-IR will review the application and supporting documentation before forwarding a recommendation to the FBR board. This recommendation format includes a checklist covering key aspects of the case, such as the reason for delay, potential revenue impact, and system glitches.
- Decision Timeline: The Commissioner-IR must send their recommendation to the FBR board within 15 working days of receiving the application. This timeframe may be extended if the Commissioner requests further information from the applicant.
- FBR Review and Communication: Upon receiving the Commissioner-IR’s recommendation, the FBR board will review the request and make the final decision. The board will then communicate the approval or rejection to both the Commissioner-IR and the applicant.
Superseded Circular: This new circular replaces Sales Tax Circular No. 01 of 2024/IR Operations, dated March 4, 2024.
Benefits of the New SOP:
- Clearer Guidelines: The new SOP provides a more defined process for seeking time extensions, ensuring registered persons understand the required steps and supporting documents.
- Standardized Review: The checklist format for Commissioner-IR recommendations guarantees a consistent evaluation process for all applications.
- Improved Communication: The defined timelines for both Commissioner-IRs and the FBR board aim to expedite the decision-making process and enhance communication with applicants.
Who Should Read This?
This information is particularly relevant to registered persons under the Sales Tax Act, 1990, who may require an extension for filing their sales tax returns.
