ByKTBA highlights technical issues in the IRIS system, blocking timely sales tax return revisions, urging FBR to take immediate corrective action for compliance.
Karachi Tax Bar Association (KTBA) raised significant concerns over the IRIS portal’s inability to facilitate the auto-revision of sales tax returns, causing unnecessary complications for taxpayers seeking to amend their declarations. In a formal communication addressed to Ms. Aisha Farooq, the Director General of Withholding Taxes at the Federal Board of Revenue (FBR), KTBA highlighted a key technical issue that is preventing the timely and efficient revision of sales tax returns under the provisions of the Sales Tax Act, 1990.
Legal Framework for Sales Tax Return Revision
At the core of the issue lies Section 26(3) of the Sales Tax Act, 1990, which grants registered taxpayers the ability to submit a revised sales tax return within 120 days of filing the original return. This provision is intended to provide a corrective mechanism for taxpayers to address errors or omissions in their initial filing.
Under the usual procedure, submitting a revised return requires approval from the Commissioner of Inland Revenue. However, there is an important exception to this rule. If the revision is submitted within 60 days of the original return and leads to an increase in tax payable or a reduction in the refund claim, the approval requirement from the Commissioner is waived, allowing taxpayers to make necessary adjustments without additional bureaucratic delays.
Technical Glitch in IRIS System
Despite the clarity of the legal framework, KTBA has raised concerns over a significant technical glitch in the IRIS system, which is preventing taxpayers from revising their sales tax returns within the 60-day window, even when an additional tax payment is made. The issue primarily stems from the IRIS portal failing to recognize and process revisions under these specific conditions, thereby violating the provisions of Section 26(3).
KTBA President Ali A. Rahim expressed frustration with the malfunctioning system, stating, “The IRIS portal fails to allow revision within 60 days despite the additional tax payment, which is in clear violation of the proviso to Section 26(3) of the Sales Tax Act, 1990.” This glitch has created a situation where taxpayers are unable to revise their returns in a timely manner, even when they meet all the legal criteria for revision.
KTBA’s Call for Immediate Action
Given the serious implications for taxpayers, KTBA has urged the Federal Board of Revenue (FBR) to take immediate action. The association has called on FBR officials to intervene and direct the necessary corrections to the IRIS system to ensure that it aligns with the requirements set forth in Section 26(3) of the Sales Tax Act.
KTBA’s message is clear: automatic revision of sales tax returns within the 60-day window should be permitted without requiring the approval of the Commissioner of Inland Revenue when all conditions—such as an increase in tax payable or a decrease in refund claims—are met.
KTBA believes that resolving this technical issue will lead to a more efficient and legally compliant process for taxpayers. A smooth and seamless revision process would not only save time but also eliminate unnecessary bureaucratic barriers that could otherwise delay the correction of tax returns. By addressing these concerns promptly, the FBR would ensure that taxpayers can comply with the law without facing technological roadblocks.
Looking Forward
The current technical issues with the IRIS portal highlight a significant barrier for taxpayers seeking to revise their sales tax returns under the law. KTBA’s request for intervention is a call for urgent action to resolve the glitch and bring the system in line with the provisions of the Sales Tax Act, 1990. By doing so, taxpayers will be able to fulfill their legal obligations and rectify any mistakes or omissions in a timely and efficient manner, avoiding further complications and delays in the process.
