The Sales Tax system in Pakistan can be complex and cumbersome, especially for small business owners. However, the recent amendment to the Sales Tax Rules 2006, via S.R.O numbered 51(I)/2022, has provided relief to taxpayers looking to deregister from the Sales Tax.
Previously, when a taxpayer filed an application for deregistration, they were still required to file sales tax returns on a monthly basis until a decision was made. This created an unnecessary burden on taxpayers, especially those who were no longer operational or whose supplies had become exempt.
Under the new rules, taxpayers are now allowed to stop filing sales tax returns from the moment they file an application for deregistration. During the pending time frame, until a decision is made, no fines or default surcharges will be charged. This is a significant relief for taxpayers, who previously had to bear the burden of filing returns even when they were no longer required to pay Sales Tax.
Furthermore, the Commissioner previously asked for an audit of the last five tax years when an application for deregistration was filed. This was a tedious and time-consuming process that added additional burden to taxpayers in terms of filing fees for lawyers/consultants. However, under the new rules, if the Commissioner wants to inquire or audit any documents to determine liability, they must provide the applicant with a written list of the requisite documents. Once all the documents are received, an entry will be made in the computerized system, which will automatically deregister the applicant on expiry of ninety days thereof.
This streamlined process saves time and money for taxpayers and makes it easier for them to deregister from the Sales Tax. The application for deregistration is available on the online Iris portal, in addition to the manual application already available to taxpayers.
In conclusion, the recent amendment to the Sales Tax Rules 2006 via S.R.O numbered 51(I)/2022 has provided much-needed relief to taxpayers looking to deregister from the Sales Tax. The new rules make the process of deregistration more streamlined and efficient, saving time and money for taxpayers. The online application process and the simplified audit process will make it easier for taxpayers to navigate the Sales Tax system in Pakistan.