The Karachi Tax Bar Association (KTBA) has identified a technical issue within the Federal Board of Revenue’s (FBR) IRIS portal that is hindering the filing of final sales tax returns. This problem follows the issuance of SRO 350, a statutory regulatory order.
What’s the Problem?
A new provision in SRO 350, introduced under rule 18(3) of the Sales Tax Rules, stipulates that a buyer’s sales tax return is considered provisional until the corresponding seller files their return for the same period. If the seller fails to meet the deadline, the system automatically removes the invoices issued by that seller from the buyer’s Annexure “A” (list of purchases).
The Technical Limitation:
However, the current IRIS portal doesn’t allow for adjustments in Annexures A and F for provisional returns. This means that if a seller doesn’t file their return on time, the buyer’s unsubmitted purchase invoices are automatically excluded from Annexure A, leading to a reduction in purchase value and input tax adjustments in Annexure F (tax paid on purchases).
The Resulting Issue:
This reduction in purchase value creates a negative net value in Annexure F, while the value of consumption/sold goods remains unchanged. This triggers an error message in the IRIS system: “NSTR-Negative Value(s) are not allowed in Annex F or Annex G Or Return,” effectively preventing the submission of final sales tax returns.
KTBA’s Appeal:
The KTBA President, Syed Zafar Ahmed, has urged the FBR to intervene and address this technical glitch. Proposed solutions include enabling edits within Annexure F or exploring alternative measures to facilitate the filing of final sales tax returns.
Impact and Next Steps:
This technical issue creates challenges for businesses and individuals trying to comply with filing requirements. The KTBA is working with the FBR to find a swift resolution to minimize disruption and ensure a smooth filing process. Stakeholders await a prompt solution from the FBR to address this technical barrier.
