The Sales Tax Act, 1990, is a law that governs the taxation of goods and services in Pakistan. The Act provides for the imposition of sales tax at a rate of 18% on most goods and services. However, there are a number of goods and services that are exempt from sales tax, such as basic necessities and exports.
One of the requirements of the Sales Tax Act, 1990, is that businesses that are registered for sales tax must file monthly sales tax returns. The returns must show the amount of sales tax that was collected from customers and the amount of sales tax that was remitted to the Federal Board of Revenue (FBR).
If a business fails to file its monthly sales tax return, it may be subject to a penalty. The penalty for non-filing of a monthly sales tax return is Rs. 2,00 for each day of default from the due date subject to a minimum penalty of Rs. 10,000.
The FBR may also take other enforcement action against businesses that fail to file their monthly sales tax returns. This may include:
- Discontinuation of electricity and gas connections
- Seizure of goods
- Imposition of additional taxes and penalties
- Criminal prosecution
Businesses that are registered for sales tax should make sure to file their monthly sales tax returns on time. By doing so, they can avoid the penalties and other enforcement action that may be taken by the FBR.
How to Avoid the Penalty for Non-Filing of Monthly Sales Tax Return
There are a number of things that businesses can do to avoid the penalty for non-filing of monthly sales tax return. These include:
- Filing the return on time.
- Setting up a reminder system to ensure that the return is filed on time.
- Using an electronic filing system.
- Hiring a professional to file the return.
By taking these steps, businesses can avoid the penalty for non-filing of monthly sales tax return and protect themselves from other enforcement action by the FBR.