Calculation of GST, levy: the FBR clarifies the rebate on the standardized tax invoice

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ISLAMABAD: The Federal Revenue Board (FBR) on Friday clarified that sales tax will be calculated and charged on the actual value received after discount on sales of goods by integrated retailers/suppliers.

In this regard, the FBR has issued a new clarification on the issue of the discount on the standardized tax invoice, as provided for by SRO 1006 (1)/2021.

This sales tax will be calculated as provided in terms of the definition of supply value provided under section 2(46) of the Sales Tax Act 1990.

According to the details, the FBR had previously issued a clarification dated October 13, 2021 on the same subject, namely the standardized format of the sales tax invoice notified under SRO 1006(1)/2021 of 09-08-2021.

The FBR contends that a number of miscellaneous representations from ratepayers and bar counsel were again received by the Board requesting further clarification on the “commercial rebate”.

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The FBR stated that the “value of the supply” within the meaning of section 2(46) of the Sales Tax Act 1990 in relation to the taxable supply means the consideration in money received by the retailer from the consumer against the supply, but excluding the amount of the tax.

The FBR stated that cash discounting is permitted and permitted in the form of price reduction in seasonal sales/sales in accordance with trade practice.

The FBR has now clarified that the value of the supply for sales tax purposes is the actual value received in monetary terms excluding the amount of sales tax and not the gross value, therefore sales tax will be calculated and invoiced at the actual or reduced price. Therefore.

According to SRO 1006(I)/2021, the name must be registered when the customer owes the tax or credit or the invoice value is more than Rs 100,000.

Under Rule 150ZEB of the Sales Tax Rules 2006, registrants (integrated providers) must install the tax electronic device and software, as approved by the Board, available on its website with technical instructions complete for installation, configuration and integration.

Copyright Business Recorder, 2022

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