- Registered persons under the Sales Tax Act of 1990 can now deduct input tax from output tax for supplies made during a tax period
- This change is aimed at simplifying the calculation of tax liabilities for registered taxpayers
- The Federal Board of Revenue has updated the Sales Tax Act to include these provisions under Section 7
- Section 7 allows deductions of input tax paid during a tax period from the output tax, excluding certain taxes and allowing for specific adjustments
- Deductions not claimed within the relevant period can be claimed in any of the next six tax periods, providing flexibility in tax management
- Deductions are only allowed if the taxpayer has the appropriate documentation such as tax invoices, bills for utilities, or bills of entry for imported goods
- The Federal Government and FBR can impose conditions or restrictions on input tax deductions to ensure proper tax management
- Restrictions can also be placed on the wastage of materials for which input tax has been claimed to prevent misuse and maintain accountability
- Proper documentation and adherence to regulations are emphasized to ensure transparency and compliance in the taxation system
Source: pkrevenue.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
