Sales Tax Registration in Lahore
Sales tax registration in Lahore for any business is one of the primary steps in doing business as the Federal Board of Revenue monitors every transaction. Being a registered person, you can import & export goods or services rendered and work with any well-reputed company or Government organization in Pakistan. You cannot participate in tenders if you have not registered for sales tax. However, there are specific criteria for particulars who wish for sales tax registration. Moreover, some particulars must register themselves.
Mandatory Sales Tax Registration For Particulars
Sales tax registration is legally applicable on the following particulars:
- All importers
- All wholesalers (including dealers) and distributors
- Manufacturers are not under the cottage industry. “Cottage industry” refers to a manufacturer whose annual revenue from taxable supplies made in any tax period during the previous 12 months ending in any tax period does not exceed [ten] million rupees or whose annual utility bills (electricity, gas, and telephone) do not exceed [eight] hundred thousand rupees;
- A business functioning as a branch of a large or small multinational retail chain
- A merchant operating outside of a mall, plaza, or shopping area in air conditioned shop
- A retailer whose cumulative electricity bill during the preceding twelve consecutive months exceeds Rupees six hundred thousand.
- Any wholesaler or retailer who deals in the bulk import and distribution of consumer goods. He may sell these goods to retailers and the general public on a wholesale and retail basis)
- A person must register for any duty tax collected or paid as if he has a sales tax levy. It directly comes under any Provincial or Federal Law. E.g., lodging establishments, nightclubs, caterers, and customs officers etc.
- A Person making zero-rated supplies, including commercial exporters, intend to obtain sales tax refunds against their zero-rated supplies.
All particulars above-mentioned shall register themselves. Before that, these particulars should have a basic know-how of sales tax registration.
Sales Tax Registration Basics
The first step before filing your Sales Tax Return is to register yourself with the Federal Board of Revenue (FBR). FBR registration provides you with a Sales Tax Registration Number (STRN) or User ID and password. These credentials allow access to the e-file portal, the online portal for filing Sales Tax Return. Only after logging into the e-file site, it is possible to submit an online sales tax return. This Automated System for Sales Tax Registration is in effect from July 1st, 2019. Hence, it allows the registration of a person for Sales Tax through the Iris Portal.
Procedure Of Registration
The person shall use their Iris Portal credentials to login into Iris Portal. Once logged in, the person shall select Form 14 (Form of Registration filed voluntarily through Simplified) from the Registration menu.
On selection of Form 14, the person will be asked to finish the following information:
- Tax Period
- In case of AOP or Company, this form may ask the CNIC of a Member or Director or anyPrincipal Officer. Moreover, this form may also need to know the mode of registration.
- Information about a bank account, such as the Bank Account Certificate which should show that the bank account is issued in the company’s name.
- Information about the company, including its name, its acquisition date, its capacity, and its business activity. Furthermore, if the company has several branches, then a user may need to provide information about each branch’s location.
- GPS-tagged photographs of the business’ location
- Registration or consumer number of the gas and electricity supplier along with pictures of utility meter
- In the case of a Manufacturer, he is bound to provide the GPS-tagged photographs of machinery and industrial electricity or gas meter installed.
The system shall register the person for Sales Tax upon submitting the above information and documents. After registration, a person should register his biometric details.
After registration, the person registered through Iris Portal must visit the e-Sahulat Center of NADRA within 30 days for biometric verification. Officials can remove the name of the registered person from the Sales Tax Active Taxpayer List in the event of failure to visit or failure of verification. There are several NADRA e-Sahulat Centers to facilitate the applicant for biometric verification.
Post Verification For Manufacturers
In the case of a Manufacturer, the Board may require post verification through field offices or a third party authorized by the Board. A Field officer can remove the registered person from the Sales Tax Active Taxpayer List if he discovers (during the registration process) that any of the documents provided are not genuine, false, or incorrect. In such a case, the field officer may make a request through the system for the missing document within fifteen days.
Sales Tax Registration Via IRIS Mobile Application
A person can also file Sales Tax Registration via Iris Mobile Application and Tax Asian Mobile Application. Detailed procedure for Sales Tax Registration via Iris Mobile Application is available on Tax Asian Mobile Application. He may also file an application to shift the ownership or to change already-fed information
Change In Particulars Of Registration
Suppose there is a change in the name, address, or other particulars as stated in the registration certificate. In that case, the registered person shall notify the change in the prescribed form to the RTO within fourteen days of such change.
Law officials may allow any change in the business category after the RTO has verified the manufacturing facility and confirmed the status as an industrial consumer of the electricity and gas distribution companies.
Transfer Of Registration
Suppose a registered person intends to shift his business activity from the jurisdiction of one RTO or LTU to another RTO or LTU, or he has any other valid reason for such transfer. In that case, he shall apply to the RTO to transfer his registration.
The RTO may be subjected to such conditions, limitations, or restrictions as it may deem fit to impose, by order, transfer the registration of a registered person from the jurisdiction of one RTO/LTU to another RTO/LTU, or as the case may be to the LTU or RTO.
The return for the tax period in which the registration is transferred shall be filed in the RTO/LTU from where the registration is transferred.
Revised Registration Certificate
In case of multiple registrations, the registered person shall apply to RTO/LTU for single registration of the RTO/LTU. It shall issue a revised registration after ascertaining tax liabilities from the relevant RTO/LTU certificate. After that, any relevant official will merge the previous registration number. Similarly, a person can also de-register himself.
To de-register, a person shall submit an application to Commissioner Inland Revenue having appropriate jurisdiction. Within ninety days from the date of such application or the date, all the dues outstanding against such a person are deposited by the person. It may also cause the person to be de-registered through the computerized system.
The following persons can be de-registered:
- Who ceases to carry on the business.
- Whose supplies become exempt from Sales Tax.
- A person whose turnover becomes less than the threshold level can apply for cancellation of the registration.