Ask for tax registration if someone charges you with sales tax – Authorities

  • The sales tax can only be recovered from the customer if the supplier reflects the Sales Tax Registration Number on the invoice/receipt.
  • Customers are advised to ask for invoices/receipts having a Sales Tax Number (STRN) on the purchase of goods.
  • In other cases, the supplier is not allowed to recover sales tax from the customers, FBR clarified.
Customers are directed to Seek Receipts from Supplier with STRN on Purchases
Customers are directed to Seek Receipts from Supplier with STRN on Purchases

The Federal Board of Revenue (FBR) has warned buyers to ask for a registration number if the seller charges sales tax on purchases.

In a notice issued by the Federal Board of Revenue, it has been clarified that sales tax can only be recovered from the customer if the supplier is registered for sales tax purposes and reflects the Sales Tax Registration Number (STRN) on the receipt issued to the customer.

Customers should be aware:

The FBR has advised the Customers to ask for invoices/receipts having STRN on the invoices/receipts on the purchase of goods and services.

However, in other cases, the supplier is not entitled to recover sales tax from the customers. Customers should be aware of the same.

Also Check: FBR Plans To Bring Small Traders Into The Tax Net – 3 Schemes Proposed

FBR observed that suppliers of goods and services are charging Sales Tax on invoices/receipts without identifying their Sales Tax Registration Number on the ‘Invoices/Receipts’ issued to the customers.

The board has issued its circular due to the reason that many suppliers are charging Sales Tax from customers without getting them registered under the Sales Tax regime.

It clarified that such practice is against the law and leads to an increase in prices and undue enrichment of sellers without any deposit of tax with the government.

Customers are suggested to seek invoices or receipts from suppliers with STRN on the invoices/receipts issued if Sales Tax is charged on their purchases.

Furthermore, a buyer is not required to provide his NIC in case of purchases from a person not registered for sales tax.

FBR clarified that in case of purchase of third schedule items, which are subject to sales tax on the basis of the retail price and on which retail price along with sales tax is legibly printed, the sales tax on the same is deposited by the manufacturer or importer.

Sales Tax Registration Number (STRN) may not be required In case of such items if the same is purchased from a retailer.

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