SRO 350(I)/2024 and Section 8B of Sales Tax Act - Latest Update

Lahore High Court Orders Unblocking of Blocked Tax Returns

A significant victory for Pakistani taxpayers

The Lahore High Court has issued a landmark ruling that will provide much-needed relief to businesses and individuals struggling with blocked tax returns. The court has ordered the immediate unblocking of tax returns that were previously held due to the stringent provisions of SRO 350.

SRO 350 introduced a system linking taxpayer returns to their suppliers' tax compliance status, aiming to curb fake invoicing. However, this mechanism inadvertently caused widespread disruption as many taxpayers found their returns blocked due to their suppliers' non-compliance.

The Lahore High Court's intervention is expected to have a positive impact on the overall tax filing process. It is a step towards easing the burden on taxpayers and promoting a more efficient tax system.

While this is a positive development, it's important to monitor the FBR's implementation of the court's order and any subsequent changes to the tax filing process .

SRO 350(I)/2024: A Balancing Act Between Compliance and Burden

Introduced in March 2024, SRO 350(I)/2024 aimed to curb the issuance of fake invoices ("flying invoices"). While the FPCCI acknowledges the importance of tackling tax evasion, they argue that the SRO's measures create excessive hurdles for legitimate businesses.

FBR Offers Relief for Taxpayers Facing Biometric Verification Challenges

The Federal Board of Revenue (FBR) has announced a relief measure for taxpayers who are unable to complete biometric verification due to various reasons, such as being non-residents or facing physical limitations.

Key Points:

• Online Exemption Request: Taxpayers who cannot undergo biometric verification can now submit an online application through the IRIS portal.
• Required Documentation: Along with the application, taxpayers need to provide relevant supporting documents, such as passports for non-residents or medical certificates for senior citizens.
• RTO Approval: The Regional Tax Office (RTO) will review the submitted documents and grant an exemption from biometric verification if the reasons are valid.

This move by the FBR aims to facilitate tax compliance for individuals who may face challenges in completing the biometric verification process. By providing an online option, the FBR is streamlining the process and making it more convenient for taxpayers.

This article was published at Pakistan Businesses Call for Withdrawal of SRO 350