CNIC condition to come into effect from August

Shoppers buying goods of more than Rs50,000 will have to provide CNIC number

Usman Hanif July 31, 2019

KARACHI: Shoppers across the country will have to provide their computerised national identity card (CNIC) number for purchases exceeding Rs50,000 from Thursday (August 1), according to a recent announcement.

In the case of foreign buyers, they would have to provide their passport number, said Inland Revenue Chief Commissioner Badruddin Ahmad Qureshi.

Won't go back on CNIC condition: FBR chairman

This condition has been introduced for business-to-business transactions in order to avoid unverifiable, fake and fictitious deals. However, it also includes general transactions having value exceeding Rs50,000, according to the Federal Board of Revenue’s (FBR) sales tax circular dated July 22, 2019. This is necessary as the export-oriented sectors, which were zero-rated earlier, will now have to claim tax refund. For the purpose, the exporters will keep record of the quantity exported and the quantity sold in the country.

The textile sector, in the name of exports, makes sales of about Rs1,200 billion in Pakistan against which sales tax collection is only Rs6 billion, said FBR Chairman Shabbar Zaidi in a media talk.

In a bid to collect more taxes, the government has introduced the CNIC condition. Therefore, if shoppers purchase goods of more than Rs50,000 from a sales tax-registered person, they will have to provide their CNIC number.

At present, there are only 41,484 sales tax-registered persons in the country, who are actually paying taxes with tax returns. Owing to cultural constraints, if the purchase is made by a female, the CNIC of her husband or father will be considered valid in order to implement this provision, stated the FBR notification.

CNIC registration camps set up for persons with disabilities

As opposed to the seller, the buyer is not required to be registered under the sales tax law, which is why sales to unregistered persons can be made. Similarly, according to the FBR, small and medium-sized retailers fall outside the sales tax net. Therefore, they will not be bound to collect CNIC numbers. If the purchaser provides wrong CNIC number, the seller will not be liable to penalty if he makes the sale in good faith, said the FBR notice.

However, if any ill will is found on account of the seller, action under this provision will be taken with the approval of chief commissioner of the jurisdiction.

Published in The Express Tribune, July 31st, 2019.

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