The Federal Board of Revenue (FBR) has issued a new policy directive that shortens the time frame for granting condonation in sales tax matters from three years to two years. Under this revised measure, the Commissioner Inland Revenue (IR) may now condone time limits for registered taxpayers up to two years, instead of the previous three-year period.
The new rule empowers the Commissioner-IR to approve condonation requests for sales tax-related matters, provided the application is made within the two-year limit. The FBR has modified its earlier guidelines under the Sales Tax Act, 1990, and notification No. SRO 1444(1)/2024, as part of this shift.
According to the notification, registered taxpayers, or those authorised by them, are required to submit an application to the Commissioner-IR explaining the reasons for the delay in filing their sales tax returns or completing required actions within the designated time frame. If no further documentation is needed, the Commissioner-IR is mandated to decide on the application within 30 days.
In cases where additional information is required, the Commissioner-IR has up to 45 days from receiving the necessary documents to make a decision on the case. The Commissioner is also instructed to provide clear reasons for either approving or rejecting the condonation request.
This move by the FBR is part of its broader strategy to streamline sales tax compliance and reduce delays in the filing process.