The Federal Board of Revenue (FBR) has mandated that all sales tax invoices for taxable supplies made to unregistered persons must include the National Tax Number (NTN) or Computerized National Identity Card (CNIC) of the buyer.
This requirement aims to enhance transparency, streamline tax compliance, and curb tax evasion.
The FBR emphasized that this mandate is governed by Section 23 of the Sales Tax Act, 1990, which outlines the essential details and format of tax invoices issued by registered persons.
Key Provisions Under Section 23
Tax solutions
- Mandatory Details on Tax Invoices
Registered persons making taxable supplies are required to issue serially numbered tax invoices at the time of supply. These invoices must include the following details in Urdu or English:
* Supplier Information:
Name, address, and registration number of the supplier.
* Recipient Information:
Name, address, and registration number of the recipient. For supplies made to unregistered distributors by manufacturers or importers, the invoice must include the recipient’s NTN or CNIC.
* Invoice Details:
o Date of issuance.
o Description, including count, denier, and construction in the case of textile yarn and fabric.
o Quantity of goods supplied.
o Value exclusive of tax.
o Amount of sales tax charged.
o Total value inclusive of tax.
- Provisions and Exemptions
* The requirement to include CNIC or NTN became effective on August 1, 2019.
* This condition does not apply if the payment is made via debit card, credit card, or other digital payment modes.
- Electronic Invoicing
The FBR has the authority to notify registered persons to issue electronic invoices, subject to conditions and restrictions. This move ensures a more regulated and transparent invoicing process.
- Limitations on Issuing Tax Invoices
Only registered persons or those paying retail tax are authorized to issue tax invoices. Additionally, no more than one tax invoice can be issued for a single taxable supply.
Objective of the Mandate
This requirement aligns with the FBR’s efforts to broaden the tax net and ensure better traceability of business transactions. By incorporating CNIC or NTN on invoices, the FBR aims to:
* Reduce tax evasion.
* Foster accountability among unregistered buyers.
* Encourage businesses to comply with tax regulations.
The FBR has also hinted at future technological advancements, such as digital authentication of invoices, to further enhance the effectiveness of this policy.
This regulation underscores the government’s commitment to strengthening Pakistan’s tax framework and improving revenue collection through robust and transparent mechanisms.
