In a major move to check fake sales tax registrations of manufacturers, the Federal Board of Revenue (FBR) has ordered physical verifications of all manufacturers registered from July 1, 2021, onwards.

In this connection, the FBR has issued instructions to all field formations on the sales tax registration in the category of manufacturers and physical verification of the business premises.

The field formations have started physical verification exercise of business premises of all “manufacturers”, registered from July 1, 2021, across the country.

The FBR has simplified the registration process through the introduction of the online process. The registration process after electronic means has significantly reduced the time registration time to a maximum of one week. Earlier the registration process particularly the manufacturing category was taking a lot of time, which was a major hurdle in a business startup.

The FBR has linked up Nadra biometric system and digitised the whole process to remove the bottleneck in the registration process. This is considered one of the major achievements of the FBR. The physical survey was kept in the second phase subsequent to registration to facilitate the business.

According to the FBR’s instructions, under Rule 5 and 7 of the Sales Tax Rules, 2006, for applicants seeking online registration for sales tax as “Manufacturer”, post verification of business premises is mandatory to be conducted by respective field offices. Reportedly, the applicants are being registered as “manufacturers” online through an automated module that needs post-physical verification of business premises by the field formations.

“In case of a manufacturer, the Board may require post-verification through field offices or a third party authorized by the Board”, rule 5 of the Sales Tax Rules said.

It is, therefore, requested that the taxpayers who got registered as “manufacturer” from July 1, 2021, may be physically verified, if already not, and reported to the Board by March 31, 2022, the FBR added.

The story was originally published in Business Recorder on March 20, 2022.