Scope and Payment of Tax Chapter- 05
Under section 21(3) During the period of suspension of registration, the invoices issued by
such person shall not be entertained for the purposes of sales tax refund or input tax credit, and
once such person is blacklisted, the refund or input tax credit claimed against the invoices
issued by him, whether prior or after such blacklisting, shall be rejected through a self speaking
appealable order and after affording an opportunity of bearing heard.
If a registered person deals in taxable and non-taxable supplies, he can reclaim only such
proportion of the input tax as is attributable to taxable supplies.
No person other than a registered person shall make any deduction or reclaim input tax in
respect of taxable supplies to be made by him.
No input tax credit shall be allowed to the persons who paid fixed tax.
Notwithstanding anything contained in any other law for the time being in force or any provision
of this Act, Board, with the approval of the Federal Minister-in-charge, may, by notification in the
official Gazette, specify any goods or class of goods which a registered person cannot supply to
any person who is not registered under this Act.- Joint and several liability of registered persons in supply chain where tax unpaid (U/S 8A)
Where a registered person receiving a taxable supply from another registered person is in the
knowledge or has reasonable grounds to suspect that some or all of the tax payable in respect
of that supply or any previous or subsequent supply of the goods supplied would go unpaid of
which the burden to prove shall be on the department, such person as well as the person
making the taxable supply shall be jointly and severally liable for payment of such unpaid
amount of tax:
The Board may exempt any transaction or transactions from the provisions of this section.- Adjustable input tax (U/S 8B):
A registered person shall not be allowed to adjust input tax in excess of 90% of the output tax for
that tax period:
Tax charged on the acquisition of fixed assets shall be fully adjustable against the output tax in
the month of acquisition.
The Board may exclude any person or class of persons from this section.
A registered person may be allowed adjustment or refund of input tax on fulfilment of the
following conditions, in case:
(i) whose accounts are subject to audit under the Companies Ordinance, 1984, upon
furnishing a statement along with annual audited accounts, duly certified by the auditors,
showing value additions less than the limit prescribed above; or
(ii) other registered persons, as notified by the Board.
The adjustment or refund of input tax if any to a registered person shall be made on yearly basis
in the second month following the end of the financial year.
The Board may notify any other limit of input tax adjustment for any person or class of persons.
Notwithstanding anything contained in sub-sections (l), (2) and (3), input tax allowed in
case of locally manufactured electric vehicles subject to reduced rate of tax under the
Eighth Schedule shall be limited to the extent of amount of output tax and no refund or
carry forward of excess input tax shall be allowed.
Any auditor found guilty of misconduct in furnishing the certificate shall be referred to the Council
for disciplinary action.
In case a Tier-1 retailer does not integrate his retail outlet in the manner as prescribed under
sub-section (9A) of section 3, during a tax period or part thereof, the adjustable input tax for
whole of that tax period shall be reduced by 60 %.
Non applicability of section 8B [SRO 1190 (I)/20 19 , dated 02 - 10 - 2019 ]:
a) Provision of section 8B (1) shall not apply to the following specified persons: