April 21, 2025 (MLN): The inaccurate classification of taxpayers as “non-active” by the Inland Income Service (IRS), regardless of the Federal Board of Income’s (FBR) official extension of gross sales tax return submitting deadlines for February and March 2025, has raised severe concern.

This subject has been strongly taken up by President of the Karachi Chamber of Commerce & Trade (KCCI), Muhammad Jawed Bilwani.

“It is deeply troubling that numerous taxpayers are being unfairly labeled as inactive solely due to delays in filing returns for two consecutive periods, even though official extensions were granted,” acknowledged President KCCI Muhammad Jawed Bilwani.

“This is causing unnecessary difficulties for honest taxpayers who are already trying to comply with the ever-changing regulatory environment.”

President Bilwani underscored that the gross sales tax return submitting system is beneath immense pressure, largely as a result of a sequence of current and abrupt modifications, in line with the press launch issued in the present day.

“The FBR’s decision to extend the deadlines clearly reflects that the system is struggling to cope. Yet, instead of facilitating the taxpayers, they are being penalized, which is counterproductive,” he emphasised.

Commenting on the technical difficulties confronted by taxpayers, President Bilwani famous that over the previous few months, the FBR has launched a number of obligatory necessities.

These embrace eight-digit Harmonized System (H.S.) codes, exact models of measurement, and new annexures like ‘H-1’, ‘J’, and ‘C-1’ in gross sales tax returns.

He elaborated that whereas imported gadgets will be simply linked with H.S. codes from Items Declarations, producers of native items are dealing with main challenges.

“Many local producers are simply unaware of the correct H.S. codes for their products. The same item being assigned different codes by different suppliers is creating unnecessary confusion and inconsistency,” he stated.

President Bilwani urged the FBR to rethink this method.

“As an alternative of putting the burden of figuring out particular H.S. codes on taxpayers, the system ought to permit taxpayers to explain the merchandise after which mechanically assign the suitable H.S. code.”

This would scale back confusion and enhance standardization, he recommended.

Highlighting one other technical limitation, President Bilwani criticized the restriction of unit measurements to kilograms (Okay.G.) solely.

“This is highly impractical. A dropdown menu should offer all standard units of measurement. If needed, the tax department can always request clarification at a later stage instead of enforcing rigid input criteria,” he proposed.

Addressing the sudden implementation of latest annexures, he cautioned, “Annex ‘J’ regarding manufacturing knowledge and Annex ‘H-1’ associated to inventory reporting by non-manufacturers shouldn’t be enforced abruptly.

“These ought to be phased in with correct academic assist by means of seminars and workshops, quite than being thrust upon taxpayers mid-year,” he added.

President Bilwani additionally highlighted the inconsistency between the authorized standing of submitting extensions and the present habits of the IRS system.

“It’s legally inappropriate to declare a taxpayer inactive for failing to file returns throughout months for which official extensions have already been granted,” he added.

“This mismatch between coverage and system enforcement is deeply unfair and have to be rectified instantly,” he asserted.

He concluded by urging the FBR to undertake a extra pragmatic, technology-driven, and taxpayer-friendly method.

“The present system creates undue hardship for compliant companies.”

“It’s important that reforms are launched with correct planning, session, and assist mechanisms to make sure equity and ease of doing enterprise,” stated President Muhammad Jawed Bilwani.

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Posted on: 2025-04-21T21:13:06+05:00