A.   Background (BG)

This refers to the related Important TLQCs in trail, blue, italic and double line  (a) 3032 of -----.25 about Royalty, Franchise, Other Reverse charge input allowed – --HC ---- order (b) 2906 of -------.24 about 6M Input Adjustment limit will extend, if RP win – --HC ----order & KCV

B.   Updated Commentary

Further to KQU 3281 of -----, being an important matter, we would inform you about FBR letter No ---------------------------- of ------.3.25 (received later on from reliable resources) about ------------------(Attachment 3065.1)  in the ensuing paragraph, in Italic with emphasis in bold & Underline for quick reading.

2.   The directed to refer to the Honorable SHC interim order dated -----.25 (TLQC 3032 of -------.25 in trail refers) also cover in BG whereby it was stated that the adjustment of sales on services rendered by non-residents was carried out in return on online system of FBR but the Honorable court has observed that at present the adjustment "appears to be unjustifiably denying such claims". Hearing has been adjourned till ------ apparently to bring the online system in line with law.

3.   The matter is of allowing such input tax in return. The relevant tax authorities can interpret its admissibility or otherwise under the provisions of Sales Tax Act, 1990 as well as the Judgment of the Honorable Apex Court to determine the vires of such levy by a Provincial Legislature.

4.   In the meantime, it is, therefore, requested that PRAL may remove the check to allow input tax adjustment in the sales tax return to the petitioners (linked as Annex-A) paid on behalf of the non-resident if such tax payment is electronically verified by the system.

C.   Further Details & Services 

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Advisory, Statement or Return Filing or Review services, or related accounting matters like the above, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com. Your Goodself may continue to get other services from your current Tax & Legal Advisors.

Best regards for Here & Hereafter
Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner 

Kasbati & Co (1400+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc

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