New System Developed To Deduct Sales Tax Automatically

New system developed to deduct sales tax automatically

ISLAMABAD, (Pakistan Point News - 20th july,2016) : Controller General of Accounts (CGA) with the assistance of Federal Board of Revenue (FBR) has developed a software which is now being used for automated verification of Sales Tax Registration Number (STRN) and deduction of applicable rates of sales tax from the vendors' claims submitted at accounting offices. The system has been implemented across all accounting offices from July 01, 2016, said a statement here on Wednesday.

The successful implementation of the project will ensure correct deduction of sales tax. Under the system, from July 01, 2016 onward the deduction of applicable rates i.e. 10%, 20% and 100% of the sales tax would be made through this automated system. The system of the all the AGs would be linked up with FBR's database in order to verify the status of the vendor's STRN and authenticity of the Sales Tax Registration Number (STRN).

As a result of this verification of status and authenticity of STRN, the system will automatically deduct sales tax as per applicable rates. The system was developed following a pilot project which was launched by CGA at AG Office Islamabad under the supervision of DG (MIS) FABS on 1st May 2016. In this pilot project, number of issues arose and solutions were provided to DG (MIS) by FBR for successful implementation of the software.

After resolution of the teething problems of the project, both the partners i.e., FBR and CGA decided to extend this project across the country from 1st July 2016. CGA office has a prime role in the implementation of the project and this role will increase with each passing day. It has been decided by FBR and CGA that the prerequisite of the countrywide success of the of the project is to sensitize all the government departments to become aware of the new system in due course of time to keep it smooth and efficient. It may be added that full applicable rate of sales tax shall be deducted from those vendors whose STRN does not get validated from FBR's database. Under the system, the government departments and ministries would be required to deal with only those vendors who possess a genuine STRN.