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Govt urged to simplify ST registration process

MUZAFFAR QURESHI

KARACHI: The complex and lengthy process for registration shows the tax payers away from the sales tax department, which accounts for the poor response to the Central Board of Revenue drive for registration, say tax consultants.

Khushnood A Khan, a leading sales tax consultant, says that as many as five documents are required for sales tax registration, compared with only three documents needed for registration with the income tax department. This negate the CBR's oft-repeated assertion that the sales tax is progressive and simple tax of the future.

The documents required by the sales tax department for registration are copies of national identity card (NIC), NTN certificate, partnership deed/memorandum of articles, property documents of the premises of the office/factory or/and the rent agreement and list of machinery in case of a manufacturer and his factory address. Compared with this, for income tax registration only three documents, namely, copy of NIC, bank certificate and rent agreement are required.

The unique condition for sales tax registration is that all documents submitted by the tax payers should be duly certified by a notary public otherwise these would not be accepted. This means that the department does not trust the tax payers who came voluntarily and want to come under the tax net, the tax consultant added.

" If unfortunately a tax payer is a manufacturer, it will take him months to get a registration certificate from the sales tax department, which, in other cases, normally takes 10 days. This is so because the registration will not be given unless the sales tax officer concerned physically inspects the manufacturing facility. This may lead to examination of the account registers of the manufacturers to ascertain whether they had paid tax correctly in the past or not.

The tax consultants have advised the Government to simplify the registration procedures if it really wants to expand the tax net.