ISLAMABAD: The Federal Board of Revenue (FBR) has decided to publicly disclose the names and sales tax registration numbers of persons involved in issuing fictitious sales tax invoices or fake/flying invoices.

The FBR’s instructions issued to the field formations said that, to curb the menace of fake and flying invoices, a new penalty clause (29) has been inserted. It provides that where it is established, after issuance of notice and adjudication, that a registered person has issued a tax invoice for a simulated or fictitious transaction, or for which no actual supply of goods or services has taken place, in addition to imposition of a penalty equal to the value of the simulated or fictitious invoice(s), including sales tax, the name and registration number of the person issuing such fictitious invoice or invoices shall be placed on a publicly accessible “Simulated Invoice Issuers Register” by the Board.

The registered persons claiming input tax on invoices issued by a person listed on the Simulated Invoice Issuers Register shall face automatic reversal of the input tax credit claimed against invoices issued by the said listed person from the date of listing.

The said input tax credit shall be reversed automatically and treated as inadmissible input tax, the FBR said. Removal from the register has been made contingent upon full payment of the penalty and default surcharge, as well as satisfactory demonstration of compliance. To promote correct and true declarations throughout the supply chain, a new clause (30) has also been inserted.

It provides that where it is confirmed, after issuance of notice and provision of an opportunity of being heard, that input tax credit claimed by a registered person in respect of any tax period cannot be matched with corresponding output tax declared by the supplier for the same or proximate tax period, as identified by the Board’s computerised system, such person shall be liable to pay a penalty of 20 percent of the unmatched input tax amount, in addition to reversal of the inadmissible credit and payment of default surcharge under Section 34. Newly inserted clause (31) in Section 33 penalises a registered person who fails to reverse input tax on invoices issued by a person listed on the Simulated Invoice Issuers Register as inadmissible input tax within 60 days of the listing of the invoice issuer. —SOHAIL SARFRAZ