FBR allows input tax adjustment

ISLAMABAD: The Federal Board of Revenue (FBR) has allowed registered persons engaged in the supply of cooking oil and ghee products to avail higher input tax adjustment, subject to compliance with the digital invoicing and production monitoring requirements of the FBR.

The FBR has amended S.R.O. 1190(I)/2019 through an S.R.O. 1631(I)/2026.

The measure is part of the FBR’s broader framework for linking input-tax adjustment facilities with documentation and digital monitoring of business transactions.

Through the latest notification, the FBR has inserted a new Serial No. 4 in Table-2 of the 2019 notification. The newly added category covers registered persons compliant with the FBR’s digital invoicing and production monitoring system who are engaged in the supply of oil and ghee and are paying sales tax at retail price under Serial No. 56 of the Third Schedule to the Sales Tax Act, 1990.

The facility has been specified up to November 30, 2026, according to the notification.

S.R.O. 1190(I)/2019 was originally issued under the second proviso to sub-section (1) and sub-section (4) of Section 8B of the Sales Tax Act, 1990. The notification provides for exclusion of specified categories of registered persons from the general restriction on adjustment of input tax under Section 8B.

Under the Sales Tax Rules, the admissible input-tax credit for persons covered by Table-2 is calculated subject to the prescribed limit, which is higher than the standard 90 percent restriction applicable under Section 8B.

The latest amendment effectively extends the Table-2 treatment to compliant oil and ghee suppliers, provided they meet the conditions relating to digital invoicing, production monitoring and payment of sales tax at retail price.

The notification has been issued by the Revenue Division under the powers conferred by Section 8B of the Sales Tax Act, 1990.—SOHAIL SARFRAZ