Circular No. 02 of 2023-24, Islamabad, the 21st July, 2023

SROS: Circular No. 02 of 2023-24, Islamabad, the 21st July, 2023 Sales Tax, Federal Excise and ICT (Tax on Services) Government of Pakistan Revenue Division Federal Board of Revenue **** C.No. 3(1)ST-L P/2015 (Vol-III) Islamabad, the 21st July, 2023 Circular No. 02 of 2023-24 Sales Tax, Federal Excise and ICT (Tax on Services) Subject: Explanation of Important Amendments in Sales Tax Act 1990, ICT (Tax on Services) Ordinance, 2001 and Federal Excise Act, 2005 Through the Finance Act, 2023 The Finance Act, 2023 has brought about certain amendments in Sales Tax Act, 1990 (hereinafter referred to as “STA”), Federal Excise Act, 2005 (hereinafter referred to as “FEA”) and Islamabad Capital Territory (Tax on Services) Ordinance, 2001 (hereinafter referred as TCTO”). Significant amendments are explained hereunder. Changes are effective from 1st day of July, 2023. 1. Revamping of Alternative Dispute Resolution Mechanism. In order to facilitate the registered persons and to reduce litigation as well as cost of litigation, common amendments have been made in STA and FEA by revamping alternative dispute resolution mechanism through the Finance Act, 2023. Major highlights and departure points from previous regime are highlighted as under: a. The flexible nature of initial proposition by the registered person for resolution of the dispute including an offer of tax payment has been introduced which previously was fixed in nature, once offered, and un-retractable by the registered person; b. The Board will appoint the committee within 15 days of receipt of application for dispute resolution instead of previous 45 days; c. The third member of the dispute resolution committee which previously was appointed through consensus between the Chief Commissioner and registered person nominated member from the panel has been replaced with a retired judge not below the rank of judge of a High Court, who will also be the Chairperson of the dispute resolution committee, to be nominated by the Board from a panel notified by the Law and Justice Division; d. Previously, both registered person and Commissioner were required to withdraw pending appeals before appellate fora in respect of the…