Input tax adjustment on ads: ST invoices specifications conveyed to PTV
ISLAMABAD- The Central Board of Revenue (CBR) has conveyed the specifications of sales tax invoices to the Pakistan Television Corporation (PTV) for claiming input tax adjustment on advertisement services.
The CBR has also pointed out to all the collect orates that invoices issued by PTV bearing the name and registration number of the registered person/buyer and routed through the advertising agency would be acceptable to the department. In this regard, the CBR has issued a sales tax ruling 12/2003 here on May 21, 2003.
It was not clear that the invoices being issued are in conformity with CBR Ruling 67/2002 for the purpose of claiming input tax adjustment.
Under ruling 67/2002, the registered persons could claim input tax adjustment on services of advertisement under the Sales Tax Act, 1990. This is subject to the condition that the sales tax invoices should be issued by the registered person (service provider) directly in the name of sales tax registered person (buyer) who procured services only for exclusive use in making supplies of taxable goods or rendering of services.
The matter has been examined in the Board in consultation with PIV. The Board Was of the view that invoices issued by PIV bearing the name and registration number of the registered person/buyer routed through the advertising agency is in accordance with the said ruling.
These invoices are therefore acceptable for input tax adjustment. This would however be subject to the condition that payment is directly made by the registered person/buyer to the registered person/service provider as per provisions of section 73 of the Sales Tax Act, 1990, CBR maintained.
Moreover, while claiming input tax adjustment the provisions of Apportionment Rules issued vide Notification No. SRO 698(1)/96 of August 22 1996 may be kept in view and no input tax adjustment for items mentioned in SRO 578(I)/98 would be admissible.
Source: Business Recorder