CNIC Is Now Required For Purchases Above Rs. 50,000
The Government took this step to relax the condition of seeking CNIC on purchases in the Finance Bill 2019. Looking to document the transaction of goods between the retailer and the end customer, the Government introduced this policy to make sure they know the buying capacity of people and to know what sort of high-end and pricey products are owned by whom. The legislature also provided protection to retailers in case the CNIC number attached to the purchase by the end customer was fake, by inserting an explanation in relevant law.
The retailers will also get to keep the CNIC numbers of the buyers and this legislation will be applicable from 1st August, 2019. The main purpose of this legislation was to record business-to-business transactions. This will help keep track of the limited purchases made by consumers of a value higher than Rs.50,000 and that too from sales tax registered persons. As a result, sales tax losses will be avoided and unverifiable business buyers.
FBR gave the clarification that to issue a tax circular to explain the amendments made in the Sales Tax Act. Right now, about 41,484 people approximately are registered Sales Tax Persons paying some form of sales tax. Through this legislation, more people can be registered with the government. The process of purchase includes a clause that claims that if the buyer is a registered sales tax payer, the CNIC will be asked in limited circumstances however, sales to unregistered persons can be made.
Small level retailers do not come under the category of sales tax registered retailers, hence the CNIC act is not supposed to be applicable in those purchases made by them, however, the purchases made by large scale retailers that come under the list of sales tax registered retailers, the CNIC is required.
Any action against the sellers can not be taken by the FBR until and unless they require the permission of the chief commissioner of jurisdiction. For transaction abide Rs.5 million the action will take place on if the director general or the member of operation approves it.