KARACHI, Jan 6: The Karachi Chamber of Commerce and Industry (KCCI) has urged the CBR to withdraw section 73 of the Sales Tax Act regarding condition of admissibility of input tax subject to payment against credit sales within 120 days.

In a statement issued on Monday, the president, KCCI, Shaukat Iqbal said that section 73 is not only harsh but also creating difficulties for the business community.

He explained, “the condition imposed vide this section for admissibility of input tax subject to payment against credit sales within 120 days is irrational, illogical and against any cannon of justice or international concept of free trade and free economy.”

The KCCI chief said that the section is against the constitutional right of the parties i.e. the buyer and the seller to agree upon any time limit for such payments which they are also not bound under contract or sale of Goods Act. Therefore, this condition should be removed as it never stands as justified in the court of law.

He lamented that the condition had been further complicated and created confusion, particularly for exporters due to subsequent issuance of a series of Sales Tax General Orders, circulars, clarifications, rulings, instructions, etc. He said that in the meantime, till the Section 73 is withdrawn, the period for the admissibility of input tax be extended from 120 days to 180 days as allowed by the State Bank of Pakistan for importers and exporters.

The chamber president also advised the KCCI’s Sales Tax and Refund Sub-Committee and the members of the task force of the chamber to study indepth the provisions of Section 73 and formulate its recommendations on its irritant provisions.