ISLAMABAD, June 24: The Central Board of Revenue (CBR) has notified procedure for payment of sales tax against advance receipts.

According to the procedure notified through a sales tax General Order 1, a registered person shall charge sales tax against any advance payment received and the same will be included in the output tax to be declared in the sales tax return of the tax period in which such payment is received by him.

A registered person at the time of receipt of advance payment may issue a serially numbered advance payment receipt. Sales tax invoice required to be issued against such advances may be issued at the time of actual delivery of goods.

No tax shall be payable at the time of issuance of tax invoice in pursuance of advance payment receipt issued by the registered person on which tax has already been paid at the time of receipt of advances. However, the registered person will mention the advance payment receipt number and date in such invoice for the purpose of cross-referencing.

The procedure provides that in cases where a registered person has deposited the tax at the time of receipt of advance and such supply or part thereof is cancelled or its value is changed, consequent to which the tax charged and deposited on advances needs to be adjusted or the sales tax return needs to be modified, the registered person may issue a credit note and make corresponding adjustment against output tax in the monthly sales tax return.

It further provides that in cases where a registered person deposited tax on advances then the time limit for the issuance of debit or credit note, as prescribed in rule 22 of the Sales Tax Rules, 2006, shall not be a pplicable.