FBR Reduces Sales Tax Condonation Limit to Two Years

The Federal Board of Revenue (FBR) has introduced a revised policy directive curtailing the permissible period for condonation of time limits in sales tax matters from three years to two years. Pursuant to this amendment, the Commissioner Inland Revenue (IR) is now authorised to grant condonation of delays to registered persons for a maximum period of two years, replacing the erstwhile three-year threshold.

The updated framework empowers the Commissioner-IR to entertain and decide applications for condonation in sales tax-related compliances, subject to the condition that such requests are lodged within the stipulated two-year window. This change has been effected through appropriate modifications to the extant guidelines under the Sales Tax Act, 1990, read with the earlier notification SRO 1444(I)/2024.

Under the revised procedure, registered taxpayers—or persons duly authorised on their behalf—are required to file a formal application before the concerned Commissioner-IR, accompanied by a detailed explanation justifying the delay in submission of sales tax returns or fulfilment of other statutory obligations within the prescribed timelines. Where no supplementary documentation is called for, the Commissioner-IR is obliged to adjudicate the application within thirty days of receipt.

In instances requiring additional information or records, the Commissioner-IR shall dispose of the matter within forty-five days from the date of submission of the complete requisite documents. In all cases, the Commissioner is directed to record and communicate explicit, reasoned grounds for either granting or refusing the condonation sought.

This policy adjustment forms an integral part of the FBR’s ongoing reform agenda to enhance the efficiency of sales tax administration, expedite compliance resolution, and minimise protracted delays in return filing and related proceedings.