FBR issued a general order to clarify the CNIC condition, but in fact, it created more confusion. The condition of CNIC was introduced in the finance act 2019, which requires the registered sellers to take CNIC of their buyers and then show it on the receipts.
In the event of a fake id, the seller is exempted from liability if the transaction is made in good faith.
Now FBR tried to clarify what is meant by good faith.
According to the general order 106/19, seller taking a buyer’s CNIC will be deemed as received in good faith if:
1. The tax invoice complies with the requirements of section 23(b) of the Sales Tax Act of 1990.
It requires to mention the name and address of the buyer on the receipt.
2. Payment made by the unregistered purchaser of the amount of the tax invoice is deposited into the supplier’s declared business bank account.
It doesn’t explain what if the transaction is cash-based. Should the seller then deposit the amount himself?
3. The CNIC provided by the purchaser is found authenticated by the NADRA.
It means the seller has to make sure at the time of the transaction that CNIC is valid and authenticate, which puts additional responsibility on the seller.
4. The NIC/NTN provided is not of the employee of the seller or of his partners.
Only this condition is valid. The seller shouldn't provide the CNIC by himself just to complete the transaction.
The general order also mentions that no action will be taken against the seller without the prior approval of the member IR-Operations of FBR.
The CNIC condition should have been implemented after some thought processes. Its a bone of contention between FBR and traders, and as it is a requirement by IMF, the government is unwilling to take it back.
Here is the link to the said general order.
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