Complete Guide on New Sales Tax Annexure-C1 Compliance in Pakistan
As part of the ongoing efforts to strengthen documentation and tax compliance, the Federal Board of Revenue (FBR) has introduced a new Annexure-C1 in the monthly Sales Tax Return. This annexure is specifically aimed at documenting payments received through the banking channel, in compliance with Section 73 of the Sales Tax Act, 1990.
Despite its introduction, no official SRO or clarification has been issued by FBR to explain the practical implementation. To help registered persons navigate this new requirement, Dawars Associates brings you a simplified, bilingual blog with practical answers and solutions.
Who Must File Annexure-C1?
All Sales Tax Registered Persons are now required to file Annexure-C1 along with their monthly Sales Tax Return—irrespective of their size or threshold. There is no exemption.
Key Points to Understand (with Section Reference)
1. Cash vs. Credit Sales
Only payments received during the tax period are to be declared in Annexure-C1. Credit sales will be declared in Annexure-C when the invoice is issued—but C1 is only updated when the payment is received.
2. Advance Payment (Sec 2(44))
Under Section 2(44) of the Sales Tax Act, if payment is received before delivery, the time of supply is the payment date. Thus, an invoice should be issued and reported in both Annexure-C and Annexure-C1 for that period.
3. Partial Payments
Annexure-C1 currently lacks a clear format for partial payments. However, report what you receive, and update the remaining balance when it’s received in a future month.
4. Single Cheque – Multiple Invoices
If you receive a single cheque for multiple invoices, declare each invoice individually in Annexure-C1—with the same cheque number.
5. Credit/Debit Notes
These are not reported in C1. Adjustments are made separately in Annexure-I.
6. Discounts
Report the net payment received after discount—matching the value declared in Annexure-C.
7. Multiple HS Codes in One Invoice
Follow the same structure as in Annexure-C: each HS Code must be reported separately, even if under a single invoice number.
8. Error Correction
As Annexure-C1 is part of the Sales Tax Return, revise your return to correct any mistakes.
9. Sales to Unregistered Persons
If the buyer paid via banking channel, mention their CNIC or NTN. If the payment was received in cash, clarification from FBR is still awaited.
Dawars Associates: Simplifying Sales Tax Compliance
We help businesses stay ahead of new regulations. Whether you’re unsure about Annexure-C1, facing portal issues, or need monthly filing support—our tax team is ready to assist you.
📅 Act Now – Stay Compliant!
✉️ Email: info@dawarsassociates.com
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9-May-2025
