NBR eases process to get VAT rebate for electricity bills paid through MFS

The National Board of Revenue (NBR) has issued a directive to make the rebate in Value-Added Tax (VAT) process easier against electricity bills paid through Mobile Financial Service (MFS).

The VAT authority, under the new process, will acknowledge the invoice, issued by MFS after payment of electricity bill, as a tax challan. As a result, businesses can get the rebate through that invoice. Earlier, they were not considered for rebate.

The directive, issued by the VAT Wing of NBR on September 20, came after changes were made in this regard in the finance act for the incumbent fiscal year.

Earlier, there was no opportunity to claim rebate in VAT as per the law against bills paid through MFS, though the system is well known to pay bill. At the same time, only a company could claim rebate while it paid the bills as per the invoice issued by the concerned power department.

The VAT wing did not consider the MFS invoice as an appropriate document for rebate while now it would be easier for the VAT payers to get rebates, a NBR official said.

However, the concerned commissioner and officials can examine the web portal, software and the other documents of the MFS provider. The assessment process could also reduce VAT evasion, the official said.