KARACHI: In a determined effort to combat money laundering through foreign trade, the government has unveiled strict measures, including up to 10 years imprisonment for offenders and the confiscation of implicated consignments. These proposed reforms are detailed in the Finance Bill 2019, aiming to amend the Customs Act, 1969.
(more…)Day: June 16, 2019
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Customs law amended to recover unpaid amount from exporters
KARACHI: The government has put a check on exporters related to unpaid amount of duty and taxes at the time of export clearance and amended law to recover the same.
Through Finance Bill 2019, it is proposed to amend Section 32(3)(A) of Customs Act, 1969 to apply this check on exporters.
Sub-section (3A) of Section 32 deals with the issuance of show cause notice in the situation where any duty, taxes or charge has not been levied, short-levied or erroneously refunded, discovered as a result of an audit or examination of an importer’s accounts or by any other means.
The Finance Bill 2019 seeks to extend the application of this section to exporters as well.
The existing law under Section 32(3)(A) said:
Notwithstanding anything contained in sub-section (3), where any duty, taxes or charge has not been levied or has been short-levied or has been erroneously refunded and this is discovered as a result of an audit or examination of an importer’s accounts or by any means other than an examination of the documents provided by the importer at the time the goods were imported, the person liable to pay any amount on that account shall be served with a notice within five years of the relevant date requiring him to show cause why he should not pay the amount specified in the notice:
Provided that if the recoverable amount in a case is less than one hundred rupees, the Customs authorities shall not initiate the aforesaid action.
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FBR empowered to impose fee, service charges under Customs laws
KARACHI: Federal Board of Revenue (FBR) has been empowered to impose service charges and date of determination of rate of import duty under Customs Act 1969.
The Finance Bill 2019 has proposed delegation of powers from federal government to the FBR, which included: levy of fee and service charges; date of determination of rate of import duty; date of determination of rate of duty for clearance through the Customs Computerized System; and date for determination of rate of duty on goods exported.
The bill proposed delegation powers to FBR under Section 18D, 30, 30A and 31 of Customs Act, 1969.
Presently Section 18D of Customs Act, 1969 states:
18D. Levy of fee and service charges.- The Federal Government may, by notification in the official Gazette, subject to such conditions, limitations or restrictions as it may deem fit to impose, levy fee and service charges for examination, scanning, inspections, sealing and desealing, valuation check or in respect of any other service or control mechanism provided by any formation under the control of the Board, including ventures of public-private partnership, at such rates as may be specified in the notification.
Presently Section 30 of Customs Act, 1969 states:
30. Date of determination of rate of import duty.- The rate of duty applicable to any imported goods shall be the rate of duty in force;
(a) in the case of goods cleared for home consumption under section 79, on the date on which a goods declaration is manifested under that section; and
(b) in the case of goods cleared from a warehouse under section 104, on the date on which a goods declaration for clearance of such goods is manifested under that section:
Provided that, where a goods declaration has been manifested in advance of the arrival of the conveyance by which the goods have been imported, the relevant date for the purposes of this section shall be the date on which the manifest of the conveyance is delivered at the port of first entry:
Provided further that, in respect of goods for the clearance of which a goods declaration for clearance has been manifested under section 104, and the duty is not paid within seven days of the goods declaration being manifested, the rate of duty applicable shall be the rate of duty on the date on which the duty is actually paid:
Provided further that in case of the goods illegally removed from the warehouse, the rate of duty shall be the rate prevalent either on the date of in-bonding or detection of case or date of payment of the duty and taxes, whichever is higher:
Provided further that in case of exercising option for redemption of fine in lieu of confiscation of the goods seized during anti-smuggling operations, the rate of duty shall be the rate prevalent either on the date of seizure or date of payment of duty and taxes, whichever is higher:
Provided further that the Federal Government may, by notification in the official Gazette, for any goods or class of goods, specify any other date for the determination of rate of duty.
Explanation:- For the purpose of this section “manifested” means that when a machine number is allocated to goods declaration and is registered in Customs record.
Presently Section 30A of Customs Act, 1969 states:
30A. Date of determination of rate of duty for clearance through the Customs Computerized System.- Subject to the provisions of section 155A, the rate of duty applicable to any imported or exported goods if cleared through the Customs Computerized System, shall be the rate of duty in force on;-
(a) the date of payment of duty;
(b) in case the goods are not chargeable to duty, the date on which the goods declaration is filed with Customs.
Provided that where a goods declaration has been filed in advance of the arrival of the conveyance by which the goods have been imported, the relevant date for the purposes of this section shall be the date on which the manifest of the conveyance is filed at the customs-station of first entry:
Provided further that the Federal Government may, by notification in the official Gazette, specify any other date for the determination of rate of duty in respect of any goods or class of goods.
Presently Section 31 of Customs Act, 1969 states:
31. Date for determination of rate of duty on goods exported.- The rate and amount of duty applicable to any goods exported shall be the rate and amount chargeable at the time of the delivery of the goods declaration under section 131:
Provided that where the export of any goods is permitted without a goods declaration or in anticipation of the delivery of such a declaration, the rate and amount of duty applicable shall be the rate and amount chargeable on the date on which loading of the goods on the outgoing conveyance commences:
Provided further that the Federal Government may, by notification in the official Gazette, for any goods or class of goods, specify any other date for determination of the rate of duty.
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Collectors’ power to determine customs values withdrawn
KARACHI: The government has withdrawn the power of Collector of Customs in determination of customs value on his own motion through Finance Bill 2019.
The Finance Bill 2019 proposed to withdraw the powers of the collector of customs to determine customs valuations on his motion under Section 25A(1) and Section 25A(3) of Customs Act, 1969.
The collector of customs presently has powers to determine the customs values under Section 25A.
The sub-section 1 of Section 25A states: Notwithstanding the provisions contained in section 25, the Collector of Customs on his own motion, or the Director of Customs Valuation on his own motion or on a reference made to him by any person or an officer of Customs, may determine the customs value of any goods or category of goods imported into or exported out of Pakistan, after following the methods laid down in section 25, whichever is applicable.
The sub-section 3 of Section 25A states: In case of any conflict in the customs value determined under sub-section (1), the Director-General of Customs Valuation shall determine the applicable customs value.
The powers of determining customs values have now been proposed to be available with Director of Customs Valuation.
Analysts said that this proposal in the Finance Bill 2019 would provide relief to import in clearance of consignments. They said that many arbitrary decisions of Collector have created hassles for the importers in the past and consignments were stuck up for a long time.
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Non-ATL persons to pay double amount of withholding tax on prize bond winning
ISLAMABAD: The government has increased withholding tax by 100 percent on winning of prize bonds for persons not on Active Taxpayers List (ATL).
Through Finance Bill 2019 the government has deleted the term ‘non-filers’ and imposed 100 percent withholding tax on persons not on the ATL, which contains names of persons file their returns by due date of a tax year.
The rate of withholding tax on prize bond, cross-word puzzle and prize on winnings remains unchanged, however, the categorized rates of non-filer are proposed to be abolished.
The amendment proposed through the Finance Bill 2019, the rate of withholding tax on winning of prize bonds and other lottery schemes shall be:
The rate of tax to be deducted under section 156 on a prize on prize bond or cross-word puzzle shall be 15 percent of the gross amount paid.
The rate of tax to be deducted under section 156 on winnings from a raffle, lottery, prize on winning a quiz, prize offered by a company for promotion of sale, shall be 20 percent of the gross amount paid.
For the person winning the prize but not on the ATL shall pay double the amount as withholding tax.