Pkrevenue.com

Day: February 23, 2021

  • PTBA advises FBR stop interfering judicial function of Commissioner Appeals

    PTBA advises FBR stop interfering judicial function of Commissioner Appeals

    ISLAMABAD: Pakistan Tax Bar Association (PTBA) has urged the Federal Board of Revenue (FBR) to stop interference in judicial function of Commissioner Appeals.

    In a letter to FBR Chairman Muhammad Javed Ghani on Tuesday, the PTBA while referring to the instructions by the Legal Wing of the FBR to Commissioners Appeals, expressed serious concerns in interference in the judicial independence of the Appeal forum of the Commissioner Appeals and over the language of the letter which clearly indicates the direct influence in the judicial work/power of Commissioner Appeals.

    The Legal Wing of the FBR in its letter directed the commissioner appeals that they may exercise powers under tax laws however unnecessary annulment of orders with directions may be avoided.

    “Frequent annulled with directions orders will reflect adversely on the performance of the officers,” it added.

    The PTBA said that the letter is a clear demonstration of the overt and covert pressure that is exerted on commissioner appeals by the FBR and the field officers.

    “It is prima facie a travesty of justice in eyes of a taxpayer who is an aggrieved taxpayer is to seek relief from the departmental authorities which could be susceptible to overt and covert pressure from FBR.”

    This letter of February 15, 2021 issued by the FBR Legal Wing clearly established direct interference of the FBR in judicial function of Commissioner Appeals. “This is just not acceptable to PTBA and its membership.”

    An independent and fair appeal forum of the commissioner appeals is sine qua non for a taxpayer to have confidence in the tax administration.

    The Supreme Court of Pakistan had elaborated this principle in a leading case by holding that ‘separation of judiciary from executive is the cornerstone of independence of judiciary.’

    “If the taxpayer has confidence in a fair and just appeal forum of the FBR, he will come forward and be compliant taxpayer.

    “An independent appeal forum of commissioner appeals free from influence and inference of the FBR and FBR field units will also reduce unethical practices prevalent in the field units.”

    The PTBA demanded the FBR to withdraw the letter and re-assure all the commissioner appeals to adjudicate and decide appeals in a fair and just manner according to law and facts without any fear or influence from FBR or the FBR field units.

  • Stock market ends down by 161 points in narrow range trading

    Stock market ends down by 161 points in narrow range trading

    KARACHI: The stock market ended down by 161 points on Tuesday after trading in a narrow range activity during the day.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 45,729 points as against previous day’s closing of 45,890 points showing a decline of 161 points.

    Analysts at Arif Habib Limited said that the market traded in a narrow range between -227 points and +194 points, closing the session -161 points.

    E&P sector remained positive throughout the session on the back of an uptrend in international crude oil prices, however, the upside in E&P stocks remained in check.

    Banks, Cement, O&GMCs continued downtrend post announcement of half yearly / annual results. Technology stocks saw reversal after hitting session’s high and closed in red.

    HASCOL announced increase in authorized share capital that insinuated a capital raise and saw profit booking with an eventual closing below LDCP. Among scrips, WTL led the table with 84.2 million shares, followed by BYCO (70.2 million) and MDTL (55.4 million).

    Sectors contributing to the performance include E&P (+47 points), Fertilizer (+21 points), Textile (+21 points), Technology (-98 points) and Banks (-65 points).

    Volumes declined from 722 million shares to 718.2 million shares (-0.5 percent DoD). Average traded value also declined by 2 percent to reach US$ 159 million as against US$ 162.1 million.

    Stocks that contributed significantly to the volumes include WTL, BYCO, MDTL, TRG and DCL, which formed 38 percent of total volumes.

    Stocks that contributed positively to the index include ENGRO (+24 points), PPL (+23 points), OGDC (+16 points), ILP (+16 points) and HMB (+12 points). Stocks that contributed negatively include TRG (-90 points), HBL (-43 points), MEBL (-17 points), PSO (-14 points) and THALL (-13 points).

  • FBR allows income tax exemption on sugar import

    FBR allows income tax exemption on sugar import

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday allowed exemption from income tax on import of raw and refined sugar.

    The FBR issued SRO 235(I)/2021 in pursuance to the federal cabinet decision dated January 26, 2021.

    Through the SRO the FBR amended Second Schedule of the Income Tax Ordinance, 2001.

    According to the amendments, the tax under Section 148 on commercial import of the white sugar shall be collected at the rate of 0.25 percent from January 26, 2021 till June 30, 2021.

    Another clause added to the Second Schedule under which subject quota allotment by the commerce division, tax under section 148 shall be collected at the rate of 0.25 percent on import of raw sugar imported by sugar mills from January 26, 2021 to June 30, 2021 (both days inclusive) provided that such imports shall not exceed fifty thousand metric tons per sugar mill and three hundred thousand metric tons in aggregate by the sugar industry.

    The FBR said that a new clause 12K had been inserted to the Second Schedule under which the provisions of Section 148 and Section 153 shall not apply on import and subsequent supply of five hundred thousand metric tons of white sugar imported by the Trading Corporation of Pakistan.

  • SECP proposes making payment of cash dividends in three days

    SECP proposes making payment of cash dividends in three days

    ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Tuesday proposed to reduce time limit to three days for making payment of cash dividends.

    The SECP issued SRO 229(I)/2021 dated February 18, 2021 to introduce draft amendment in the Companies (Distribution of Dividends) Regulations, 2017.

    According to the draft an amendment has been proposed to Regulation 3 of the Companies (Distribution of Dividends) Regulations, 2017. Following amendment has been proposed as:

    “Period for making payment of dividends: Subjection to Section 243 of the Act, the chief executive officer of every company is responsible to make the payment of cash dividend, within a period of three working days from the date of its approval by the:

    (i) shareholders in general meeting, in case of final dividend; and

    (ii) board, in case of interim dividend.”

    At present the chief executive officer of every company is responsible to make the payment of cash dividend within a period of fifteen working days from the date of its declaration.

    The SECP invited comments from stakeholders on the draft amendment to be submitted within 14 days of the date of the SRO.

  • USC to announce special discount package for Ramazan

    USC to announce special discount package for Ramazan

    In an effort to provide relief to the public during the holy month of Ramazan, the Utility Stores Corporation (USC) is set to unveil a special discount package starting from April 1, 2021.

    (more…)
  • Rupee gains 18 paisas against dollar

    Rupee gains 18 paisas against dollar

    KARACHI: The Pak Rupee gained 18 paisas against the dollar on Tuesday owing to improved supply of the foreign currency and current account remained in surplus during the first seven months of the current fiscal year, dealers said.

    The rupee ended Rs158.89 to the dollar as compared with the previous day’s closing of Rs159.07 in the interbank foreign exchange market.

    The dealers said that the market had witnessed improved supply of the foreign currency during the day that was sufficient to meet import and corporate demands.

    Besides, they said that the current account of the country remained in surplus during the first seven months of the current fiscal year.

    They said that the improved inflows of workers’ remittances and export receipts would help the local unit to make further gains in coming days.

  • NCCPL directs stock brokers to complete customers’ verification by Feb 28

    NCCPL directs stock brokers to complete customers’ verification by Feb 28

    KARACHI: National Clearing Company of Pakistan Limited (NCCPL) on Tuesday directed stock brokers and clearing members to complete customers’ verification by February 28, 2021 in order to avoid restrictions.

    The NCCPL while issuing the final reminder to authorized intermediaries (AIs) that it had previously issued notification on December 04, 2020 advising the AIs to complete either the biometric verification process or customer verification process for all such accounts opened till September 30, 2020 by February 28, 2021.

    “In order to facilitate AIs and their customers in terms of recent amendments made to Centralized Know Your Customer (KYC) Organization Regulations 2017 that allow customer verification to be performed in replacement of biometric verification process, NCCPL shall be sending an SMS on the registered/verified mobile number of all such accounts opened till September 30, 2020.”

    Detailed/step wise process for completing the customer verification in replacement of biometric verification is prescribed as follow:

    1. This verification activity shall be performed for the resident individual Pakistan Customers that had registered client code, during the aforementioned period, without performing biometric verification.

    2. For this purpose, an SMS shall be sent on the registered/verified mobile number of such investor to obtain his/her consent/acknowledgement for the trading account/KYC registration/UKN issuance requested through the respective AI.

    3. Investors would be required to reply to such SMS with ‘A’ which means acceptance for UKN issuance through the respective AI consent or ‘D’ in case of decline, latest by February 28, 2021.

    4. Where the investor replies with ‘A’, the CKO process for such investors shall be considered as completed.

    5. Where the investor replies with ‘D’, trading/account restriction as per CKO regulations shall be imposed on the underlying trading account of such investor.

    6. Where the investor response is not received within the stipulated timelines, trading/account restriction as per CKO Regulations shall be imposed on the underlying trading account of such investor.

    7. Subsequent to trading/account restriction as mentioned in the point 5 and 6 above, customer trading / account can be re-activated upon a written request submitted by Customer/AI to NCCPL. Accordingly, an SMS shall be re-sent on the registered / verified mobile number of such investor. After receiving the investor’s response with ‘A’, the CKO process of such investors shall be considered as completed and the restriction on trading account shall be removed.

    8. After receiving response from customer as ‘A’ or ‘D’ or in case of no response, NCCPL shall auto-send intimation to customer via SMS regarding necessary action being taken by NCCPL as per CKO Regulation 2017.

    The NCCPL advised all the AIs to complete either the biometric verification process or abovementioned customer verification process of such accounts latest by February 28, 2021, failing which necessary restrictions shall be applied on such accounts in accordance with applicable CKO regulations.

  • Concept of person defined for levy of income tax

    Concept of person defined for levy of income tax

    Income Tax Ordinance, 2001 has defined the concept of person for the collection and deduction of tax on income.

    The Income Tax Ordinance, 2001 updated up to June 30, 2020 issued by the Federal Board of Revenue (FBR), the “person” means a person as defined in section 80 of the Ordinance.

    Section 80 defines person as:

    (1) The following shall be treated as persons for the purposes of this Ordinance, namely: —

    (a) An individual;

    (b) a company or association of persons incorporated, formed, organised or established in Pakistan or elsewhere;

    (c) the Federal Government, a foreign government, a political sub-Division of a foreign government, or public international organisation.

    (2) For the purposes of this Ordinance —

    (a) “association of persons” includes a firm, a Hindu undivided family, any artificial juridical person and anybody of persons formed under a foreign law, but does not include a company;

    (b) “company” means —

    (i) a company as defined in the Companies Ordinance, 1984 (XLVII of 1984);

    (ii) a body corporate formed by or under any law in force in Pakistan;

    (iii) a modaraba;

    (iv) a body incorporated by or under the law of a country outside Pakistan relating to incorporation of companies;

    (v) a co-operative society, a finance society or any other society;

    (va) a non-profit organization;

    (vb) a trust, an entity or a body of persons established or constituted by or under any law for the time being in force;

    (vi) a foreign association, whether incorporated or not, which the Board has, by general or special order, declared to be a company for the purposes of this Ordinance;

    (vii) a Provincial Government;  

    (viii) a Local Government in Pakistan; or

    (ix) a Small Company as defined in section 2;

    (c) “firm” means the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all;

    (d) “trust” means an obligation annexed to the ownership of property and arising out of the confidence reposed in and accepted by the owner, or declared and accepted by the owner for the benefit of another, or of another and the owner, and includes a unit trust; and

    (e) “unit trust” means any trust under which beneficial interests are divided into units such that the entitlements of the beneficiaries to income or capital are determined by the number of units held.

  • What is permanent establishment under income tax law?

    What is permanent establishment under income tax law?

    Income Tax Ordinance, 2001 has defined the meaning of permanent establishment of a foreign entity operating in Pakistan.

    The Income Tax Ordinance, 2001 updated up to June 30, 2020 issued by the Federal Board of Revenue 9FBR), defined as “permanent establishment” in relation to a person, means a fixed place of business through which the business of the person is wholly or partly carried on, and includes –

    (a) a place of management, branch, office, factory or workshop, premises for soliciting orders, warehouse, permanent sales exhibition or sales outlet, other than a liaison office except where the office engages in the negotiation of contracts (other than contracts of purchase);

    (b) a mine, oil or gas well, quarry or any other place of extraction of natural resources;

    (ba) an agricultural, pastoral or forestry property;

    (c) a building site, a construction, assembly or installation project or supervisory activities connected with such site or project but only where such site, project and its connected supervisory activities continue for a period or periods aggregating more than ninety days within any twelve-months period;

    (d) the furnishing of services, including consultancy services, by any person through employees or other personnel engaged by the person for such purpose;

    (e) a person acting in Pakistan on behalf of the person (hereinafter referred to as the “agent”), other than an agent of independent status acting in the ordinary course of business as such, if the agent –

    “(i) has and habitually exercises an authority to conclude contracts on behalf of the other person or habitually concludes contracts or habitually plays the principal role leading to the conclusion of contracts that are routinely concluded without material modification by the person and these contracts are─

    (a) in the name of the person; or

    (b) for the transfer of the ownership of or for the granting of the right to use property owned by that enterprise or that the enterprise has the right to use; or

    (c) for the provision of services by that person; or”

    (ii) has no such authority, but habitually maintains a stock-in-trade or other merchandise from which the agent regularly delivers goods or merchandise on behalf of the other person; or

    Explanation.—For removal of doubt, it is clarified that an agent of independent status acting in the ordinary course of business does not include a person acting exclusively or almost exclusively on behalf of the person to which it is an associate; or ”;

    (f) any substantial equipment installed, or other asset or property capable of activity giving rise to income;

    (g) a fixed place of business that is used or maintained by a person if the person or an associate of a person carries on business at that place or at another place in Pakistan and─

    (i) that place or other place constitutes a permanent establishment of the person or an associate of the person under this sub-clause; or

    (ii) business carried on by the person or an associate of the person at the same place or at more than one place

    constitute complementary functions that are part of a cohesive business operation.

    Explanation.—For the removal of doubt, it is clarified that─

    (A) the term ”cohesive business operation” includes an overall arrangement for the supply of goods, installation, construction, assembly, commission, guarantees or supervisory activities and all or principal activities are undertaken or performed either by the person or the associates of the person; and

    (B) supply of goods include the goods imported in the name of the associate or any other person, whether or not the title to the goods passes outside Pakistan.