Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Weekly Review: market likely to stay green as COVID cases decline

    Weekly Review: market likely to stay green as COVID cases decline

    KARACHI: The stock market likely to stay green during next week as the country recorded a decline in infection rate of COVID cases.

    Analysts at Arif Habib Limited said that the market to continue trading in the green. COVID cases have seen a further decline with infection ratios coming down to below 4 percent this week.

    Cyclicals are expected to continue being in the limelight while recent rise in oil prices may continue to attract attention in E&P scrips.

    The benchmark KSE-100 index of Pakistan Stock Exchange is currently trading at a PER of 7.6x (2021) compared to Asia Pac regional average of 17.1x and while offering DY of 6.3 percent versus 2.6 percent offered by the region.

    The domestic bourse continued its ascent this week, closing at 46,906 points (+520 points WoW), a ~3.5-Yr high. Rally in the equity market has continued with investors celebrating the start of the vaccination drive across the country. Moreover, with the onset of the result season, corporate earnings are showing and are expected to continue showing a strong momentum particularly amongst cyclicals.

    This week agreements were also initiated between IPPs and CPPAG attracting bulls once again to the power sector while jump in oil prices (Arab Light is up 4.6 percent WoW) kept E&P scrips in the green as well.

    Sector-wise positive contributions came from

    i) Oil & Gas Exploration Companies (334 points),

    ii) Power Generation & Distribution (101 points), and

    iii) Fertiliser (90 points).

     Whereas sectors that contributed negatively included: Technology and Communication (94 points), Engineering (59 points) and Commercial Banks (45 points).

    Top scrip-wise contributors were MARI (147 points), OGDC (93 points), and HUBC (78 points) while laggards included TRG (130 points), HBL (46 points), and INIL (38 points).

    Foreign selling continued this week clocking-in at USD 2.7 million compared to a net sell of USD 9.1 million last week. Selling was witnessed in Cements (USD 2.0 million) and technology and Communication (USD 0.5 million).

     On the domestic front, major buying was reported by Individuals (USD 9.5 million and Companies (USD 6.6 million). Average volumes arrived at 554 million shares (down by 18 percent WoW) while average value traded settled at USD 171 million (up by 1.2 percent WoW).

  • Exports cross $2 billion for four consecutive months in eight years

    Exports cross $2 billion for four consecutive months in eight years

    ISLAMABAD: Pakistan’s exports have crossed over $2 billion for the fourth consecutive months in January 2021 for the first time in last eight years, a statement said on Friday.

    A consultative meeting was held by the Advisor to Prime Minister on Commerce and Investment, Abdul Razaq Dawood, via video link to review the provisional trade data till the month of January 2021.

    He was informed that exports in January 2021 have increased by 8 percent to USD 2,135 million as compared to USD 1,978 million in January 2020.

    He was informed that this is the first time in last eight years that exports have crossed the $ 2 billion mark for four consecutive months.

    He was briefed that in January 2021, an increasing trend has been witnessed in the export of value-added and non-traditional products.

    The exports of Jerseys & Cardigans increased by 72 percent, Pharmaceutical by 55 percent, T-shirts by 43 percent, Plastics by 24 percent, Women’s Garments by 21 percent, Home Textiles by 19 percent, Textile Made-up by 11 percent, Men’s Garments by 8 percent and Rice by 7 percent as compared to January 2020.

    He was also informed that decreasing trend was noted in export of mostly non-value-added products.

    The exports of Maize decreased by 82 percent, Raw Leather by 23 percent, Cotton yarn by 11 percent, Cotton Fabric by 14 percent and Meat by 5 percent as compared to January 2020.

     The meeting was informed that geographically, in January 2021 exports increased to Canada (43 percent), Australia (42 percent), the United States (36 percent), South Africa (27 percent), China (21 percent), the United Kingdom (21 percent), Belgium (18 percent), and Saudi Arabia (14 percent).

    However, there was decrease in exports to Jordan (-68 percent), Senegal (-59 percent), Italy (-24 percent), Turkey (-21 percent), Bangladesh and the United Arab Emirates (-19 percent each).

    The 7-months’ performance of exports was also discussed in the meeting.

    The advisor was informed that the provisional export data for the period July-January 2020-21 showed that the exports increased by 5.5 percent, to USD 14,245 million as compared to USD 13,507 million during the same period last year.

    During July-January 2020-21, the exports of value-added and non-traditional products increased especially for Tents & Canvas (49 percent), Jerseys & Cardigans (37 percent), Pharmaceuticals (28 percent), Cutlery (27 percent), Socks & Stockings (26 percent), Women’s Garments (22 percent), Home Textiles (17 percent) and Textile Made-ups (9 percent) as compared to the same period last year.

    He was informed that as compared to the same period in the previous year, during July-January 2020-21 the export decrease was observed in mostly non-value added products, such as Cotton (-96 percent), Maize (-49 percent), Raw Leather (-30 percent), Cotton yarn (-24 percent) and Cotton Fabric (-9 percent).

    Dawood was informed that on the basis of export growth Pakistan’s Top markets for 7-months’ period are Indonesia (43 percent), Australia (22 percent), the United States (21 percent), the United Kingdom (21 percent), Poland (14 percent), Germany (12 percent), the Netherlands (11 percent) and China (9 percent).

    He was further informed that compared to last year, the markets showing declining exports during July-January 2020-21 were Thailand (-43 percent), Malaysia (-24 percent), Sri Lanka (-23 percent), the United Arab Emirates (-21 percent), Bangladesh (-18 percent), Italy (-7 percent) and Spain (-5 percent).

    Dawood advised the officials of the commerce ministry that much more needs to be done. He paid rich tributes to Pakistan’s exporters for this performance during difficult times despite the COVID-19 pandemic and contraction in Pakistan’s major markets. He urged them to aggressively focus on capturing a larger share of international exports.

  • Registered person defined under sales tax

    Registered person defined under sales tax

    Sales tax laws have defined ‘person’ for determining transactions i.e. supplies and purchases and application of sales tax rate.

    The Sales Tax Act, 1990 [updated June 30, 2020 issued by the Federal Board of Revenue (FBR)] explained the following:

     (21) “person” means,–

    (a) an individual;

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

    (c) the Federal Government;

    (d) a Provincial Government;

    (e) a local authority in Pakistan; or

    (f) a foreign government, a political subdivision of a foreign government, or public international organization;]

    (22) “prescribed” means prescribed by rules made under this Act;

    (22A) “Provincial sales tax” means tax levied under, Provincial laws or laws relating to Islamabad Capital Territory, which are declared by the Federal Government, through notification in the official Gazette to be Provincial Sales Tax for the purpose of input tax;

    (23) “registered office” means the office or other place of business specified by the registered person in the application made by him for registration under this Act or through any subsequent application to the 2[Commissioner];

    (24) “registration number” means the number allocated to the registered person for the purpose of this Act;

    (25) “registered person” means a person who is registered or is liable to be registered under this Act:

    Provided that a person liable to be registered but not registered under this Act shall not be entitled to any benefit available to a registered person under any of the provisions of this Act or the rules made thereunder.

  • Customs values increased for imported imitation jewellery

    Customs values increased for imported imitation jewellery

    KARACHI: Customs values of imported artificial / imitation jewellery have been increased for determination of duty and taxes at the time of customs clearance.

    The Directorate General of Customs Valuation has issued Valuation Ruling No. 1509/2021 dated January 27, 2021.

    The directorate said that earlier the customs values of artificial jewellery were determined under Section 25A of Customs Act, 1969 through Valuation Ruling No. 1376/2019 dated May 30, 2019.

    The directorate general of customs valuation was tasked by the Federal Board of Revenue (FBR) to identify the items/goods where variation with respect to values in exporting countries viz-a-viz import values in Pakistan were observed and where valuation ruling already exist.

    Accordingly, a special team was constituted in Directorate General of Customs Valuation, which identified the subject items where vast variations in declarations/specifications were observed.

    Accordingly, an exercise was initiated to re-determine the customs values of artificial imitation jewellery under Section 25A of the Customs Act, 1969.

    The directorate invited stakeholders to present evidence of the import values of the goods.

    The meetings were attended by representatives from M/s. GA Jahangir & Associates authorized by various importers and stakeholders. The point of view heard in detail to arrive at customs values of subject goods.

    The  stakeholders claimed that their declared values were true transactional values and may be accepted as such. The stakeholders also submitted their proposal regarding values of artificial jewellery but failed to substantiate said values with documentary evidences.

    The customs values of following artificial jewellery on import of various origins have been amended:

    01. Electroplated white/yellow, without stones/beads:

    The customs value enhanced to $3.85/kg from $3.54 on import from China.

    The customs value enhanced to $5.40/kg from $4.97 on import from other origins.

    02. Electroplated white/yellow, with plastic stones / beads:

    The customs value enhanced to $4.40/kg from $4.12 on import from China.

    The customs value enhanced to $6.55/kg from $6.12 on import from other origins.

    03. Fancy Electroplated white/yellow, with crystal stones/beads:

    The customs values enhanced to $12.5/kg from $11 on import from China.

    The customs values enhanced to $27.35/kg from $24 on import from other origins.

    In the previous valuation ruling a separate rate for imitation jewellery import from India was given. However, in the latest valuation ruling the rate of the goods on import from India has been eliminated.

  • What is output tax under Sales Tax Act?

    What is output tax under Sales Tax Act?

    Sales tax law has defined output tax as a supply of goods, made by the person.

    The Sales Tax Act, 1990 (updated June 30, 2020) issued by the Federal Board of Revenue (FBR) has defined output tax in relation to a registered person as:

    (more…)
  • Stock market witnesses slight decline amid profit taking

    Stock market witnesses slight decline amid profit taking

    KARACHI: The stock market fell by nominal 28 points on Thursday owing to profit taking as investors preferred profit booking considering long weekend.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 46,905 points as against previous day’s closing of 46,933 points, showing a slight decline of 28 points.

    Analysts at Arif Habib Limited said that last trading session of the short trading week made yet another new high of 47,339 points with E&P, O&GMCs, Banks and Cement sectors contributing to the upsurge.

    Being a long weekend ahead, Investors preferred booking profit than holding the positions to meet an unforeseen event over the weekend.

    Resultantly, the index eroded the gains of 406 points made during the session to close the session -28 points. Banking sectors saw almost across the board slide, whereas Engineering (Steel) sector also saw regression. Among scrips, PRL realized trading volumes of 34.4 million shares, followed by TRG (30.3 million) and KEL (18.6 million).  

    Sectors contributing to the performance include E&P (+119 points), Fertilizer (+21 points), Banks (-37 points), Pharma (-34 points), and Technology (-29 points).

    Volumes declined from 616.3 million shares to 440.3 million shares (-29 percent DoD). Average traded value also declined by 11 percent to reach US$ 165.1 million as against US$ 184.2 million.

    Stocks that contributed significantly to the volumes include PRL, TRG, KEL, PIBTL and HASCOL, which formed 26 percent of total volumes.

    Stocks that contributed positively to the index include MARI (+70 points), OGDC (+42 points), LUCK (+29 points), SYS (+18 points) and ENGRO (+16 points). Stocks that contributed negatively include TRG (-47 points), AGP (-19 points), MCB (-16 points), PAKT (-14 points) and MLCF (-14 points).

  • PSX issues notices to PIA, 10 companies for unusual price movement

    PSX issues notices to PIA, 10 companies for unusual price movement

    KARACHI: The Pakistan Stock Exchange (PSX) on Thursday issued notices of unusual movement in price or volume to 11 companies, including Pakistan International Airlines Corporation Limited (PIACL).

    The PSX in the notice to PIACL said that if there are unusual movements in the price or volume of its traded securities is observed:

    (a) Details of any matter or development of which it is aware that is or may relevant to the unusual movements, or

    (b) A statement of the fact that it is not aware of any such matter or development.

    “It may be noted that while reviewing the trading data of the company, it has been observed that the price of PIA has experienced substantial increase during last two months.”

    The PSX further said: “In new of the above and in the absence of any material announcement of the company, you are advised to furnish the reason and/ or any material information in company’s knowledge which may have resulted in substantial increase in price in terms of clause 5.6.3. of PSX Regulations and Section 97 of the Securities Act, 2012 immediately.”

    The PSX issued notices of unusual movement in price or volume to following companies:

    01. Tri-Star Power Limited

    02. Pakistan Cables Limited

    03. Orient Rental Modaraba

    04. First Pak Modaraba

    05. The Universal Insurance Company Limited

    06. Hi-Tech Lubricants Limited

    07. Telecard Limited

    08. MCB Arif Habib Savings and Investments Limited

    09. Silkbank Limited

    10. Nagina Cotton Mills Limited

    11. Pakistan International Airlines Corp

  • Pakistan’s foreign exchange reserves increase to $20.163 billion

    Pakistan’s foreign exchange reserves increase to $20.163 billion

    KARACHI: Pakistan’s total liquid foreign exchange reserves have increased by $57 million to $20.163 billion by week ended January 29, 2021, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.106 billion by week ended January 22, 2021.

    The official reserves of the State Bank increased by $33 million to $13.031 billion by week ended January 29, 2021 as compared with $20.106 billion a week ago.

    The foreign exchange reserves held by commercial banks also increased by $24 million to $7.132 billion by week ended January 29, 2021 as compared with $7.108 billion a week ago.

  • Rupee gains 19 paisas ahead of long weekend

    Rupee gains 19 paisas ahead of long weekend

    KARACHI: The Pak Rupee gained 19 paisas against the dollar on Thursday despite the higher demand for dollar ahead of holidays.

    The rupee ended Rs159.99 to the dollar from the previous day’s closing of Rs160.18 in the interbank foreign exchange market.

    Currency dealers said that the market witnessed sufficient supply of the foreign currency in the shape of export receipts and workers’ remittances.

    They said the demand for import and corporate payments was also high because of upcoming three straight holidays.

    The government has announced public holiday on Friday February 05, 2021 on account of Kashmir Solidarity Day. It will follow with two weekly holidays, making three straight holidays.

  • Jewelers making cash transactions above Rs2 million liable to comply with FATF conditions: FBR

    Jewelers making cash transactions above Rs2 million liable to comply with FATF conditions: FBR

    ISLAMABAD: The Federal Board of Revenue (FBR) has said that jewelers making cash transactions with their buyers and sellers above Rs2 million are liable to monitoring under Anti-Money Laundering (AML)/Countering Financing of Terrorism (CFT), sources said on Thursday.

    In this regard the FBR issued guidelines for persons dealing in precious stones and metals.

    The procedures have been issued under anti money laundering (AML) and combating financing of terrorism (CFT) and to meet conditionalities of Financial Action Task Force (FATF).

    A jeweler is required to retain record of such transactions for at least five years following the completion of a transaction.

    Bringing Designated Non-Financing Business and Professions (DNFBP) into AML/CFT laws is one of the major requirements of the FATF. The FBR on September 29, 2020 issued SRO 924(I)/2020 to notify regulations namely Anti-Money Laundering and Countering Financing of Terrorism Regulations for DNFBPs, 2020.

    The DNFBPs have been defined as real estate agents, jewelers and accountants.

    The latest procedure for compliance by jewelers has also been issued to make this segment into money laundering free business.

    The sources said a person engaged in the business of precious stones is not subject to AML/CFT if he is selling or buying jewellery below Rs2 million in cash.

    According to the procedures issued by the FBR, if a person is a retail merchant and selling or buying jewellery e.g. rings, bracelets, necklaces and other bodily ornaments may not be a Dealers in Precious Metals and Stones (DPMS) in one year or one month, but the person starts selling or buying such items over Rs2 million threshold, in subsequent years or months, the person would be subject to AML/CFT.

    The FBR interprets the Rs2 million threshold as a cash transaction below threshold amount, if the cash transaction is below Rs2 million but is part of a series of transactions related to the purchase of the same item or items totaling Rs2 million or above.

    The revenue body said that the business of precious stones and metals may be abused by criminals and terrorists because of a number of factors.

    “They can be of very high value, but still very small and therefore very easy to carry, transport and conceal. Transferring ownership does not require any formal registration process unlike for real estate, motor vehicles or share ownership,” the FBR said, adding that the holder of the precious stone and metal is the owner and can be held anonymously without a need for records to be kept.

    “In terms of gold, it can be considered as a universally accepted currency and therefore, investing in gold to launder illegal earnings would be easy as well as profitable,” the FBR added.

    The FBR also issued similar procedures for real estate agents and accountants.