Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Exporters demand customs duty waiver on cotton yarn

    Exporters demand customs duty waiver on cotton yarn

    KARACHI: Value-added textile exporters on Tuesday demanded the government of abolishing customs duty on import of cotton yarn to support the industry and ensure timely completion of export orders.

    “The gravity of situation demands the government to immediately abolish customs duty on import of cotton yarn either by passing through a Presidential Ordinance or by an immediate act of Parliament, in the interest of export and the country,” said Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum & Former Central Chairman, Pakistan Hosiery Manufacturers & Exporters Association (PHMA) in a statement.

    The value-added textile exporters are highly perturbed over the unavailability of cotton yarn – which is basic raw material in the local market despite huge export orders are available with the value added textile.

    However, where cotton yarn is available is of sub-standard quality owing to which exporters are unable to meet export commitment. To ensure availability of cotton yarn, PHMA had earlier demanded the Government to allow duty-free import of cotton yarn to facilitate Value-added textile export sector to achieve milestone in exports as cotton yarn was unavailable in the local market.

    Nevertheless, the government considered removing the Regulatory Duty only. Sense of severe unrest and uncertainty prevails as exporters feel it “discriminatory” because in the case of cotton, the Government had allowed complete duty-free import.

    Removal of regulatory duty has supported the value-added textile sector to some extent, whereas, the situation necessitates and demands to also remove the customs duty to fully support the value-added textile sector to complete their export orders which they have materialized for the next several months.

    The government must realize the sensitivity of the matter to support the value-added textile exports as due to unavailability of cotton yarn, the prices of cotton yarn of 30/1 were 235 per pound during the month of October 2020 and now in January 2021 were 260 per pound there has been an increase in the yarn rates by 9.62 percent which has also brought an upshot in the cost of manufacturing pushing the exporters towards unviable situation and un-competitiveness.

    The gravity of situation demands the government to immediately abolish customs duty on import of cotton yarn either by passing through a Presidential Ordinance or by an immediate act of Parliament, in the interest of export and the country.

    The government must accord high priority to the matter in order to turn its policy to enhance export into reality. The exporters profoundly appreciate the government for streamlining and fully automating the sales tax refunds which have been working efficiently and delivering 99 percent result.

    While the customs rebate disbursement has also been done rapidly with deliverance of 99 percent. The exporters also request the government to also streamline and automate the system for disbursement of DLTL/ DDT which should be electronically transferred to the exporters with export proceeds.

    Value Added Textile Export Industry which contributes around 62 percent in total exports, provides highest urban employment particularly to female workforce and supports approximate 40 allied industries.

    In view of its significant importance in the economy and free market mechanism, the government must consider the appeal of the value-added textile sector for duty-free import of cotton yarn to ensure availability of cotton yarn of good quality.

    Such state of affairs demands the government to remove 5 percent custom duty on import of 32 single yarn and below count and the exporters, manufacturers and importers, shall be given full liberty to import yarn from any country till the scarcity of cotton yarn is controlled and required quantity of yarn is available in abundance in all Pakistani markets to complete the export order smoothly.

  • Rupee falls by 35 paisas on import, corporate payments

    Rupee falls by 35 paisas on import, corporate payments

    KARACHI: The Pak Rupee fell by 35 paisas against the dollar on Tuesday owing to jack up in foreign currency demand for imports and corporate payments.

    The rupee ended Rs160.33 to the dollar from the previous day’s closing of Rs159.98 in the interbank foreign exchange market.

    Currency dealers said that the demand of the greenback remained high due to improvement in foreign trade following vaccination initiated for coronavirus.

    They further said that the foreign companies operating in Pakistan were also buying dollars to repatriate profit and dividend for the period ended December 31, 2020.

    They however hoped that the improved export receipts and inflows of workers remittances would help the local unit to gain value.

    On January 02, 2021, Adviser to the Prime Minister on Commerce and Investment, Abdul Razaq Dawood has expressed his satisfaction that the exports in December 2020 have increased by 18.3 percent percent to $ 2,357 million as compared to $ 1,993 million in December 2019, showing an increase of $364 million.

    The Adviser said this was the highest export ever in the previous month of December 2020.

    He said that the export figures showed the resilience of the economy of Pakistan and was a vindication of the government’s policy to keep the wheels of economy running during COVID-19 pandemic. The 6-months’ performance of exports was also discussed in the meeting.

  • FBR to issue ATL 2020 on March 01

    FBR to issue ATL 2020 on March 01

    ISLAMABAD: Federal Board of Revenue (FBR) will issued Active Taxpayers List (ATL) for tax year 2020 on March 01, 2021 which will contain names of those taxpayers who file their returns by due date or file return after due date with fine and penalty.

    Under Rule 81B of Income Tax Rules 2002, the FBR issues ATL on the first day of March in each financial year. The appearance of name of taxpayers on the ATL guarantees certain benefits including lower rate of withholding tax on certain transactions.

    The FBR on Monday advised the taxpayers to assure inclusion of their names in the upcoming ATL by filing annual return for tax year 2020.

    The FBR said that Filing of Income Tax Returns (ITRs) has improved significantly during Tax Year 2020, a statement by the Federal Board of Revenue said. 1.768 million taxpayers filed their income tax returns before the deadline of December 8, 2020 while the tax received by FBR stood at Rs 22 billion by this date. The number of filers has further increased to 2.316 million along with the tax collection rising up to Rs 43.6 billion till January 4, 2021 as compared to 2.181 million filers along with the tax collection of Rs 28 billion during the corresponding period of the previous year, showing an increase of 55 percent in tax collection in current year.

    It is also mentionable here that the number of income tax returns filed after the deadline of December 8, 2020 remained 0.547 million along with the tax collection of an amount worth Rs22 Billion approximately. FBR has launched a number of initiatives for the facilitation of taxpayers that have resulted in the increased number in filing of Income Tax Returns.

    FBR will issue the updated list of Active Taxpayers after March 01, 2021 and only those taxpayers will be included in the list who have filed their Income Tax Returns for Tax Year 2020.

    Enlistment in Active Taxpayers List comes with a variety of benefits for taxpayers that include exemption from Withholding Tax in a number of financial transactions and withholding of tax at half of the rate on many other financial transactions carried out by non-filers i.e those not on Active Taxpayers List. Possible legal action on account of concealment of income based of tax withheld on any financial transaction.

    It may be noted that the amount of fine on late filing increases in proportion with the delayed period of time.

    FBR has urged all taxpayers to file their Income Tax Returns at their earliest to get their names enlisted in the upcoming ATL.

  • Share market gains 252 points amid buying activity

    Share market gains 252 points amid buying activity

    KARACHI: The share market gained 252 points on Monday owing to positive sentiments prevailed and the market witnessed buying activity.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 44,686 points as against 44,434 points showing an increase of 252 points.

    Analysts at Arif Habib Limited said that the market opened on a positive note and carried the momentum shown on the last trading day, especially with reference to resolution of circular debt that resulted in strong buying in energy chain (HUBC, KAPCO, PSO).

    E&P sector also saw continuation of buying interest, not only due to an increase in international crude oil prices (which jumped 2 percent during the session) as well as the expectation of release of stuck receivables for PPL and OGDC.

    Cyclicals (Cement and Steel) saw slump in stock prices due to profit booking. Tech stocks also bore selling pressure on the latest circular from NCCPL for implementation of close out mechanism for Future Contracts, as Tech stocks composes the most of the open positions in Futures contracts.

    Among scrips, PAEL topped the volumes with 27.3 million shares, followed by HUBC (25.3 million) and HASCOL (24.9 million).

    Sectors contributing to the performance include E&P (+163 points), Power (+127 points), O&GMCs (+96 points), Banks (++77 points) and Textile (+30 points).

    Volumes increased from declined from 642.6 million shares to 540.6 million shares (-16 percent DoD). Average traded value also declined by 2 percent to reach US$ 166.6 million as against US$ 170.7 million.

    Stocks that contributed significantly to the volumes include PAEL, HUBC, HASCOL, WTL and TRG, which formed 23 percent of total volumes.

    Stocks that contributed positively to the index include HUBC (+104 points), PSO (+79 points), PPL (+78 points), OGDC (+63 points) and MCB (+31 points). Stocks that contributed negatively include TRG (-60 points), SYS (-33 points), LUCK (-31 points), DGKC (-21 points) and ENGRO (-19 points).

  • PTCL awarded optic fiber cable projects worth Rs3 billion

    PTCL awarded optic fiber cable projects worth Rs3 billion

    KARACHI: Pakistan Telecommunication Company Limited (PTCL) has been awarded two optic fiber cable projects worth Rs3 billion for providing connectivity in various districts of Sindh province.

    The Universal Service Fund (USF) has awarded two Optic Fiber Cable (OFC) project contracts worth approximately Rs3 billion to PTCL for providing connectivity in Ghotki, Kashmore, Sukkur & Khairpur districts at a special ceremony held at Governor House, Karachi, a statement said on Monday.

    Imran Ismail, Governor of Sindh was accompanied by Syed Amin Ul Haque, Federal Minister for Information Technology (IT) and Telecommunication on the occasion.

    The contracts were signed by Haaris Mahmood Chaudhary, CEO, USF and Nadeem Khan, Acting CEO & Group Chief Financial Officer, PTCL.

    Senior officials of the Government of Sindh, Ministry of IT and Telecommunication, USF and PTCL were also present at the ceremony.

    On the occasion, Imran Ismail, Governor of Sindh said: “Today’s event marks another landmark achieved in the history of Pakistan and will go a long way in taking the developmental work being done by Government of Pakistan to a greater level. I am also hopeful that with the consistent efforts and spirits, Ministry of IT and Telecommunication will continue to undertake more challenging and productive programs in the future, for the promotion of IT and Telecommunication related services.

    “I would like to congratulate Federal Minister for IT and Telecommunication Syed Amin ul Haque, the dynamic teams of USF & PTCL on award of these projects that have been designed to connect 372 Educational Institutions, 170 Health Facilities, 217 Government Offices and 131 Banks within 5 KM radius of the node.

    “I wish them all the very best for implementation of project objectives.”

    Imran Ismail said that these projects will not only provide a digital highway for seamless broadband coverage to people residing in Ghotki, Kashmore, Sukkur and Khairpur Districts but also improve the lives of people, create job opportunities for them and empower local communities.

    Syed Amin Ul Haque, Federal Minister for IT and Telecommunication while addressing on the occasion said: “I believe that Imran Khan, Prime Minister of Pakistan, realizes the importance of information technology for the country as he envisioned Digital Pakistan and proved his commitment to turn this vision into reality.”

    Syed Amin ul Haque also lauded the great performance of Ministry of IT and Telecommunication and its affiliated organizations. Moreover, IT parks are being created across the country, along with Data Centers, policy on Cloud, cyber security, manufacturing of Smart phonesand much more.

    Speaking at the ceremony, Nadeem Khan, Acting CEO & Group Chief Financial Officer, PTCL said: “Being the national carrier, PTCL is the backbone of country’s communication infrastructure and primary internet service provider. We serve people of Pakistan from large metropolitan cities to remote rural areas. We are glad to collaborate with USF for establishment and operation of optical fiber connectivity in Ghotki, Kashmore, Sukkur and Khairpur districts. Aligned with the vision of a Digital Pakistan, we are committed to play our role in supporting the underserved communities and empower them for a better future.”

    While sharing his views at the ceremony, Haaris Mahmood Chaudhary, CEO, USF said: “I take the opportunity to say here that all these achievements have only been possible due to constant efforts of the Government of Pakistan. Federal Minister and Secretary for IT and Telecommunication have been torch bearers of the vision for a “Digital Pakistan” and have enabled USF to transform the lives of people of the country. They have given us tremendous cooperation, help and support, without which all this could not be achieved.

  • Rupee falls by 15 paisas on higher dollar demand

    Rupee falls by 15 paisas on higher dollar demand

    KARACHI: The Pak Rupee fell by 15 paisas against the dollar on Monday – the first trading day of 2021 – as the foreign exchange market opened after three days break.

    The rupee ended Rs159.98 to the dollar from the closing of Rs159.83 of last trading day on December 31, 2020 in interbank foreign exchange market.

    Currency dealers said that the rupee was under pressure because of high demand of the foreign currency for import and corporate payments.

    The market was opened after three days due to bank holiday on January 01 and the two weekly holidays.

    The dealers said that the market also witnessed supply of the dollar in the shape of export receipts and workers’ remittances, which supported the rupee from significant fall.

    They said that the market was remained optimistic about improvement in rupee value in coming days due to improved inflows of export receipts.

    Adviser to the Prime Minister on Commerce and Investment, Abdul Razaq Dawood commented on the exports in December 2020 which have increased by 18.3 percent to $ 2,357 million as compared to $ 1,993 million in December 2019.

  • Inland Revenue examines persons buying motor vehicles through customs auction

    Inland Revenue examines persons buying motor vehicles through customs auction

    KARACHI: The office of Inland Revenue (IR) of Federal Board of Revenue (FBR) has launched examination of persons who purchased large number of vehicles through customs auctions.

    Sources in IR said on Monday that the probe had been initiated on the directives of the Federal Tax Ombudsman (FTO) regarding some bidders were frequently indulged in participating in bidding and buying large number of vehicles.

    The FTO in a case of stuck up motor vehicles at ports, which were brought into Pakistan through personal baggage, transfer of residence or under gift schemes in violation of SRO 52(I)/2019 dated January 15, 2019 issued by the ministry of commerce.

    As per details till November 25, 2020 the number of stuck up vehicles were 587 at the MCC East and West. Around 167 vehicles were auctioned till the date under review.

    During the investigation of the case the FTO was told that a small number of so-call professional bidders purchased large number of vehicles regularly and then sell the same on huge profit in the open market.

    “One of the reasons of purchase of vehicles by these bidders is that many interested persons from the general public either do not possess NTN or they don’t want to bring their names on record due to various reasons including subsequent taxation, hence, they prefer to purchase goods or vehicles through these bidders,” the FTO was informed.

    The FTO was further informed that 62 bidders had purchased 167 vehicles auctioned during the period from July to November 2020, which 20 bidders purchased 117 vehicles.

    The sources said that the FTO was told that an e-auction was to be introduced by the FBR and in this regard SRO 1174(I)/2020 dated October 26, 2020 was already issued.

    However, date for implementation of e-auction rules would not be notified by the FBR later on as the e-auction module is still under development.

    Customs authorities assured the FTO stating that after implementation of e-auction, the goods ripe for auction would be disposed of without delay, besides, the mafia of professional bidders would be addressed, resulting in improvement in revenue realization.

    The findings of the FTO revealed: “During investigation, another aspect came to surface i.e. whether the bidders who participate in the auction proceedings declare their economic activities in their income tax returns.

    “It is most probable that these economic activities may not be monitored by the IRS Wing, which if monitored carefully with due diligence may enhance legitimate revenue of the government.

    “Thus, there is a need to share data/information with the concerned field formations of Inland Revenue so that this sector is brought into the tax net.”

    The FTO recommended that the Collector, MCC Appraisement and Facilitation East and West, Karachi to pass on information about the bidders who participated in auctions on regular basis to respective IRS field formations.

  • FBR directs issuing exemption certificates to gratuity, provident funds

    FBR directs issuing exemption certificates to gratuity, provident funds

    ISLAMABAD: Federal Board of Revenue (FBR) has issued directives for grant of income tax exemption to gratuity and provident funds.

    Through an office order, the FBR issued directives on complaints received from taxpayers that tax offices were refusing to grant income tax exemption against gratuity funds/ provident funds.

    The FBR expressed concern on the treatment being given by some field formations on the provident funds/ gratuity funds requests for exemption certificates under section 159/150/151 of the Income Tax Ordinance, 2001.

    The FBR said that the taxpayers had pointed out the exemption granted to the funds prior to tax year 2013, the tax offices were refusing the request for exemption certificates.

    The tax offices were asking the taxpayers to move fresh applications for recognition of the funds on the pretext that the fact of their approval is not available/evident in the FBR’s system IRIS.

    The FBR clarified the position by stating that the exemption requests of recognized provident/gratuity funds cannot be refused. Therefore, the revenue body directed the tax offices to process the exemption certificate requests of all the provident / gratuity funds who produce evidence of recognition under the relevant rules framed under the Income Tax Ordinance, 2001 or repealed law Income Tax Ordinance, 1979.

    “Further, asking for fresh applications for recognition merely on the pretext that such recognition is not available on the system is not a valid excuse,” the FBR directed.

    However, the FBR cautioned the tax offices: “Mere issuance of exemption certificate under section 159 of the Income Tax Ordinance, 2001 does not foreclose the possibility of reviewing/recalling such action in case it is later-on discovered that the taxpayer produced some incorrect/invalid or wrong evidence for obtaining the favor.”

  • Sales tax recovery: movable, immovable property may be sold without attachment

    Sales tax recovery: movable, immovable property may be sold without attachment

    ISLAMABAD: Sales tax laws have given immense powers to officers of Inland Revenue and they can recover due sales tax by selling movable or immovable property without attachment.

    Sources in Federal Board of Revenue (FBR) told PkRevenue.com that under Section 48 of the Sales Tax Act, 1990 a mechanism for recovery of arrears of tax has been defined.

    For the purpose of recovery of tax, penalty or any other demand raised under this Sales Tax Act, 1990, the officer of Inland Revenue shall have the same powers which under the Code of Civil Procedure 1908 (V of 1908), a Civil Court has for the purpose of recovery of an amount due under a decree.

    They said that Section 48(1)(b)(c) clearly mentioned that tax officials may attach and sell or sell without attachment any movable or immovable property of the registered person from whom tax is due.

    The tax officers are also empowered to recover the sales tax amount from a person whose amount is stuck up with other tax authorities.

    “[The tax officers may] deduct the amount from any money owing to person from whom such amount is recoverable and which may be at the disposal or in the control of such officer or any officer of Income Tax, Customs or Central Excise Department,” according to the law.

    The officers of Inland Revenue can order any person who holds money of a person in default, besides the officers can also:

    “Stop removal of any goods from the business premises of such person till such time the amount of tax is paid or recovered in full;

    “require by a notice in writing any person to stop clearance of imported goods or manufactured goods or attach bank accounts;

    “seal the business premises till such time the amount of tax is paid or recovered in full;

    “recover such amount by attachment and sale of any movable or immovable property of the guarantor, person, company, bank or financial institution, where a guarantor or any other person, company, bank or financial institutions fail to make payment under such guarantee, bond or instrument.”

    Provided that the Commissioner Inland Revenue or any officer of Inland Revenue shall not issue notice under this section or the rules made thereunder for recovery of any tax due from a taxpayer if the said taxpayer has filed an appeal under section 45B in respect of the order under which the tax sought to be recovered has become payable and the appeal has not been decided by the Commissioner (Appeals), subject to the condition that ten per cent of the amount of tax due has been paid by the taxpayer.

    “If any arrears of tax, default surcharge, penalty or any other amount which is adjudged or payable by any person and which cannot be recovered in the manner prescribed above, the Board or any officer authorized by the Board, may, write off the arrears in the manner as may be prescribed by the Board, the FBR said.

  • President Alvi assures business community of resolving gas shortage

    President Alvi assures business community of resolving gas shortage

    KARACHI: President of Pakistan Dr. Arif Alvi on Saturday assured business community of resolving issue of gas shortage on priority basis.

    In response to deep concerns expressed by President Karachi Chamber of Commerce Industry (KCCI) M. Shariq Vohra on serious gas crises being suffered by Karachi, President Dr. Arif Alvi assured to take up this matter with relevant ministers and update the business community within a couple of days on what exactly were the causes for gas shortages and what strategies were being devised to deal with the situation, according to a statement issued by the KCCI.

    The assurance was given at a meeting held here at Governor House on Saturday in which President KCCI Shariq Vohra informed President Dr. Alvi that the ongoing gas crises in Karachi has become a very serious issue that needs to be probed because at a time when the exports were picking up, some elements somewhere in the system abruptly intervened and created gas shortage which has resulted in closure of many factories.

    He feared that if the gas crises go on like this, it would become difficult not only for the exporters to dispatch their shipments on time but also the general industries will not be able ensure smooth supply goods in the local markets.

    He said that the hardships being faced by the business & industrial community of Karachi due to suspension of gas supply needs to be given special attention and promptly resolved otherwise, the situation would have a serious impact on the industrial performance and the economy, besides triggering massive unemployment and poverty.

    Appreciating President Alvi’s efforts being made for the betterment differently abled persons in the society who deserve access to employment, President KCCI assured that the Karachi Chamber fully supports President Alvi’s initiative and has started working on this project.

    In this regard, relevant information has already been posted on KCCI’s website while emails and letters have also been sent to KCCI members and a meeting has also been convened in the month of January to discuss the possibilities of employing maximum number of disabled people in various factories and industrial units.