Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Share market plunges by around 1000 points on rising political uncertainty

    Share market plunges by around 1000 points on rising political uncertainty

    KARACHI: The share market fell by around 1,000 points on Monday due to increase in headline inflation and rising uncertainty on political front.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 39,072 points as against 40,070 points showing a decline of 998 points.

    Analysts at Arif Habib Limited said that the market lost another 1206 points during the session, especially in the last half hour of trading.

    Over the weekend, release of CPI data hinted an increase in Policy rate as the negative real interests have increased post increase in CPI.

    Political uncertainty, on the other hand, has also caused panic amongst Investors.

    Gradual redemptions from Mutual Fund investors have so far resulted in market meltdown, however, non-blue chip stocks as well as off-board scrips have sustained heavy losses in terms of drop in prices as compared to blue chip stocks from their recent highs.

    Selling activity was observed almost across the board, with major contribution from E&P, Banks, O&GMCs sectors. Amongst scrips, HASCOL topped the volumes with 60.4 million shares, followed by UNITY (31.9 million) and KEL (29.1 million).

    Sectors contributing to the performance include Banks (-130 points), Power (-113 points), Fertilizer (-111 points), E&P (-103 points) and O&GMCs (-71 points).

    Volumes increased from 348.6 million shares to 409.9 million shares (+18 percent DoD). Average traded value also declined by 1 percent to reach US$ 76.5 million as against US$ 75.6 million.

    Stocks that contributed significantly to the volumes include HASCOL, UNITY, KEL, TRG and PIBTL, which formed 39 percent of total volumes.

    Stocks that contributed positively to the index include DAWH (+8 points), GHGL (+4 points), KOHC (+1 points), FML (+1 points) and ATLH (+0 points). Stocks that contributed negatively include HUBC (-74 points), ENGRO (-56 points), PPL (-50 points), TRG (-36 points) and COLG (-32 points).

  • Rupee gains 19 paisas against dollar

    Rupee gains 19 paisas against dollar

    The Pakistani Rupee gained 19 paisas against the US Dollar on Monday, closing at Rs164.32 compared to the previous closing rate of Rs164.51 on October 2, 2020, in the interbank foreign exchange market. This appreciation is attributed to reduced demand for import payments, market dealers reported.

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  • Policy unveiled to export goods to Afghanistan, Central Asian Republics

    Policy unveiled to export goods to Afghanistan, Central Asian Republics

    ISLAMABAD: The ministry of commerce has unveiled Export Policy Order 2020 and explained export of goods allowed against Pakistan currency to Afghanistan against Central Asian Republics.

    The ministry issued SRO 901(I)/2020 dated September 25, 2020, and stated regarding ‘exports to Afghanistan and through Afghanistan to Central Asian Republics’ that:

    (1) subject to the provisions of sub-paragraph (1) of paragraph 4, export of following perishable goods shall be allowed against Pakistan currency on filing of regular shipping bills without the requirement of E form, namely:

    (a) fruits;

    (b) vegetables;

    (c) dairy products; and

    (d) meat.

    (2) Export of the items in sub-paragraph (1) shall not be entitled to –

    (a) zero rating of sales tax on taxable goods;

    (b) rebate of central excise duty; and

    (c) payment of drawback of customs duty.

    (3) Subject to the provisions of sub-paragraph (1) of paragraph 4 and Schedule III, all items and commodities produced or manufactured in Pakistan, exported via land route or by air against irrevocable letters of credit, confirmed orders on realization of export proceeds through banking channel or advance payment, in convertible foreign currency, shall be allowed-

    (a) zero-rating of sales tax on taxable goods;

    (b) rebate of Federal excise duty; and

    (c) repayment or drawback of customs-duty:

    Provided that the above facility of duty and tax-exemption including refund of petroleum levy shall not be available to the export of petroleum products unless there is a Government-to-Government contract and export is done only through oil marketing companies (OMCs) duly registered with the Oil and Gas Regulatory Authority (OGRA).

    Surplus of JP-8, as declared and decided in the product review meetings, shall also be allowed to be exported by the refineries or OMCs.

    If any of the OMC is of the intention to import and then export JP-8 to Afghanistan, that specific volumes shall be allowed through foreign exchange remittance from the buyers without availing any exemption of duties and taxes.

    The proof that goods exported from Pakistan have reached Afghanistan shall be verified on the basis of copy of import clearance documents by Afghan Customs Authorities across the border:

    Provided further that this condition shall not apply to exports made to International Security Assistance Force (ISAF) and Defense Logistic Support Center (DLSC) in Afghanistan. To claim the facility of zero rating of sales tax or duty drawbacks as well as Federal excise duty refund against goods exported to ISAF and DLSC, the customs authorities shall allow refunds on the basis of receipts issued by the Afghan offices of these agencies confirming that they have received the goods. The receipt shall be reconfirmed by the representatives of these agencies in Pakistan;

    (4) Packages or retail packing shall prominently and indelibly be marked with the expression “For Export Only”, and in case of international donor agencies “For Export only – supply for aid to Afghanistan (insignia of the organization) not for sale in Pakistan”;

    (5) Export shall be allowed only through authorized export land routes i.e. Torkham, Chaman and Ghulam Khan and Qamar Uddin Karez.

    (6) Export from Export Processing Zones, manufacturing bonds and export-oriented units, except vegetable ghee and cooking oil, shall be allowed but these exports shall not be entitled to-

    (a) zero-rating of sales tax on taxable goods;

    (b) rebate of federal excise duty; and

    (c) repayment or drawback of customs-duty:

    Provided that the export of PVC and PMC (HS Code 3901-3914) materials from the Export Processing Zones, manufacturing bonds and export-oriented units shall be eligible for zero rating of sales tax:

    Provided further that export made to International Security Assistance Force (ISAF) and Defense Energy Support Center (DESC) may be made on deferred payment basis, without opening of letter of credit, subject to the following conditions, namely: –

    (a) the waiver shall be applicable strictly to exports made to ISAF and DESC;

    (b) shipments to ISAF and DESC are made by their authorized agents duly endorsed by the ISAF and DESC receiving agent in Afghanistan; and

    (c) payment of foreign exchange is received within sixty days of shipment.

    (7) Zero rating of sales tax or duty drawbacks as well as Federal excise duty refund against goods exported to ISAF and Defense Logistics Agency (DLA), may be allowed on production of receipts issued by ISAF and DLA confirming that they have received the goods. The receipts shall be reconfirmed by the representatives of these agencies located in Pakistan.

    (8) Export of such goods as are made by or on behalf of United Nations High Commissioner for Refugees, World Food Programme, United Nation Development Programme, United Nations Population Fund, International Committee of the Red Cross, World Health Organization, Food and Agriculture Organization, United Nations International Children’s Emergency Fund against international tenders, as relief goods to Afghanistan, shall be allowed the facility of normal duty drawback against payment in convertible foreign currency, through all standard modes of payment including letters of credit, advance payment and documents acceptance (DA) or deferred payment basis (DP).

    (9) Normal duty drawback shall remain available on exports to the Central Asian Republics via Iran.

    (10) Export of acetic anhydride to Afghanistan shall not be allowed till further orders.

  • Salaried persons pay Rs129 billion in Tax Year 2020

    Salaried persons pay Rs129 billion in Tax Year 2020

    ISLAMABAD: Salaried persons have paid Rs129 billion as income tax at source during tax year 2020, which is 70 percent higher than the collection under this head during preceding year, according to official documents.

    The FBR had collected Rs76 billion as income tax from salaried persons during tax year 2019.

    The FBR officials attributed to significant increase in income tax collected at source form salaried person was due to change in tax slabs through Finance Act, 2019.

    It is interesting to note that the exempt income chargeable to tax was increased to Rs600,000 from Rs400,000 for salaried persons through Finance Act, 2019.

    However, tax rate for salaried persons falling in the higher salary bracket had been increased up to 35 percent through the Finance Act, 2019.

    The tax officials said that share of tax collection from salary has been increased to 11.9 percent in the total collection of withholding taxes during Tax Year 2020.

  • Sales tax collection from textile sector jumps six-fold

    Sales tax collection from textile sector jumps six-fold

    ISLAMABAD: The collection of sales tax from textile sector registered a six-fold increase in fiscal year 2019/2020 owing to elimination of zero-rated tax regime.

    According to official statistics released by Federal Board of Revenue (FBR) the sales tax collection from textile sectors sharply increased to Rs61.2 billion during fiscal year 2019/2020 as compared with Rs8.7 billion in the preceding fiscal year, showing a growth of 602 percent.

    The unprecedented growth in sales tax collection from this sector can be attributed to elimination of zero-rated scheme through Finance Act, 2019.

    In the budget 2019/2020, the government decided to eliminate zero-rating scheme for textile sector and imposed normal 17 percent sales tax on all supply of textile products, except for those subject to exports.

    The FBR issued Circular No. 01 of 2019 dated July 26, 2019 and explained that SRO 1125(I)/2011 dated December 12, 2011, relating to zero-rating of five export-oriented sectors, had been rescinded since July 01, 2019 through SRO 694(I)/2019 dated June 29, 2019.

    From July 01, 2019, the items listed in the said SRO had been charged to sales tax at 17 percent at import and local supply. However, in case of integrated retail outlets, sales tax on finished textile and leather items were subject to 14 percent sales tax, according to the circular.

    Further, all Sales Tax General Orders (STGOs) granting zero-rating on supply of electricity, gas, diesel, furnace oil and coal had been rescinded through STGO 100/2019 dated June 29, 2019.

    The decision to eliminate the zero-rating was taken due to gross misuse of the scheme. The scheme also attracted issuance of bogus refunds on back of fake and flying invoices resulting huge monetary losses to the national exchequer.

    However, in order to resolve the issue of exports in obtaining refunds under new schemes from July 01, 2019 the FBR introduced Fully Automated Sales Tax e-Refund (FASTER) system with a commitment that the refunds would be issued in 72 hours.

    Sources in the FBR said that the collection of sales tax from textile sector would have been much higher but it was restricted due to economic slowdown after COVID-19.

  • Tax to apply on sale of used cars only on value addition: FBR

    Tax to apply on sale of used cars only on value addition: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Saturday said that sales tax is applicable at 17 percent on sale of used cars only on value addition.

    Clarifying news reports regarding levying of 17 percent sales tax on resale of used and refurbished vehicles, the FBR said that the existing law charged sales tax on full sale value which was harsh and excessive.

    On the request of business community who are engaged in such business and after seeking support of major chambers of commerce of the country, a clause was added in the Finance Act to provide relief and to encourage refurbishing of second hand vehicles.

    This relief is available to only registered persons in sales tax and is restricted to 17 percent of value addition made by such players.

    No unregistered person can deduct or demand such sales tax from a buyer. It is further clarified that only rules have been finalized now.

  • FBR collects Rs100 billion as duty, taxes from imported cars

    FBR collects Rs100 billion as duty, taxes from imported cars

    ISLAMABAD: Federal Board of Revenue (FBR) has collected Rs100 billion as customs duty and sales tax on import of cars during fiscal year 2019/2020, according to official documents.

    The total revenue from imported cars fell by 31 percent to Rs100 billion during fiscal year 2019/2020 as against Rs144.5 billion in the preceding fiscal year.

    The fall in revenue collection from this head mainly attributed to restriction imposed by the government under which the clearance of imported cars has to be done through payment in foreign exchange and that should be verified by banks.

    Further, the global traveling restrictions following the spread of COVID-19 pandemic also hampered the revenue growth under this head.

    According to official statistics the FBR collected Rs57 billion as customs duty on imported cars during fiscal year 2019/2020 as against Rs81.5 billion in the preceding fiscal year, registering a decline of 30 percent.

    Similarly, the collection of sales tax on imported cars fell by 32 percent to Rs43 billion during fiscal year 2019/2020 as compared with Rs63 billion in the preceding fiscal year, showing a decrease of 32 percent.

    The country imported motor cars worth $99 million during fiscal year 2019/2020 as compared with $222 million in the preceding fiscal year, showing a decline of 55 percent, according to data released by Pakistan Bureau of Statistics (PBS).

  • FBR issues draft rules for settlement of tax cases

    FBR issues draft rules for settlement of tax cases

    ISLAMABAD: Federal Board of Revenue (FBR) has issued draft rules for settlement of tax cases through oversight committee.

    The FBR issued SRO 945(I)/2020 to notify draft rules for implementation of law of agreed assessment under Section 122D of Income Tax Ordinance, 2001.

    The Section 122D has been inserted to the Ordinance through Finance Act, 2020.

    The section allowed an opportunity where a taxpayer, in response to a notice under sub-section (9) of section 122, intends to settle his case, he may file offer of settlement in the prescribed form before the assessment oversight committee.

    According to the draft rules, a settlement application shall be made electronically by the applicant in person or by his authorized representative, under Section 122D for agreed assessment to the committee.

    A settlement application shall be preferred to the committee after the date of service of the notice under sub-section 9 of Section 122 of the Ordinance and before finalization of assessment.

    The commissioner shall not conclude assessment proceedings under Section 122 if an application, made against the notice issued under sub-section (9) of Section 122, lies pending before the committee.

    The committee after examination of the contents of an application submitted by an applicant and facts stated therein and on scrutiny of requisitioned record, if any, shall afford opportunity of being heard to the applicant in writing.

    The committee shall finalize the application filed under Section 122D of the Ordinance within thirty days of receipt of application or within an extended period of sixty days, for reasons to be recorded in writing by the committee.

  • No refund claim to stop at pre-processing stage: FBR

    No refund claim to stop at pre-processing stage: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Saturday said that it has launched an updated version of automated refund payment system and taxpayers will not face hurdles in processing their claims.

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  • Weekly Review: Turmoil in international markets likely to suppress domestic bourse

    Weekly Review: Turmoil in international markets likely to suppress domestic bourse

    KARACHI: The share market likely to remain under pressure due to turmoil in international markets, analysts said. Analysts at Arif Habib Limited said that with economic indicators continuing to show improvement, they expect the profit-taking to be short-lived.

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