Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • 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that SRO 1125(I)/2011 dated December 12, 2011, relating to zero-rating of five export-oriented sectors, had been rescinded since July 01, 2019 through SRO 694(I)/2019 dated June 29, 2019.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Tax General Orders (STGOs) granting zero-rating on supply of electricity, gas, diesel, furnace oil and coal had been rescinded through STGO 100/2019 dated June 29, 2019.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.

    (more…)
  • 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.

    (more…)
  • FBR’s collection grows by 4.68pc amid record first quarter collection

    FBR’s collection grows by 4.68pc amid record first quarter collection

    ISLAMABAD: Federal Board of Revenue (FBR) has posted 4.68 percent growth in revenue collection during first quarter (July – September) of the current fiscal year despite the fact for the first time the FBR achieved Rs1 trillion collection mark in a quarter.

    (more…)
  • Headline inflation increases by 9 percent in September

    Headline inflation increases by 9 percent in September

    ISLAMABAD: The headline inflation based on Consumer Price Index (CPI) increased by 9.0 percent on year-on-year basis in September 2020 as compared to an increase of 8.2 percent in the previous month and 11.4 percent in September 2019, Pakistan Bureau of Statistics (PBS) said on Friday.

    On month-on-month basis, it increased by 1.5 percent in September 2020 as compared to an increase of 0.6 percent in the previous month and an increase of 0.8 percent in September 2019.

    CPI inflation Urban, increased by 7.7 percent on year-on-year basis in September 2020 as compared to an increase of 7.1 percent in the previous month and 11.6 percent in September 2019. On month-on-month basis, it increased by 1.3 percent in September 2020 as compared to an increase of 0.8 percent in the previous month and an increase of 0.7 percent in September 2019.

    CPI inflation Rural, increased by 11.1  percent on year-on-year basis in September 2020 as compared to an increase of 9.9 percent in the previous month and 11.1 percent in September 2019. On month-on-month basis, it increased by 2.0  percent in September 2020 as compared to an increase of 0.4 percent in the previous month and an increase of 0.8 percent in September 2019.

    Sensitive Price Indicator (SPI) inflation on YoY increased by 12.0 percent in September 2020 as compared to an increase of 11.7 percent a month earlier and an increase of 14.7 percent in September 2019. On MoM basis, it increased by 2.1 percent in September 2020 as compared to an increase of 0.9 percent a month earlier and an increase of 1.9 percent in September 2019.

    Wholesale Price Index (WPI) inflation on YoY basis increased by 4.3 percent in September 2020 as compared to an increase of 3.3 percent a month earlier and an increase of 15.9 percent in September 2019. WPI inflation on MoM basis increased by 1.0 percent in September 2020 as compared to a decrease of 1.3 percent a month earlier and an increase of 0.1 percent in corresponding month of last year i.e. September 2019.

  • Policy for import of bullet proof vehicles unveiled

    Policy for import of bullet proof vehicles unveiled

    ISLAMABAD: The ministry of commerce has unveiled policy for import of bullet proof vehicles both in new and used condition.

    The ministry issued SRO 902(I)/2020 dated September 25, 2020 to notify Import Policy Order, 2020 and explained the requirement for import of bullet proof vehicles.

    The bullet proof vehicles are importable on the recommendation of Ministry of Interior subject to following conditions:

    (i) Requests for import of bullet proof vehicles are routed through concerned Provincial Government, which will determine the genuineness of the requirements of the applicant;

    (ii) The applicant will clearly indicate the features of the vehicle proposed to be imported by him;

    (iii) Undertaking be obtained from the applicant that he will ply the vehicle only in high security risk areas; and

    (iv) The vehicle will only be disposed of after obtaining NOC from Ministry of Interior.

    (v) The same conditions and procedures mentioned above shall apply mutatis mutandis, if bullet proof vehicles are imported under Personal Baggage, gift and Transfer of Residence Schemes.

  • Stock markets decline by 606 points on political uncertainty, coronavirus

    Stock markets decline by 606 points on political uncertainty, coronavirus

    KARACHI: The stock market fell by 606 points on Friday owing to political uncertainty and spread of coronavirus.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,070 points as against 40,677 points showing a decline of 606 points.

    Analysts at Arif Habib Limited said that the market saw continuation of selling pressure for a host of reasons from political uncertainty to spread of Corona cases (with the latest affectee being President Trump himself).

    The index lost a total of 771 points during the session and closed the session -606 points. International crude oil prices dropped significantly, especially after announcement of President Trump’s being tested positive for Corona.

    This caused selling in local E&P stocks, OGDC, PPL and POL. At the same time, redemptions in Mutual Funds prompted institutional sell-off as well.

    Volumes remained heavily tilted in favour of O&GMCs, particularly HASCOL, however, the stock price saw lower circuit among other tech stocks that saw sky high prices in the previous run-up. HASCOL topped the volumes with 52.6 million shares, followed by KEL (35.1 million) and TRG (24.6 million).

    Sectors contributing to the performance include E&P (-135 points), O&GMCs (-78 points), Banks (-71 points), Cement (-57 points) and Technology (-55 points).

    Volumes declined further from 371.8 million shares to 348.6 million shares (-6 percent DoD). Average traded value also declined by 0.6 percent to reach US$ 75.6 million as against US$ 76 million.

    Stocks that contributed significantly to the volumes include HASCOL, KEL, TRG, UNITY and PIBTL, which formed 44 percent of total volumes.

    Stocks that contributed positively to the index include HUBC (+16 points), BAHL (+16 points), ILP (+4 points), HCAR (+4 points) and AGIL (+3 points). Stocks that contributed negatively include PPL (-51 points), OGDC (-45 points), TRG (-36 points), POL (-33 points) and PSO (-30 points).