Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • SRB suspends sales tax registration of Arabia Sea Country Club

    SRB suspends sales tax registration of Arabia Sea Country Club

    KARACHI: Sindh Revenue Board (SRB) has suspended sales tax registration of Arabian Sea Country Club for tax fraud.

    In a notice for suspension of registration of M/s. Arabia Sea Country Club, the SRB said that the taxpayer had collected the amount of tax on services provided but did not deposit to the provincial exchequer.

    The SRB said that the taxpayer provided services to M/s. Aisha Steel Mills Limited, M/s. Master Motors, M/s. Novartis Pharma (Pakistan) Limited, M/s. Naveena Steel Mills (Pvt) Limited, M/s. Yamaha Motor Pakistan (Pvt) Limited, M/s. L’oreal Pakistan Pvt Limited amounting to Rs11,615,885 involving Sindh sales tax of Rs1,510,067 for the tax period January 2019 to October 2019.

    “It is inform you that the aforesaid act of non-payment/short payment of Sindh sales tax is covered under the ‘tax fraud’ as defined under the provision of Section 2(94) of the Act, 2011.”

    The SRB has given deadline of January 28, 2020 to the taxpayer:

    To discharge all the due Sindh sales tax liability along with default surcharge; and

    To e-file the true and correct monthly Sales Tax return for the said tax periods.

    “In case of non-satisfactory response or failure to take remedial measures as suggested above on or before January 28, 2020, the case shall be processed for cancellation of registration.”

  • FBR not to compromise integrity of automated refund system

    FBR not to compromise integrity of automated refund system

    KARACHI: Federal Board of Revenue (FBR) has told the legislators that it will not compromise the integrity of automated sales tax refund system despite pressures from various quarters.

    The FBR made a presentation before the standing committee of National Assembly on Finance, Revenue and Economic Affairs on Thursday. The officials of Large Taxpayers Unit (LTU) Karachi explained in detail about the newly launched Fully Automated Sales Tax e-Refund (FASTER).

    The standing committee had asked the FBR to explain the automated sales tax refund system following hue and cry from the business community that their refunds under the newly launched system were stuck up and they were facing liquidity problems.

    The FBR officials informed the standing committee the automated system was fully transparent and all doors had been closed for issuance of refunds on fake and flying invoices.

    It was informed that in the last budget the zero rating of sales tax was abolished which was related to five export oriented sectors.

    After withdrawal of SRO 1125(I)/2011, the items in the SROs had become subject to normal sales tax at 17 percent on import and local supply.

    In this scenario all the inputs of exporters have become taxable which gave rise to refunds and liquidity issues.

    However, the government resolved the issue of sales tax refunds of exporters through introduction of FASTER system, which applied from July 01 onwards.

    It is informed that data provided in monthly returns is treated as data in support of refund claim and no separate electronic data is required. “The only requirement is filing of Annexure-H with 120 days of the filing of sales tax return.”

    After filing, the claim is routed through processing module FASTER. Refund claim data is verified by the system and Refund Payment Order (RPO) of the amount found admissible is generated.

    The FBR officials told that RPO was electronically communicated to the State Bank of Pakistan within 72 hours.

    The standing committee was informed that refund claims, which were not verified through validation checks, are processed under STARR.

    In order to resolve issues related to FASTER system, the FBR deputed focal persons in all field formations. Besides, chief automation and PRAL team is available through cell phones/ helpline to assist taxpayers.

    Further, filing date of annexure – H has been extended up to February 15, 2020.

    After the launch of FASTER system the issuance of refund payment registered unprecedented growth of 165 percent. According to the briefing the FBR released Rs36.82 billion during July 01- January 21 2019/2020 as compared with Rs13.9 billion in the corresponding period of the last fiscal year.

    The issuance of refunds by LTU Karachi registered phenomenal growth of 317 percent to Rs7.89 billion during July 01 – January 21 2019/2020 as compared with Rs1.89 billion in the corresponding period of the last year.

  • Income above Rs400,000 must file annual return: FBR

    Income above Rs400,000 must file annual return: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday said that individuals having income above Rs400,000 must file their income tax return for tax year 2019.

    The FBR issued advice as one week remaining for due date the filing income tax return for tax year 2019.

    The FBR urged people to file their annual income tax returns for documentation of economy and become active taxpayers.

    The revenue body said that salaried persons have been facilitated in return filing through ‘Tax Asaan’ smart phone application.

    It further said that the taxpayers have been facilitate in tax payment through ATM, Internet banking, debit card and direct debt from bank account.

    The FBR reminded that the last date for filing income tax return for tax year 2019 is January 31, 2019.

    The FBR has estimated around 2.77 million income tax returns for tax year 2019 to be filed by January 31, 2020.

    The FBR extended the date for filing income tax returns for tax year 2019 up to January 31, 2020 for all type of taxpayers.

    The FBR received around 2.17 million income tax returns for tax year 2019 by December 31, 2019.

    Syed Shabbar Zaidi, Chairman, FBR in his meeting with Finance Advisor Dr. Abdul Hafeez Shaikh disclosed that the FBR had received 2.17 million income tax returns for tax year 2019. While another 600,000 returns likely to be received by extended date i.e. January 31, 2020.

    The actual return filing date for tax year 2019 was September 30, 2019 for taxpayers including salaried persons, business individuals, persons falling in final tax regimes and companies having special tax year.

    While, for corporate taxpayers the last date for filing income tax returns was December 31, 2019.

    The FBR extended return filing date for other than corporate taxpayers around five times up to January 31, 2020. The FBR also extended the last date for corporate taxpayers up to January 31, 2020.

    The FBR is expecting around 3.5 million income tax returns for tax year 2019, which may be filed after due date but with payment of fine and penalties.

    Through Tenth Schedule of Income Tax Ordinance, 2001 the benefit of reduced withholding tax rates can only be availed by persons on the Active Taxpayers List (ATL).

    Those persons failed to file their income tax returns by due date and file their returns after due date without payment of fine will not be able to find their place on the ATL.

    The FBR will issue ATL for tax year 2019 on March 01, 2020.

    The number of income tax return has increased to 2.7 million for tax year 2018. The ATL for tax year 2018 will expire on February 29, 2020.

  • Insurance agents liable to pay 13% sales tax on services

    Insurance agents liable to pay 13% sales tax on services

    KARACHI: Sindh Revenue Board (SRB) has said that insurance agents are liable to pay 13 percent sales tax on services provided or rendered to their clients.

    The SRB issued updated working tariff for tax year 2020 and notified sales tax rate for various services. According to the working tariff the insurance agents are liable to pay 13 percent sales tax on services provided or rendered.

    However, a reduced rate of five percent is available to insurance agents with condition that input tax credit shall not be admissible.

    The SBR also notified sales tax rate for other services such as electric power transmission services liable to 13 percent sales tax on services.

    The provincial revenue body said that vehicle parking and valet services liable to 13 percent sales tax on services. However, a reduced rate of five percent also available with condition that input tax credit shall not be admissible.

    The rate of 13 percent sales tax applicable on: actuarial services; services of mining of mineral and allied and ancillary services in relation thereto; site preparation and clearance, excavation and earth moving and demolition services; waste collection and management services; warehouse or depots for storage or cold storages; supply chain management or distribution, including delivery) services.

    The services provided or rendered by cab aggregator and the services provided or rendered by the owners of drivers of the vehicles using the can aggregator services are liable to 13 percent sales tax. A reduced rate of 5 percent of such services is also available with condition that the input tax credit shall not be admissible.

  • Foreign exchange reserves increase to $18.271 billion

    Foreign exchange reserves increase to $18.271 billion

    Pakistan’s liquid foreign exchange reserves saw a notable increase of $148 million, reaching a total of $18.271 billion by the week ending January 17, 2020, according to a statement released by the State Bank of Pakistan (SBP) on Thursday.

    (more…)
  • Stock market ends down by 54 points in selling activities

    Stock market ends down by 54 points in selling activities

    KARACHI: The stock market declined by 54 points on Thursday amid selling pressure in various scrips. The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 42,507 points as against 42,561 points showing a decline of 54 points.

    Analysts at Arif Habib Limited said that the market traded in the range of -122 points and +345 points, closing the session at -54 points.

    Cement Sector stocks performed well on the expectation of rate hike in North and meeting among Cement manufacturers, however, later during the session the expectation did not materialize which resulted in Cement stocks losing price gains made earlier.

    OGDC, which rebounded from yesterday’s lower circuit, maintained the position but closed red. Decline in international crude prices caused investors to stay cautious on Oil & Gas chain and therefore OMCs and Refineries faced selling pressure.

    Cement sector led the volumes with 79.3 million shares, followed by Technology (34.9 million) and Banks (21.8 million). Among scrips, MLCF realized volumes of 27.5 million, followed by WTL (16.5 million) and FCCL (13.6 million).

    Sectors contributing to the performance include Chemical (+14 points), Banks (+9 points), Tobacco (-32 points), Power (-14 points), Autos (-14 points), E&P (-11 points) and O&GMCs (-11 points).

    Volumes increased from 178 million shares to 230.8 million shares (+30 percent DoD). Average traded value increased by 5 percent to reach US$ 63.2 million as against US$ 60.1 million.

    Stocks that contributed significantly to the volumes include MLCF, WTL, FCCL, DGKC and BOP, which formed 36 percent of total volumes.

    Stocks that contributed positively include HBL (+24 points), COLG (+17 points), EFERT (+9 points), BAFL (+7 points) and SRVI (+7 points). Stocks that contributed negatively include PAKT (-32 points), LUCK (-14 points), HUBC (-13 points), OGDC (-12 points), and HMB (-11 points).

  • Rupee depreciates by 9 paisas on import payment demand

    Rupee depreciates by 9 paisas on import payment demand

    KARACHI: The Pak Rupee depreciated by nine paisas on Wednesday owing to demand for import and corporate payments.

    The rupee ended Rs154.62 to the dollar from previous day’s closing of Rs154.53 in interbank foreign exchange market.

    Currency dealers said that the market witnessed buying activities in foreign currency from importers and corporate buyers.

    The foreign currency market initiated in the range of Rs154.52 and Rs154.55. The market recorded day high of Rs154.63 and low of Rs154.55 and closed at Rs154.62.

    The exchange rate in open market however witnessed appreciation in rupee value. The buying and selling of the dollar was recorded at Rs154.50/Rs154.80 from previous day’s closing of Rs154.60/Rs154.90 in cash ready market.

  • Atlas Honda reports 73% decline in after tax profit

    Atlas Honda reports 73% decline in after tax profit

    KARACHI: The manufacturer of Honda Cars in Pakistan has reported 73 percent decline in profit for the period (April-December) 2019.

    According to financial results of the company shared with Pakistan Stock Exchange (PSX) on Thursday the company declared profit after tax to the tune of Rs710 million during the period as compared with Rs2.68 billion in April – December 2018.

    The company also declared loss of Rs41.25 million for the quarter ended October – December 2019 as compared with profit of Rs601.59 million in the same quarter of the last year.

    According to financial results for the third quarter ended December 31, 2019, Honda Atlas Cars (Pakistan) Limited reported massive fall of 54 percent in its sales for the period.

    The car sales of the company fell to Rs9.86 billion during October – December 2019 as compared with Rs21.29 billion in the corresponding period of the last year.

    The domestic car industry is witnessing sharp slumps in sales due to various reasons including significant depreciation of Pak Rupee, increase in prices and high cost of manufacturing.

    The gross profit of the company also fell to Rs646.29 million during the quarter under review as compared with Rs1.63 billion in the same period of the last year.

  • Policy rate likely unchanged on high inflation

    Policy rate likely unchanged on high inflation

    KARACHI: The State Bank of Pakistan (SBP) is likely to keep the policy rate unchanged due to the recent surge in inflation, analysts said on Thursday.

    Analysts at Arif Habib Limited expect inflation to remain elevated in upcoming months on account of regular adjustment in electricity price (fuel cost adjustment and base tariff hike), another round of gas price increase, increase in prices of petroleum products, and continuous surge in prices of perishable and non-perishable food items.

    On the monetary policy front, they maintain a status quo stance on the upcoming Monetary Policy Statement (MPS) scheduled on 28th Jan’20, with no change expected in interest rate (policy rate to be maintained at 13.25%) as they believe the surge in inflation is due to supply disruptions of key commodities and this might settle down in coming months. We expect inflation to start declining from March 2020 to 11.5% due to the high base effect. After considering forecasted inflation, we expect rate cuts to begin from March 2020.

    They expect January 2020 inflation to settle at 13.58% YoY compared to 5.6% in Jan’19 and 12.63% in December 19, respectively.

    The YoY uptick in CPI is expected on the back of i) increase in prices of non-perishable products including Pulse Moong, Chicken, Pulse Gram, Eggs, Gur and Wheat Flour, ii) increase expected in quarterly house rent index by 1.5%, and iii) increase in prices of petroleum products.

    Whereas a decline in prices of perishable items is expected to keep the inflation restrained. This will take the 7MFY20 average inflation to 11.46% compared to 5.9% in 7MFY19. On a yearly basis, an increase in inflation will likely be led by Food (+21% YoY), Transport (+15.4%YoY), Alcoholic Beverages & Tobacco (+14.6% YoY), and House Hold Equipment (+12.9%).

    On a MoM basis, CPI reading is expected to increase by 1.20% attributable to surge in House Hold Equipment index (+2.4% MoM), Housing Index (+1.7% MoM), Food index (+1.4% MoM) and Transport Index (+1.4% MoM).

    As per three weeks Sensitive Price Index (SPI) data published by the Pakistan Bureau of Statistics (PBS), average prices of Pulse Moong, Chicken, Pulse Gram, Eggs, Gur and Wheat Flour are expected to register a jump of 15%, 13%, 13%, 11%, 8% and 5% MoM, respectively.

    On the other hand, meagre decline in prices of essential food items like Onions (-15% MoM), and Tomatoes (-5% MoM) are expected to keep the food index contained.

  • CNIC is must on purchases above Rs50,000 from Feb 01

    CNIC is must on purchases above Rs50,000 from Feb 01

    ISLAMABAD: The mandatory requirement of Computerized National Identity Card (CNIC) on purchases of above Rs50,000 to apply from February 01, 2020.

    Sources in Federal Board of Revenue (FBR) on Wednesday said that the condition of CNIC on purchases above Rs50,000 will be applicable from February 01, 2020.

    The FBR will take legal action against those who violate the mandatory requirement, they added.

    Through Finance Act, 2019, it was made mandatory that a registered person making a taxable supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars, in Urdu or English language, namely: –

    (a) name, address and registration number of the supplier;

    (b) name, address and registration, number of the recipient and NIC or NTN of the unregistered person, as the case may be, excluding supplies made by a retailer where the transaction value inclusive of sales tax amount does not exceed rupees fifty thousand, if sale is being made to an ordinary consumer.

    Explanation. – For the purpose of this clause, ordinary consumer means a person who is buying the goods for his own consumption and not for the purpose of re-sale or processing.

    The condition of CNIC or NTN was made mandatory from August 01, 2019.

    However, on opposition from small traders the government after an agreement on October 30, 2019, postponed the applicability of CNIC till January 31, 2020.

    The FBR on October 04, 2019 issued definition / rules related to condition of CNIC.

    The FBR said that keeping in view the problems reported by the registered persons is ensuring proper identity of the buyer to fulfil the requirement of reporting NTN/NIC of the buyer in terms of section 23 of the Sales Tax Act, 1990, it is directed that the NIC/NTN of the buyer with respect to taxable supplies to an unregistered person shall be deemed to have been reported in good faith by the supplier provided that:

    (a) The tax invoice complies with the requirements of section 23(b) of the Act.

    (b) Payment made by or on behalf of the unregistered purchaser of the amount of the tax invoice, inclusive of sales tax and applicable further tax, is deposited into the supplier’s declared business bank account.

    (c) The NIC provided by the purchaser is found authenticated by the National Data and Registration Authority (NADRA).

    (d) The NIC/NTN provided is not of the employee of the seller or of his associates as defined under the Income Tax Ordinance, 2001.

    The issuance of a show cause notice to a registered person being a seller on account of any matter arising out of the NIC provided by a purchaser shall not be made without the prior approval of the Member (IR-Operations), FBR after providing an opportunity to be heard.