Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Sales tax rates on services provided by goods transportation

    Sales tax rates on services provided by goods transportation

    KARACHI: Sindh Revenue Board (SRB) has issued updated working tariff for tax year 2020 and notified sales tax rates on services provided or rendered by persons engaged in inter-city transportation.

    According to the SRB, the sales tax shall be 13 percent on services provided or rendered by persons engaged in inter-city transportation or carriage of goods by road or through pipeline or conduit.

    However, this rate shall be reduced at 8 percent with the condition that input tax credit/adjustment shall not be admissible.

    The sales tax rate shall be 13 percent on services provided or rendered by persons engaged in inter-city transportation or carriage of goods by road through truck addas or through bus/wagon stands excluding road transportation or carriage of goods through addas or through bus/wagon stands excluding road transportation of

    (i) petroleum oils through oil tankers;

    (ii) automotive vehicles, classified under tariff headings of Chapter 87 of the First Schedule to the Customs Act, 1969, as are transported or carried through specialized vehicle carriers; and

    (iii) Goods and cargo through vehicles operated by Fleet Logistic Companies having not less than 25 vehicles in its fleet

    The reduced rate of three percent is allowed with condition that input tax credit shall not be admissible.

    These services are also exempt from sales tax on following:

    Services provided or rendered by persons engaged in inter-city transportation of goods by road during the period from July 01, 2014 to the June 30 ,2015, provided that :

    (a) Such person has neither billed /involved/ charged the service recipient any amount of tax nor collected or received any amount of tax from the service recipient on account of such transportation or carriage services as were provided during the said Period;

    Provided further that the amounts of tax billed or invoiced or charged or received or collected, if any, by the such person for the services provided or rendered during the period from the 1st July,2014 to the 30th June, 2015, are e-deposited in Sindh, Government’s head of account “B-02384” in the prescribed manner on or before the 15th day of July, 2015.

    (b) Such person gets e-registered with the SRB on or before 25th day of July, 2015, in accordance with the provisions of section 24 of the Act, read with the rules prescribed thereunder; and

    (c) this exemption shall not entitle any exemption benefit or any claim for refund of the amount of tax already deducted or withheld or paid or deposited by any person in relation to the services provided or rendered or received or procured during the period from 01st day of July, 2014 to the 30th day of June, 2015. Such amount shall be deemed to be the tax under section 16 of the Act and shall be e-deposited in Sindh Government head of account “B-02384” in the prescribed manner on before the 15th day of July, 2015, failing which it shall be recovered alongwith penalty and surcharge as prescribed in the Act.

  • Telenor, Jazz awarded Rs680 mn next generation broadband project

    Telenor, Jazz awarded Rs680 mn next generation broadband project

    ISLAMABAD: The Ministry of Information Technology on Wednesday approved award of contracts to Telenor and PMCL (Jazz) worth Rs680 Million in total for Kurram and Sanghar Lots.

    PMCL (Jazz) is being awarded the contract of Kurram Lot while Telenor is being awarded the contract of Sanghar Lot under Next Generation Broadband for Sustainable Development (NG-BSD) Programme.

    Federal Secretary Ministry of Information Technology and Telecommunication Shoaib Ahmad Siddiqui chaired 68th Board of Directors meeting of Universal Service Fund Company here on Wednesday.

    Chairman PTA Maj Gen (R) Amir Azeem Bajwa was also present in the meeting.

    This project is part of the inclusive approach of the Government and to strengthen the pillar of connectivity under Digital Pakistan.

    During the meeting Chairman USF Board and Secretary IT was apprised about the progress of USF projects. The Hi-speed Broadband services in Kurram Lot will benefit an unserved population of approximately 400,000 thereby covering 200 unserved muazas and an approximate unserved area of 2,900 sq. km.

    Kurram Lot encompasses Frontier Region Kurram, Lower Kurram and Upper Kurram tehsils. Similarly, an unserved population of approximately 1.4 million will gain advantage from Hi-speed Broadband services in Sanghar Lot.

    The Lot consists of Sanghar and Umerkot districts with an approximate unserved area of 12,000 sq. km and 500 unserved mauzas.

    The Chairman USF Board and Secretary IT, Shoaib Ahmad Siddiqui emphasized on connecting the people of Pakistan who did not have access to latest ICT facilities.

    He also said these projects will bring the people of Kurram and Sanghar at par with the wider society and helpful in solving the problems of illiteracy, poverty and unemployment.

    Furthermore, the Federal Secretary welcomed Prime Minister’s most recent expression of support for the continued and ongoing work of Digital Pakistan.

    He stressed the importance of the Ministry of IT and Telecom remaining closely engaged to support and encourage implementation of the vision.

    In addition to this, he also acknowledged other board members’ valuable contribution to make advancements in implementation of USF projects.

    The Board greatly appreciated Chairman USF Board and Secretary IT for providing guidance and wisdom to accomplish USF mission.

    Other board members comprising Shabahat Ali Shah, Executive Director, NITB; Ifran Wahab, CEO-Telenor Cluster Head for Emerging Asia and Nominee of Mobile Cellular Operators; Imran Akhtar Shah, VP for Government Sales, Super Net Pvt Ltd and Nominee of Data Licensees; Rashid Khan, CEO PTCL and Nominee of Fixed Line Operators; Kaukab Iqbal, Chairman, Consumer Association of Pakistan and Nominee of Consumer Group and management of USF Co. also attended the meeting.

  • Stock market ends down in mixed trading sessions

    Stock market ends down in mixed trading sessions

    KARACHI: The stock market ended down by 65 points on Wednesday in mixed trading sessions during the day. The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 42,561 points as against 42,626 points showing a decline of 65 points.

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  • Rupee gains eight paisas on export receipts inflows

    Rupee gains eight paisas on export receipts inflows

    KARACHI: The Pak Rupee gained eight paisas against dollar on Wednesday owing to improve inflows of export receipts, dealers said.

    The rupee ended Rs154.53 to the dollar from previous day’s closing of Rs154.61 in interbank foreign exchange market.

    The currency dealers said that the sufficient supply of dollars in market was seen during the day.

    They said that the market was also responded to improved economic conditions.

    The foreign currency market was initiated in the range of Rs154.57 and Rs154.60. The market recorded day high of Rs154.57 and low of Rs154.53 and closed at Rs154.53.

    The exchange rate in open market witnessed no change in rupee value. The buying and selling of dollar was recorded at Rs154.60/Rs154.90, the same previous day’s level, in cash ready market.

  • FBR estimates 2.77 million returns for tax year 2019 by January 31

    FBR estimates 2.77 million returns for tax year 2019 by January 31

    ISLAMABAD: Federal Board of Revenue (FBR) has estimated around 2.77 million income tax returns for tax year 2019 to be filed by January 31, 2020, sources said on Wednesday.

    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.

  • Voluntary tax system fails to generate revenue: FBR

    Voluntary tax system fails to generate revenue: FBR

    ISLAMABAD: Syed Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) has said that voluntary compliance failed to generate revenue.

    “The voluntary tax system has failed to deliver and such system cannot run on a sustained basis,” the chairman said on Tuesday while addressing All Pakistan Chambers Presidents Conclave.

    The chairman said that the existing taxation system as ‘extortionist’ and said the FBR was collecting 90 percent taxes in the shape of withholding taxes and deduction at source while only 5 – 10 percent was coming through voluntary compliance.

    He said that total wholesale and retail traders are contributing Rs 9 billion from all over the country. He further added that Sundar Industrial Estate, which is not exempted from registration of sales tax, is contributing ‘very negligible’ amount to the national kitty.

    Zaidi also pointed out that the FBR was collecting 45 percent on imports. He also added that the FBR cannot be fixed with sacking and transfers of officers but it will have to be automated to minimize human interaction as much as possible.

    The chairman said that the tax authority had so far collected Rs 2,085 billion in first half (July-December) of 2019-2020.

    He stated that the FBR is facing one major problem on customs side as there is still difference of $1.7 billion in bilateral trade figure, which shows that under-invoicing is still continuing that once stood in the range of $6 billion per annum.

    He said it is not possible for any human to check 8,000 containers daily so the solution is the installation of the latest scanners. “We need to place automation as there is no other solution,” he added.

    The chairman FBR said that there are four major sectors contributing to the country’s GDP growth and economy including manufacturing, agriculture, services and retail trade and wholesale.

    There should have been 25 percent burden on each of these four sectors but in Pakistan manufacturing sector is bearing this burden by contributing 70 percent to national kitty. This tax burden, he said, is resulting into de-industrialization.

    Ideally, he said the tax burden should have distributed equally on four major contributors of the GDP growth.

    He said that the government is the partner of 25 percent in the shape of collection of taxes from the private businesses.

  • Criminal proceeding initiated in sales tax refunds issuance on bogus invoices

    Criminal proceeding initiated in sales tax refunds issuance on bogus invoices

    KARACHI: Regional Tax Office (RTO)-II Karachi has initiated criminal proceeding against persons involved in obtaining sales tax refunds on fake and flying invoices.

    According to statement on Tuesday, the tax office had unearthed a gang of fraudsters who were engaged in tax fraud on the strength of bogus/fake/flying invoices and claimed dubious/bogus Rs230 million sales tax refunds.

    The declared business activity of the units does not match with the nature of goods/raw materials against which purchases / imports have been shown and subsequently bogus inputs have been claimed.

    As per chain inquiry, there were dummy buyers and only doing paper transactions.

    The RTO-II Karachi lodged FBR against units included: M/s Oriental Chemcial Industries; M/s. Premier Industries/Paramount Industries; M/s. Younus Enterprises/Escord Industries.

    The tax office said that the accused/owners of these bogus units were not available in the declared business address. However following measures were taken to retrieve loss of revenue by RTO-II Karachi:

    (a) FIRs have been lodged against the all three accused persons/owners before special judge (customs and taxation) Karachi and criminal proceedings have been initiated under Section 37A of the Sales Tax Act, 1990.

    (b) Names of owners of M/s. Oriental Chemical Industries, M/s. Paramount Industries and M/s. Escord Industries have been sent for Exit Control List (ECL).

    The tax office said that all the three cases had been suspended / blacklisted under Section 21(2) of the Sales Tax Act, 1990.

    It further said that the bank accounts have been attached for recover under Section 48 of the Sales Tax Act, 1990.

    “Letters to all banks have also been written for getting information about the beneficiary bank accounts, whereby, cheques issued as result of the generated RPOs were deposited.”

    Letters to registrar offices, Bahria Town and DHA Karachi have also been written to get information about properties/assets for recovery purpose.

  • Sales tax rate on services provided by laundries, dry cleaners

    Sales tax rate on services provided by laundries, dry cleaners

    KARACHI: Sindh Revenue Board (SRB) has issued updated working tariff for tax year 2020 and notified sales tax rate on services provided by laundries and dry cleaners.

    According to the working tariff the sales tax rate is 13 percent on services provided by laundering and dry cleaners.

    However, a reduced rate of five percent also allowed on services provided or rendered by stand-alone laundries and dry cleaners.

    Explanation: For the purpose of this notification, “Stand-alone laundries and dry cleaners” means a laundry and dry cleaner:-

    (a) which does not provide any taxable service other than the services described against tariff heading No. 9811.0000;and

    (b) which or any outlet/branch of which is not located with the building premises or precincts of a hotel, motel, guest house or club whose service are liable to tax.

    Input tax credit adjustment shall not be admissible against reduced rate of sales tax.

    The SRB also exempted the sales tax on services provided or rendered by laundries or dry cleaners for following categories:

    (a) laundries and dry cleaners located within the building premises and premises of a hotel, motel, guest house or club whose services are liable to tax;

    (b) laundries and dry cleaners which have franchisers or franchisees;

    (c) laundries and dry cleaners having any branch or more than one outlet in Sindh;

    (d) laundries and dry cleaners whose turnover exceeds 2.5 million rupees in a financial year; and

    (e) laundries and dry cleaners whose total utility (electric, gas and telephone) bills does not exceed Rs. 25,000/- in any month during a financial year.

  • Regulatory duty on cotton import withdrawn

    Regulatory duty on cotton import withdrawn

    ISLAMABAD: The government has withdrawn 3 percent regulatory duty on import of cotton, a notification said on Tuesday.

    Federal Board of Revenue (FBR) issued SRO 38(I)/2020 to withdraw 3 percent regulatory duty on import of cotton.

    Through SRO 949(I)/2019 the regulatory duty was imposed on import of cotton.

    The regulatory duty was imposed on August 22, 2019, after unfavorable weather conditions, particularly prolonged hot and dry weather conditions, coupled with massive attacks of whitefly, pink bollworm, and other pests/insects gave cotton crop heavy battering.

    Moreover, growers are increasingly losing interest in planting cotton because they are not getting any returns or profits as the production cost is rising and the market prices are falling.

    The latest withdrawal of regulatory duty was granted in pursuance to approval by Economic Coordination Committee (ECC) of Cabinet earlier this month.

    Last year on October 4, the Cotton Crop Assessment Committee projected that cotton production at the end of the year would be 10.20 million bales as against the target of 15 million bales for the fiscal year 2019-2020.

    In order to fill the gap, the commerce division had proposed duty-free import of cotton.

    But the ECC was informed that bulk of cotton would be lifted from local farmers by January 1 this year and the proposed exemption would not adversely affect the interests of local farmers.

    Both the commerce and national food divisions gave assurance that imported cotton would facilitate textile exports which are showing an upward trend.

  • Equity market sheds 121 points on selling in major scrips

    Equity market sheds 121 points on selling in major scrips

    KARACHI: The equity market lost 121 points on Tuesday owing to selling pressure seen in major scrips.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 42,626 points as against 42,748 points showing a decline of 121 points.

    Analysts at Arif Habib Limited said that the market continued facing downward pressure with the benchmark index slipping 409 points after registering an increase of 218 points earlier in the session.

    PSO, among oil & gas plays and FFBL, among Fertilizer, contributed positively to the index, however, selling in Cement, Steel, E&P and Refinery sectors faced selling pressure, whereas banking sector stocks saw price gains in MoC.

    Positive sentiment in HUBC and PSO was caused by the news of ECC allowing issuance of Energy Sukuk II, giving way to resolution of financial woes.

    Top volume leading sectors include Technology with 30.7 million shares, followed by Banks (23.4 million) and Fertilizer (18.6 million).

    Among scrips, TRG led the volumes with 17.4 million shares, followed by BYCO (11.2 million) and FFBL (9.8 million).

    Sectors contributing to the performance include Fertilizer (-139 points), Cement (-15 points), Inv Banks (+36 points), Power (+30 points) and Banks (+6 points).

    Volumes increased slightly to reach 177.6 million shares against 173.9 million shares (+2 percent DoD). Average traded value declined by 4 percent to reach US$ 44.1 million as against US$ 45.6 million.

    Stocks that contributed significantly to the volumes include TRG, BYCO, FFBL, WTL and EPCL, which formed 33 percent of total volumes.

    Stocks that contributed positively include DAWH (+33 points), HUBC (+27 points), MEBL (+9 points), UBL (+9 points) and PSO (+8 points).

    Stocks that contributed negatively include ENGRO (-88 points), EFERT (-35 points), FFC (-18 points), HBL (-9 points), and PPL (-8 points).