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Author: Mrs. Anjum Shahnawaz

  • Stock market gains 311 points on improved rupee value

    Stock market gains 311 points on improved rupee value

    KARACHI: The stock market gained 311 points on Tuesday amid improvement in rupee value and signing of IMF loan program on July 03.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 34,307 points as against 33,996 points showing an increase of +311 points.

    Analysts at Arif Habib Limited said that despite the bearish outlook at the start of the day, courtesy high Rupee:USD parity, pending sign-off of IMF Loan package on July 3rd and increase in gas and electricity tariffs besides the protest of textile and cement processors / dealers.

    Two of the major macro economic indicators that positively impacted the market were decline in rupee:dollar parity as well as a lower reading of Inflation against street consensus.

    Overall, Cement, Refinery, E&P and steel sector performed well today. Power sector led the volumes table with 15 million shares, followed by Chemical (14 million). KEL topped the volumes with 13.5 million shares, followed by TRG (8 million) and LOTCHEM (7 million).

    Sectors contributing to the performance include Fertilizer (+84 points), Banks (+71 points), Cement (+40 points), E&P (+31 points) and Pharma (+23 points).

    Volumes increased from 48 million shares to 91.1 million shares (+90 percent DoD. Average traded value also increased by 74 percent to reach US$ 19.3 million as against US$ 11 million.

    Stocks that contributed significantly to the volumes include KEL, TRG, LOTCHEM, UNITY and MLCF, which formed 44 percent of total volumes.
    Stocks that contributed positively include FFC (+40 points), HBL (+34 points), NBP (+17 points), LUCK (+17 points) and MCB (+17 points).

    Stocks that contributed negatively include NESTLE (-24 points), MEBL (-6 points), PSMC (-3 points), THALL (-3 points) and SML (-2 points).

  • Rupee gains against dollar on positive IMF deal expectations

    Rupee gains against dollar on positive IMF deal expectations

    KARACHI: The Pak Rupee gained Rs1.99 against dollar on Tuesday owing to hopes of positive outcome of IMF board meeting on Pakistan loan program.

    The rupee ended Rs158.06 to the dollar from the closing of last trading day on June 28, 2019 at Rs160.05 in interbank foreign exchange market.

    The foreign currency market was initiated at Rs159.50 and Rs160.50. The market recorded day high of Rs159.75 and low of Rs157.50 and closed at Rs158.06.

    The exchange rate in open market also witnessed appreciation in value of the local unit.

    The buying and selling of dollar recorded at Rs156.50/Rs157.50 from last Saturday’s closing of Rs159.50/Rs161.00 in cash ready market.

  • FBR grants general relaxation to file tax year 2018 income returns up to August 02

    FBR grants general relaxation to file tax year 2018 income returns up to August 02

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday extended the date for filing income tax returns and wealth statement for tax year 2018 up to August 02, 2019 for all persons required to file their returns under Income Tax Ordinance, 2001.

    The FBR issued Circular No. 07 dated July 02, 2019 to grant extension for filing income tax returns

    A day earlier the FBR issued Circular No. 06 and allowed persons, who own immovable properties and motor vehicles above engine capacity 1000CC to file their income tax returns up to August 02, 2019.

    The FBR said that in continuation of Circular 06/2019 dated 01.07.2019, the other individuals/ AOPs and companies who were required to file their income tax returns/ statements for the Tax Year 2018 but have not filed, may avail the opportunity of filing of income tax return/ statement for the tax year 2018. Similarly, the individuals/ AOPs and companies who intend to revise the income tax return for the tax year 2018, may file revised income tax return/ statements till 02.08.2019.

    Accordingly, in exercise of the powers conferred under Section 214A of the Income Tax Ordinance, 2001, the Federal Board of Revenue is pleased to further extend the date of filing of Income Tax Returns/ Statements for the Tax Year 2018 for individuals/ AOPs and companies up to August 02, 2019.

  • FBR allows immovable property, motor vehicle owners to file tax year 2018 returns up to August 02

    FBR allows immovable property, motor vehicle owners to file tax year 2018 returns up to August 02

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday extended the date for filing income tax return and wealth statement for tax year 2018 up to August 2, 2019 for taxpayers, who own immovable properties and motor vehicles.

    The FBR issued Income Tax Circular No. 06 dated July 01, 2019 for extension in date of filing of income tax returns/ statements for tax year 2018.

    The FBR said that following persons are required to furnish a return of income for tax year in terms of Section 114(1)(b)(iii) to (vi) of the Income Tax Ordinance, 2001:

    (iii) Owns immovable properties with land area of two hundred and fifty square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory.

    (iv) Owns immovable property with a land area of five hundred square yards or more located in a rating area;

    (v) Owns a flat having covered area of two thousand square feet or more located in a rating area;

    (vi) Owns a motor vehicle having engine capacity above 1000CC;

    The FBR said that it is observed that some taxpayers falling under above conditions have not filed their income tax return/statement for the tax year 2018. “In order to facilitate the taxpayers falling under the above categories , they are hereby given an opportunity to file their income tax return/ statements.”

    The FBR further said that in order to facilitate it has been decided to extend the date of filing of income tax return/statements for the tax year 2018 up to August 02, 2019 for taxpayers of above mentioned categories.

  • Baggage Rules amended: passengers arriving, departing required to file customs declaration

    Baggage Rules amended: passengers arriving, departing required to file customs declaration

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday made mandatory the requirement of filing customs declaration for passengers, in case of accompanied baggage, at the time of arrival or departure.

    The FBR issued SRO 689 (I)/2019 to implement the amendments in Baggage Rules, 2006, which have been previously published through SRO 653(I)/2019 dated June 22, 2019.

    In the Baggage Rules, 2006 a new Rule 7A has been inserted, which stated: “In case of accompanied baggage, the passengers at the time of arrival or departure, shall file a customs declaration form as set out I n Appendix-C.”

    Under the Appendix-C, a passenger is required to provide particulars, included: name, gender, date of birth, passport number, nationality, country coming from/going to, country going to (if in transit), names of countries visited during last seven days, purpose of visit (persona, official, business, tourism), contact person/sponsor contact number in Pakistan and address in Pakistan.

    The passenger is required to make following declaration:

    Are you carrying any of the following goods?
    a. Prohibited / restricted goods such as Narcotics, Psychotropic substance, firearms, weapons, satellite phones etc?

    b. Gold jewelry, precious / semi-precious stones

    c. Foreign currency in US $ or equivalent

    d. Any other declaration to be made to Customs

    Passengers have been advised to inform to customs officers at the Red Channel if any of the above answer is in ‘Yes’.

  • FBR notifies new chapter for sales tax withholding rules

    FBR notifies new chapter for sales tax withholding rules

    ISLAMABAD: Federal Board of Revenue (FBR) has notified a new chapter for deduction and deposit of sales tax withholding on taxable goods and services.

    The rules shall apply from today or July 01, 2019.

    The FBR issued SRO 698(I)/2019 to amend Sales Tax Rules, 2006 to include Chapter XIV-D regarding withholding of sales tax by recipient of supply.

    Following is the text of rules notified by the FBR through the SRO.

    “150ZZH. Application.— (1) This chapter shall apply to taxable goods and services as are supplied to the withholding agents as specified in the Eleventh Schedule to the Act, for the purpose of deduction and deposit of sales tax persons registered as exporters.

    (2) This chapter shall also apply to services on which federal excise duty is payable in sales tax mode, and the ones specified in the Schedule to the Islamabad Capital Territory (Tax on Services) Ordinance, 2001 (XLII of 2001).

    (3) Withholding agent, in case of supplies to Federal or Provincial Government departments, includes the accounting office which is responsible for making payment against the purchases made by a government department.

    150ZZI. Responsibility of a withholding agent.--(1) The withholding agent, intending to make purchases of taxable goods, shall indicate in an advertisement or notice for this purpose that the sales tax to the extent as provided in this Chapter shall be deducted from the payment to be made to the supplier.

    (2) A withholding agent, other than a recipient of advertisement services, shall deduct an amount as specified in the Eleventh Schedule to the Act and make payment of the balance amount to him as per illustration given below,–

    ILLUSTRATION (in case 1/5th of sales tax amount is to be deducted)

    Value of taxable supplies excluding sales tax: Rs. 1000

    Sales tax chargeable @ 17%: Rs. 170

    Sales tax to be deducted by the withholding Agent: Rs. 34 (i.e. Rs. 170 / 5)

    Sales tax payable by the withholding agent to the supplier: Rs. 136 (i.e. Rs. 170-Rs.34)

    Balance amount payable to the supplier by the withholding agent: Rs. 1136 (i.e. Rs. 1000 + Rs.136)

    Provided that the withholding agent shall not be entitled to reclaim or deduct the amount of tax withheld from such persons as input tax.

    (3) A person who receives advertisement services, in case the sales tax amount is not indicated on the invoice received, he shall deduct sales tax at the applicable rate of the value of taxable services from the payment due to the service provider.

    (4) Where the purchases are made by a government department, the following procedure shall be observed, namely:–

    (a) the Drawing and Disbursing Officer (DDO) preparing the bill for the accounting office shall indicate the amount of sales tax withheld as illustrated above. The accounting office shall adopt the procedure as indicated below:

    (i) in case of purchases made by a department under the Federal Government, the office of the Accountant General of Pakistan Revenue shall account for the amount deducted at source during a month under the Head of Account “B02341-Sales Tax” and send an intimation to the Chief Commissioner, Regional Tax Office, Islamabad, by the 15th of the following month;

    (ii) in case of purchases by departments under provincial or district governments, the Accountant General of the province or the District Accounts Officer, as the case may be, shall credit the amount deducted at source during a month to the head of account “GI2777-Sales Tax Deductions at Source under rule 40 & 40A of Chapter Miscellaneous of Sales Tax (Withholding) Rules, 2007”. Cheque for the amount will be prepared by the Accountant General or the District Accounts Officer, as the case may be, in the name of Commissioner having jurisdiction by debit to the aforesaid head of account and sent to the Commissioner by the 15th of the following month; and

    (iii) where the purchases are made by the departments falling in purview of Military Accountant General, the MAG shall account for the amount deducted at source during a month under the Head of Account “B0234l-Sales Tax” and send intimation to the Chief Commissioner, Regional Tax Office, Rawalpindi, by the 15th of the following month. The amount so deducted at source shall be reported by MAG office to AGPR through civil exchange accounts; and

    (b) the concerned Drawing and Disbursement Officer shall prepare the return in the form as set out in STR-28 for each month and forward the same to the Commissioner having jurisdiction by the 15th of the following month.

    (5) In case of purchases, not covered by sub-rule (4) or sub-rule (6), the sales tax deducted at source shall be deposited by the withholding agent in the designated branch of National Bank of Pakistan under relevant head of account on sales tax return-cum-payment challan by 15th of the month following the month during which the purchase has been made. The return-cum-payment challan shall be prepared and deposited with the bank in triplicate and the bank shall send the original to the Commissioner of Sales Tax having jurisdiction, return the duplicate to the depositor and retain the triplicate for its own record:

    Provided that a single return-cum-challan can be filed in respect of all purchases for which the payment has been made in a month.

    (6) In case the withholding agent is also registered under the Sales Tax Act, 1990, or the Federal Excise Act, 2005, he shall deposit the withheld amount of sales tax along with return filed for the month in which the purchase was made in the manner as provided in Chapter II, along with other tax liability:

    Provided that in case the withholding agent is not registered for sales tax or federal excise duty but holds a national tax number assigned under the Income Tax Ordinance, 2001 (XLIX of 2001), he shall file the return, as set out in STR-28, electronically and deposit the amount deducted at source in the manner as provided for persons filing returns electronically under rule 18:

    Provided further that any other withholding agent may also opt to file the prescribed return electronically and deposit the deducted amount in the manner as provided in this sub-rule.

    (7) The withholding agent shall furnish to the Commissioner of Sales Tax having jurisdiction all such information or data as may be requested by him for carrying out the purposes of these rules.

    (8) A certificate showing deduction of sales tax shall be issued to the supplier by the withholding agent duly specifying the name and registration number of supplier, description of goods and the amount of sales tax deducted.

    150ZZJ. Responsibility of the registered supplier.— (I) The registered supplier shall issue sales tax invoice as stipulated in section 23 of the Sales Tax Act, 1990, in respect of every taxable supply made to a withholding agent.

    (2) The registered supplier shall file monthly return as prescribed in Chapter II, taking due credit of the sales tax deducted by the withholding agent, in the manner as prescribed in the return.

    150ZZK. Responsibility of the Commissioner.—(1) The Commissioner shall keep a list of all withholding agents falling in his jurisdiction and monitor payment of tax deducted by withholding agents falling in his jurisdiction and shall also ensure that the return prescribed under these rules is filed.

    (2) The Commissioner shall ensure that the return received from the bank is duly fed in the computerized system as referred to in clause (5AA) of section 2 of the Sales Tax Act, 1990.

    (3) The Commissioner shall periodically ensure that the suppliers mentioned in the return filed by the withholding agents, as fall under his jurisdiction, are filing returns under Chapter II, and are duly declaring the supplies made to withholding agents.

    150ZZL. Exclusions.-The provisions of this Chapter shall not apply to the supplies
    of the following goods and services if made by a registered person, namely:-

    (i) electrical energy;

    (ii) natural gas;

    (iii) petroleum products as supplied by petroleum production and exploration companies, oil refineries, oil marketing companies and dealers of motor spirit and high speed diesel];

    (iv) telecommunication services;

    (v) goods specified in the Third Schedule to the Sales Tax Act, 1990 (VII of 1990), and the goods on which federal excise duty is payable in sales tax mode on the basis of retail price;

    (vi) supplies made by commercial importers who paid value addition tax on such goods at the time of import as prescribed under Twelfth Schedule to the Act, and

    (vii) Supplies made by an active taxpayer as defined in the Sales Tax Act, 1990 to another registered person with the exception of advertisement services.”

    This Notification shall take effect on and from the 1st day of July, 2019.

  • FBR amends sales tax rules to implement automated registration system

    FBR amends sales tax rules to implement automated registration system

    ISLAMABAD: Federal Board of Revenue (FBR) has amended Sales Tax Rules 2006 to implement automated sales tax registration system.

    The FBR issued SRO 698(I)/2019 to amend Rule 5 of Sales Tax Rules, 2016. The amendment has been made in Rule 5 for sub-rule (2) to (9), the following shall be substituted, namely:

    “(2) The applicant having NTN or income tax registration shall, using his login credentials, upload following information and documents-

    (a) bank account certificate issued by the bank in the name of the business;

    (b) registration or consumer number with the gas and electricity supplier;

    (c) particulars of all branches in case of multiple branches at various locations;

    (d) GPS-tagged photographs of the business premises; and

    (e) in case of manufacturer, also the GPS-tagged photographs of machinery and industrial electricity or gas meter installed.

    (3) On furnishing above documents, the system shall register the applicant for sales tax.

    (4) After registration, the applicant or his authorized person shall visit e-Sahulat Centre of NADRA within a month for bio-metric verification. In case of failure to visit or failure of verification, the registered person’s name shall be taken off the sales tax Active Taxpayer List.

    (5) In case of manufacturer, the Board may require post-verification through field offices or a third party authorized by the Board.

    In case, the field office, during scrutiny after the registration, finds that any document provided is non-genuine or fake or wrong, it may request through the system, to provide the missing document, in fifteen days, failing which the registered person shall be taken off from the sales Active Taxpayer List, subject to approval of the Member (IR-Operations), FBR.”

    The automated sales tax registration will be applicable from July 01, 2019.

  • Amnesty scheme extended for three more days

    Amnesty scheme extended for three more days

    ISLAMABAD: The government has extended the date for tax amnesty scheme for three days on the same day when IMF board meeting to be held to discuss and approve Pakistan loan program.

    The Asset Declaration Scheme 2019 has been extended till July 03, this was announced by Advisor to the Prime Minister on Finance, Revenue and Economic Affairs Dr Abdul Hafeez Shaikh at press conference on Sunday.

    The advisor said that the scheme has been extended in view of huge interest of people to avail the scheme. He said that the scheme is available till the office hours on July 03, 2019.

    Sheikh urged the people to take benefit of the scheme in their own interest as the government had already established the ‘Benami Commission’, which was mandated to go after the Benami properties.

    The advisor said under the Benami law, there were heavy penalties and severe punishment for those holding Benami properties.

    He said that the asset declaration scheme had provided easy way out to declare the concealed and hidden assets.

    The advisor hoped that the International Monetary Fund (IMF) board would approve $6 billion extended fund facility for Pakistan.

    He said Pakistan would also get $3.4 billion from the Asian Development Bank (ADB), $2.1 billion of which was expected during the upcoming fiscal year (2019-20) while the country was also hopeful for assistance from the World Bank.

    He said since the external loans were provided on low interest rates comparatively, so they were cost-effective and did not create much trouble in repayments.

    The advisor enumerated five key areas that had been focus of the budget for the fiscal year 2019-20. Those included overcoming the external threat (current account deficit and trade deficit), taking austerity measures, protecting the vulnerable segments of society, protecting the interest of industrialists to help economic growth and mobilize revenue (Rs 5.5 trillion).

    He said the economy was facing crisis situation when the incumbent government took over. It had to face many challenges on external front in terms of current account deficit, trade deficit, and debts to the tune of Rs 31,000 billion, including foreign loans of $100 billion.

    In order to overcome the situation, tariff on imports, particularly luxury goods, was increased and same policy was carried out in the upcoming budget, he said, adding resultantly the current account deficit had reduced from $20 billion to $13.5 billion.
    He said the current account deficit would further be reduced to $7.5 billion during the upcoming year.

    The advisor said to overcome the economic challenges, the government mobilized about $9.2 billion in cash from China, Saudi Arabia and the United Arab Emirates.

    In addition, the $3.2 billion deferred payments facility agreement was signed with Saudi Arabia for oil imports. An agreement of $3 billion was also signed with Qatar, out of which $500 billion had been transferred.

    The government, he said, also took austerity measures to reduce its expenditures.

    He clarified that the government had to meet some compulsory expenditures as it had to spend Rs 2.9 trillion on debt repayment while 52 per cent of revenues would be transferred to the provinces under the Constitution while it was also bound to spend for the vulnerable segments.

    However, the government still reduced the expenditures by Rs 50 billion and did not increase the pays of government employees (1-16 grade) beyond 10 percent, and that of 17-20 grade employees by 5 percent and no raise for grade 20 and above employees.

    Moreover, the allowances of cabinet members had been cut by 10 percent, while the budget for PM House was also reduced.

    He said the funding for social protection programmes had been almost doubled from Rs100 billion to Rs191 billion.

    The advisor said in order to protect common people, the government had allocated Rs216 billion for providing subsidy to the consumers utilizing up to 300 electricity units while the neglected areas like the erstwhile FATA had been given special heed in the budget with allocation of Rs152 billion for their uplift.

    Despite financial difficulties, he said, the Public Sector Development Programme allocations had been enhanced form Rs575 to Rs925 billion and again the projects of neglected areas had been prioritized.

    He said the industries would be provided subsidized gas to help industrial growth that would help generate jobs. In addition, the import of around 1650 tariff lines had been zero-rated to make the country’s products compatible in international market, he added.

    He, however, clarified that there would be no tax on export-oriented products. If the same products were sold in local market, tax would be implemented.

    The advisor said it was matter of satisfaction that the process of democracy was moving ahead. Some 225 National Assembly members had delivered speeches during the budget session and the opposition was given more time as compared to the treasury benches.

    He said the finance bill was given proper consideration by the Senate, and its finance committee.

    He said the supplementary grants had been reduced to Rs220 billion from Rs600 billion last year, where the excess budget of seven years was also cleared.

    Replying to a question, Hammad Azhar said during the year 2019-20, the government would have to pay Rs 2.9 trillion on account of debt servicing while during the previous fiscal year (2018-19), it had retired principal external debt of $10 billion along with interest.

    He said the major thrust the budget was that the government had reduced taxes on inputs while increasing taxes on finished luxury goods.

  • IR officers posted to initiate proceedings in Benami cases

    IR officers posted to initiate proceedings in Benami cases

    ISLAMABAD: Federal Board of Revenue (FBR) has notified the names of members for adjudicating authorities under Benami law and posted officers of Inland Revenue to initiated proceedings in Benami cases.

    The following officers have been notified for the adjudicating authority under Benami Transactions (Prohibition) Act, 2017.

    1. Jamil Ahmad (Retired PAS/BS-22), Chairperson

    2. Muhammad Tanvir Akhtar (Retired IRS/BS-21), Member

    3. Khaqan Murtaza (PAS/BS-21), Member

    The FBR also transferred and posted following officer of Inland Revenue Service (IRS) to Benami Zones (I, II & III) established under Benami Transactions (Prohibition Act) 2017 are made with immediate effect and until further orders:

    1. Hassan Zulfiqar (IRS/BS-20) has been transferred from the post of Commissioner-IR (Appeals-I), Islamabad and posted as Commissioner-IR/ Approving Authority (Benami Zone-I)

    2. Muhammad Fiaz Hussain (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR, RTO, Islamabad and posted as Deputy Commissioner-IR/ Initiating Officer (Benami Zone-I)

    3. Hasham Khalid Malik (IRS/BS-17) has been transferred from the post of Assistant Commissioner-IR RTO, Islamabad and posted as Assistant Commissioner-IR/ Administrator (Benami Zone-I)

    4. Khalid Khan (IRS/BS-20) has been transferred from the post of Commissioner-IR (Zone-I), Corporate RTO, Lahore and posted as Commissioner-IR/ Approving Authority (Benami Zone-II)

    5. Salman Naveed (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR (BTB Zone), RTO-II, Lahore and posted as Deputy Commissioner-IR/ Initiating Officer (Benami Zone-II)

    6. Asim Raza (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR (BTB Zone), RTO-II, Lahore and posted as Deputy Commissioner-IR/ Initiating Officer (Benami Zone-II)

    7. Rudar Amjad (IRS/BS-17) has been transferred from the post of Assistant Commissioner-IR, Corporate RTO, Lahore and posted as Assistant Commissioner-IR/ Administrator (Benami Zone-II)

    8. Syed Shakil Ahmad (IRS/BS-20) has been transferred from the post of Commissioner-IR (Zone-II), LTU-II, Karachi and posted as Commissioner-IR/ Approving Authority (Benami Zone-III)

    9. Syed Bilal Mahmood Jafri (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR (BTB Zone), RTO-II, Karachi and posted as Deputy Commissioner-IR/ Initiating Officer (Benami Zone-III)

    10. Syed Mashkoor Ali (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR (BTB Zone), RTO-II, Karachi and posted as Deputy Commissioner-IR/
    Initiating Officer (Benami Zone-III)

    11. Razi Ul Haq Qureshi (IRS/BS-17) has been transferred from the post of Assistant Commissioner-IR, RTO-III, Karachi and posted as Assistant Commissioner-IR/Administrator (Benami Zone-III)

    The FBR said that the officers, who are drawing performance allowance prior to the issuance of this notification, shall continue to draw the said allowance on their upgraded posts.

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  • FBR issues uniform 17pc sales tax rates for petroleum products

    FBR issues uniform 17pc sales tax rates for petroleum products

    ISLAMABAD: Federal Board of Revenue (FBR) on Sunday issued uniformed sales tax rates for petroleum products effective from July 01, 2019.

    To implement the sales tax rates for petroleum products from July 01, 2019 the FBR issued SRO 700(I)/2019 on Sunday.

    In the earlier SRO 602(I)/2019 dated May 31, 2019, the FBR fixed the sales tax rate included: petrol 13 percent; high speed diesel oil, 13 percent; kerosene oil 17 percent; and light diesel oil at 17 percent.

    The FBR sources said that the sales tax rates have been increased on the two major products including petrol and high speed diesel oil, which are main revenue spinner.

    The FBR has been given Rs5,550 billion target for fiscal year 2019/2020, which is apparently an impossible target on the back of weak economic conditions and lower manufacturing output.