Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • Rupee weakens by 20 paisas on higher import payment demand

    Rupee weakens by 20 paisas on higher import payment demand

    KARACHI: The Pak Rupee ended down by 20 paisas against dollar on Friday due to high demand for import and corporate payments.

    The rupee ended Rs156.95 to the dollar as compared with last day’s closing of Rs156.75 in nterbank foreign exchange market.

    During the week the local currency maintained recovery trend against the greenback after hitting all time low of Rs164.05 on June 27. However, the higher demand on last trading day of the week the rupee weakened.

    The foreign currency market was initiated in the range of Rs156.50/Rs157.00. The market recorded day high of Rs157.50 and low of Rs156.75 and closed at Rs156.95.

    The exchange rate in the open market witnessed stability in the local currency.

    The buying and selling of dollar was recorded at Rs156.00/Rs157.00 the same previous days closing in cash ready market.

  • Finance Act 2019: FED imposed on all imported vehicles

    Finance Act 2019: FED imposed on all imported vehicles

    The federal government, under the Finance Act 2019, extended the application of Federal Excise Duty (FED) to all imported vehicles, aligning the tax regime with that of locally manufactured automobiles. This policy shift represents a significant move towards harmonizing the taxation framework across the domestic and import markets.

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  • Finance Act 2019: CNIC condition for sales tax invoices applicable from August 01

    Finance Act 2019: CNIC condition for sales tax invoices applicable from August 01

    KARACHI: The condition of obtaining CNIC number for unregistered persons at the time of supplies by registered person will be applicable from August 01, 2019.

    The condition has been proposed to be applicable from July 01, 2019 through Finance Bill 2019.

    However, through Finance Act, 2019 this condition now will be applicable from August 2019.

    An amendment has been introduced through Finance Bill 2019 to Section 23 of Sales Tax Act, 1990 under which it was now required specifically to mention particulars on invoices in Urdu or English language. Tax Invoice is also required to reflect CNIC Number of recipient in case supplies are made to unregistered person.

    The Finance Bill 2019 also proposed to require a supplier of textile yarn and fabric to mention count, denier and construction, in addition to description, on tax invoice at the time of making taxable supply.

    According to commentary on Finance Act, 2019 issued by PwC A F Ferguson Chartered Accountants NTN or CNIC are now required to be mentioned in tax invoice in respect of supply to unregistered persons.

    In the Finance Bill 2019, only CNIC was proposed to be mentioned on tax invoice.

    Further through Finance Act 2019, such requirements have been made effective from 1st August, 2019.

    However, an exception from such requirement has been introduced through the Finance Act for supplies made by a retailer where the transaction value inclusive of sales tax does not exceed rupees fifty thousand, if sale is being made to an ordinary consumer.

    The term ‘Ordinary Consumer’ has also been explained in the Finance Act as a person who is buying goods for his own consumption and not for the purpose of re-sale or processing. It has been further provided in the Finance Act that in case it is subsequently proved that CNIC provided by the purchaser was not correct, liability of tax or penalty shall not arise against the seller, in case of sale made in good faith.

  • Finance Act 2019: Capital gain tax on immovable properties exempted on holding period above 8 years

    Finance Act 2019: Capital gain tax on immovable properties exempted on holding period above 8 years

    KARACHI: The government has exempted the capital gain tax on immovable property where holding period is above eight years. The amendment has been brought through Finance Act, 2019 as it was proposed 10 years through Finance Bill 2019.

    According to commentary on Finance Act, 2019 by PwC A F Ferguson Chartered Accountants, prior to finance bill 2019, capital gains on disposal of immovable properties were taxable as a separate block of income at the rates specified in the First Schedule, determined on the basis of holding period of immovable property.

    The bill proposed to completely revamp the taxation of capital gains on disposal of immovable properties. It was proposed to tax gain on disposal of open plots as well as constructed properties at normal rates, subject to reduction in the amount of gain on the basis of holding period exceeding the specified thresholds.

    Through amended finance bill, the taxability of gain arising on disposal of immovable properties as separate block of income has been restored.

    However, the slab rates specified for such taxation are now based on the amount of gain, which are specified as under:

    1. Where the gain does not exceed Rs 5 million: 5 percent

    2. Where the gain exceeds Rs 5 million but does not exceed Rs 10 million: 10 percent

    3. Where the gain exceeds Rs 10 million but does not exceed Rs 15 million: 15 percent

    4. Where the gain exceeds Rs 15 million: 20 percent

    Further, the holding period of property for ascertaining capital gain has been reduced vis-à-vis that proposed in the finance bill as under:

    (a) For open plot of land, the gain chargeable to tax will be reduced by 25 percent if the holding period exceeds one year but does not exceed 8 years (as against 10 years proposed in the FB). Further, where the holding period exceeds 8 years (as against 10 years proposed in the FB), gain will be taken as zero.

    (b) For constructed properties, the gain chargeable to tax will be reduced by 25 percent if the holding period exceeds one year but does not exceed 4 years (as against 5 years proposed in the FB). Further, where the holding period exceeds 4 years (as against 5 years proposed in the FB), gain will be taken as zero.

  • US approaches WTO against India’s additional duty measures

    US approaches WTO against India’s additional duty measures

    ISLAMABAD: The United States has approached the World Trade Organization (WTO) for dispute consultations regarding additional duties imposed by India on various imported goods from the US.

    A statement issued by the WTO said that the US had requested WTO dispute consultations with India concerning additional duties applied by India on certain imports of US goods.

    The request was circulated to WTO members on July 04.

    The United States claims that the additional duties, which India imposed through a series of notifications issued between June 2018 and June 2019, are inconsistent with provisions of the WTO’s General Agreement on Tariffs and Trade (GATT 1994) by unfairly discriminating against US imports vis-à-vis those from other WTO members and by according less favourable treatment to US goods than that provided for in India’s schedule of concessions.

    The US authorities a day earlier submitted a request to the WTO for consultation with India with respect to India’s imposition of additional duties with respect to certain products originating in the United States.

    “India does not impose the additional duties measure on like products originating in the territory of any other WTO Member,” according to the US.

    India also appears to be applying rates of duty to US imports greater than the rates of duty set out in India’s schedule of concessions.

    The US submitted the legal instruments through which India imposes the additional duties measure include the following:

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 48/2018 – Customs, June 20, 2018;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 49/2018 – Customs, June 20, 2018;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 56/2018 – Customs, August 3, 2018;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 62/2018 – Customs, September 17, 2018;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 77/2018 – Customs, November 1, 2018;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 80/2018 – Customs, December 15, 2018;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 03/2019 – Customs, January 29, 2019;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 06/2019 – Customs, February 26, 2019;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 11/2019 – Customs, March 29, 2019;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 14/2019 – Customs, May 1, 2019;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 15/2019 – Customs, May 14, 2019;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 16/2019 – Customs, June 15, 2019;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 17/2019 – Customs, June 15, 2019;

    as well as any amendments, replacements, related measures or implementing measures.

    The additional duties measure appears to be inconsistent with: Article I:1 of the GATT 1994, because India fails to extend to products of the United States an advantage, favor, privilege or immunity granted by India with respect to customs duties and charges of any kind imposed on or in connection with the importation of products originating in the territory of other Members, and Article II:1(a) and (b) of the GATT 1994, because India accords less favorable treatment to products originating in the United States than that provided for in India’s schedule of concessions.

    The additional duties measure appears to nullify or impair the benefits accruing to the United States directly or indirectly under the GATT 1994.

  • Pakistan’s foreign exchange reserves increase to $14.443 billion

    Pakistan’s foreign exchange reserves increase to $14.443 billion

    KARACHI: The total foreign exchange reserves of Pakistan increased by $92 million to $14.443 billion by week ended June 28, 2019 as compared with $14.351 billion in the previous week, the State Bank of Pakistan (SBP) said on Thursday.

    The SBP said that during the week ending June 28, 2019, it received inflow of $500 million from Qatar as placement of funds. After taking into account outflows relating to external debt and other official payments, SBP reserves decreased by $9 million during the week, it added.

    The reserves held by commercial banks increased by $101 million to $7.17 billion as compared with $7.069 billion.

  • Karachi Chamber demands restoration of sales tax zero rating for export industries

    Karachi Chamber demands restoration of sales tax zero rating for export industries

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Thursday urged the government to restore sales tax zero-rating for export oriented industries as due to withdrawal of this scheme many industries have shut down their activities.

    KCCI President Junaid Esmail Makda in a statement expressed deep concerns over the worsening crises being faced by the industries across Pakistan after the withdrawal of zero-rated regime which has created a disastrous situation for the export-oriented industries and it was a matter of grave concerns that many industries, particularly the textile units and its allied industries have shut down their activities, rendering thousands of people completely jobless.

    He said that the industries have been compelled to pay to 17 to 20 percent sales tax after the withdrawal of zero rated regime, which has intensified the hardships for industrial units of all sizes as they face huge liquidity crisis and more importantly industry cannot borrow the loan from commercial banks at 14-15 percent interest rate which was not a feasible option.

    “If the situation is not timely addressed, we fear that the export-oriented industries will not be able to operate smoothly and they will die”, he added.

    Junaid Makda stressed that keeping in view the miseries being faced by the Industry, the government must reverse its decision to restore zero-rated regime for five export oriented industries while ample opportunity must also be provided to all the stakeholders to amicably settle this serious issue otherwise Pakistan exports, which comprise mostly of textile products, will go all the way down to zero.

    The poor performance of export-oriented industries was something which neither the government nor the business community could afford particularly at a time when Pakistan was struggling really hard to somehow maintain and improve its depleting foreign reserves.

  • Share market plunges despite IMF loan approval

    Share market plunges despite IMF loan approval

    KARACHI: The share market ended down on Thursday despite positive outcome of loan approval by IMF for Pakistan.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 34,570 points as against 34,897 points showing a decline of 326 points.

    Analysts at Arif Habib Limited said that ‘buy the rumor, sell the news’ proved true again today, when yesterday’s signing off of IMF loan Package to Pakistan led the index with positive 400 points earlier today, but soon the selling pressure kicked in and caused the index to plunge by -430 points by the end of session, closing the index with -326 points.

    Cement, Steel, Fertilizer contributed to declines, whereas key scrips in banking and Power sector remained positive.

    Similar to yesterday’s trading activity, Cement and Chemical Sectors led the volumes table with Cement ranking first (22 million) followed by Chemical (14 million). Among scrips, KEL topped the chart with 9M shares, followed by TRG (8 million).

    Sectors contributing to the performance include Cement (-73 points), E&P (-63 points), O&GMCs (-50 points), Fertilizer (-32 points) and Pharma (-30 points).

    Volumes declined from 130 million shares to 112 million shares (-14 percent DoD). Average traded value also declined by 9 percent to reach US$ 27.8 million as against US$ 30.5 million.

    Stocks that contributed significantly to the volumes include KEL, TRG, MLCF, LOTCHEM and UNITY, which formed 33 percent of total volumes.

    Stocks that contributed positively include HUBC (+22 points), HBL (+9 points), ENGRO (+5 points), IGIHL (+4 points) and INDU (+4 points). Stocks that contributed negatively include OGDC (-33 points), LUCK (-33 points), PPL (-24 points), PSO (-20 points) and SNGP (-19 points).

  • Rupee continues recovery against dollar on fourth consecutive trading sessions

    Rupee continues recovery against dollar on fourth consecutive trading sessions

    KARACHI: The Pak Rupee continued its recovery against dollar on Thursday amid approval of IMF loan program for Pakistan.

    PublishJuly 4, 2019 6:10 pm

    The rupee gained another Rs1.08 to end at Rs156.57 the dollar as compared with previous day’s closing of Rs157.65 interbank foreign exchange market.

    The rupee made gains for the fourth consecutive trading sessions after hitting all time low of Rs164.06 in interbank market on June 27, 2019.

    The foreign currency market was initiated in the range of Rs155.50 and Rs156.50. The market witnessed day high of Rs157.00 and low of Rs156.00 in interbank foreign exchange market.

    The exchange rate also witnessed rupee appreciation in open market. The buying and selling of dollar was recorded at Rs156.00/Rs157.00 from previous day’s closing of Rs156.50/Rs157.50.

  • Largest share offering: Hubco raises Rs7 billion through right shares

    Largest share offering: Hubco raises Rs7 billion through right shares

    KARACHI: The largest independent power producer of Pakistan, Hub Power Company Limited (HUBCO) has issued right shares and raised an amount of Rs7 billion from Pakistan Stock Exchange (PSX), a statement said on Thursday.

    The Right Share is priced at Rs50 per share and the company has issued 140 million shares, as decided by the Board of Directors of Hubco.

    Considering the size of the offering, the Right Issuance is viewed as one of the largest share offering in the history of PSX.

    The purpose of Rights Issuance is to raise funds which will be utilized to consolidate Hubco’s energy portfolio and increase its shareholding in China Power Hub Generation Company (CPHGC) from 26 percent to 47.5 percent”, said Khalid Mansoor, Chief Executive of Hubco. CPHGC is a joint venture between China Power International Holding Ltd (CPIH) and Hubco under which development, construction and operation of 2x660MW Imported Coal-Fired Power Plant is being funded by the two companies.

    Both the units of CPHGC have been synchronized with the National Grid and the Project is expected to start its commercial operations by August 2019. With the aim of “Fueling lives through Energy.”

    The Hub Power Company Limited currently produces over 1600 MW through its three plants located in Hub at Baluchistan, Narowal in Punjab and Mirpur in Azad Jammu & Kashmir, generating around 8 percent of the total power generation capacity in the country.

    The Company is the only power producer in Pakistan with four upcoming projects listed in the CPEC and currently under-construction namely imported coal-based China Power Hub Generation Company (Private) Limited (CPHGC) at Hub, Thar Energy Limited (TEL) and Thalnova Power Thar (Pvt.) Ltd. and Sindh Engro Coal Mining Company (SECMC) at Thar Block II. The power generation capacity of the Company will enhance to over 3580MW after completion of the aforementioned power projects.