Author: Mrs. Anjum Shahnawaz

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.

June 30, 2019
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.
(more…)

June 30, 2019
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 notifies adjudicating authorities for Benami cases

June 30, 2019
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.

June 30, 2019
FBR notifies adjudicating authorities for Benami cases

ISLAMABAD: Federal Board of Revenue (FBR) has notified adjudication authorities for Benami cases with immediate effect. The adjudication authorities have been set up at Karachi, Lahore and Islamabad.

The FBR issued a notification on Saturday stating that consequent upon approval of the federal government and in pursuance of Section 6 of Benami Transactions (Prohibition Act) 2017, adjudication authorities are hereby established and notified at Karachi, Lahore and Islamabad with immediate effect.

Section 6 of the Benami Transactions (Prohibition Act) 2017 explained the adjudicating authority as:

01. The federal government shall, by notification, in the official gazette, appoint one or more adjudicating authorities to exercise jurisdiction, powers and authority conferred by or under this Act.

02. Adjudicating authority shall consist of a chairperson and at least two other members.

03. A person shall not be qualified for appointment as the chairperson or a member of the adjudicating authority, unless that person:

a. is or has been a member of the Inland Revenue Service and has held the post of Chief Commissioner Inland Revenue or equivalent post in that service; or

b. is or has been a member of any federal service and has held the post of additional secretary or equivalent post in that service.

The chairperson and the other members of the adjudicating authority shall be appointed by the federal government in such a manner as may be prescribed.

The federal government shall appoint the senior most member to be the chairperson of the adjudicating authority.

June 30, 2019
New values of steel products fixed for sales tax payment

ISLAMABAD: Federal Board of Revenue (FBR) has notified new valuations for steel products for the purpose of collecting sales tax from July 01, 2019.

The FBR on Saturday issued SRO 697(l)/2019 to fix the following values of locally produced goods specified in the Table below, for the purpose of payment of sales tax on ad valorem basis, at the rate as applicable to specified in sub-section (1) of section 3 of the Sales Tax Act, 1990.

1. Steel bars: Rs83,000 per metric ton

2. Steel Billets: Rs74,000 per metric ton

3. Steel Ingots/bala: Rs72,000 per metric ton

4. Ship plates: Rs72,000 per metric ton

5. Other re-rollable iron & steel scrap: Rs47,000 per metric tons

In case the value of supply of the goods specified in this notification is higher than the values fixed herein, the value of goods shall be the value at which the supply is made.

The FBR said that the SRO would take effect on and from the 1st day of July, 2019.

June 30, 2019
KTBA urges prime minister for extending amnesty scheme for one month

KARACHI: Tax practitioners of Karachi Tax Bar Association (KTBA) have urged Prime Minister of Pakistan Imran Khan to extend the last date for availing tax amnesty scheme to July 31, 2019 from existing June 30, 2019.

In a letter sent to Prime Minister Imran Khan on Saturday, the KTBA requested for extension of due date for filing of Assets Declaration Scheme 2019.

It said that the last date to avail the Assets Declaration Scheme 2019 (Amnesty Scheme 2019) is expiring in the next two days while there still lies innumerable cases of taxpayers who are yet to file their Amnesties but for the reason of paucity of time and extremely slow speed of the IRIS Software of the FBR.

The KTBA said that the Foreign Amnesty Scheme was launched by the government through an Ordinance on May 14, 2019 whereby a 47 days window was available to declare foreign and local assets and expenditure.

Though the Ordinance was promulgated on May 14, 2019 but the filing under the Scheme accelerated only after the launch of the online Citizen Profile on NADRA and Tax-Profile on FBR on its “Malumaat” application which took the public in general by surprise and after which considerable discomfort and anxiety echoed in the ranks, which resulted in the radical change in the perception of seriousness of the Amnesty drive by the FBR as was factually reflected by it.

However, since all these announcements were made only a few days before the June 30 which left very short time to fill in and to file the Amnesty even if someone genuinely wants to.

Had these announcement been made earlier, the desired level of momentum which is visible today could be seen earlier as well.

It is germane to mention here that the decision to upload the personal data of around 53 million citizens online was also taken without following a stakeholder process and is quite concerning among the public that also created panic on the way to avail the benefits of the scheme.

Further, FBR and the SBP’s delayed response on the clarifications for implementation of scheme like foreign currency remittance/accounts etc, is also delaying the process of declaration filing.

In view of the above it is requested to kindly give directions to the ministry to extend the date of filing of Amnesties till July 31, 2019.

June 30, 2019
FBR increases up to 28.34 percent retail value of CNG for sales tax collection

ISLAMABAD: Federal Board of Revenue (FBR) has enhanced the consumer value of CNG by 28.34 percent for collection of sales tax from July 01, 2019.

The FBR issued SRO 690(I)/2019 to notify the consumer value of CNG for the purpose of charging of sales tax from CNG stations by gas transmission and distribution companies.

The FBR increased the consumer value of CNG to Rs69.57 per kilogram for Region-I, which included Khyber Pakhtunkhwa, Baluchsitan and Potohar Region (Rawalpindi, Islamabad, and Gujar Khan. The increase in consumer value is around 7.36 percent for this region as compared with the previous rate of Rs64.80 per kilogram.

However, the FBR increased the consumer value of CNG by 28.34 percent for Region – II to Rs74.04 per kilogram from Rs57.69 per kilogram.

The Region – II is included: Sindh and Punjab excluding Potohar Region.

Large Taxpayers Unit (LTU) Karachi two years back presented a draft amendment, which stated:

“Notification in exercise of powers under subsection (8) of section 3 for value of supply of CNG to CNG consumers as per prevailing market price in the same way as it is being issued in case of sale of petroleum product every month.

“Board [FBR] may kindly issue the notification in exercise of powers under subsection (8) of section 3 for value of supply of CNG to CNG consumers as per prevailing market price in the same way as it is being issued in case of sale of petroleum products to avoid huge loss of monthly sales tax revenue.”

The LTU Karachi said that the Gas Transmission and Distribution Company charges sales tax from CNG stations @ 17 percent of the value of supply to the CNG consumers as notified by the Board from time to time in terms of section 3(8) of the Sales Tax Act, 1990.

Board accordingly vide its SRO No. 236(I)/2014 dated 31-03-2014, had notified the value of supply to the CNG consumers as the total value added cost of CNG as notified by the OGRA.

The latest notification issued by OGRA is dated 31.08.2015 which fixed the maximum CNG price as follows:

Region Value Added Cost GST

@ 17%
Maximum

CNG Sale Price

I 64.80 11.02 Rs. 75.82
II 57.69 9.81 Rs. 67.50

On 21-12-2016, OGRA deregulated the CNG sector in Pakistan, and directed the CNG station operators/associations to fix the rates themselves, as per market demand.

This caused in an instant increase in the rates of CNG which jumped from Rs. 67.50 per kg in the Southern Region to Rs.79 overnight.

However, the Gas distribution companies are charging sales tax on the previously issued notification of OGRA dated 31-08-2015.

As a result, the CNG stations are collecting sales tax on maximum CNG sales price at Rs79 per kg from the end consumers where as the Government is getting sales tax from the Gas distribution companies on maximum retail price at Rs67.50, incurring a loss of sales tax revenue of Rs1.67 per kg.

This loss of sales tax revenue of Rs.1.67 per kg is being collected from end consumers and pocketed by CNG stations.

CNG retail price per kg on which SSGC is collecting GST (Rs.) GST @ 17%(Rs) CNG prevailing market retail price (Rs) GST @ 17% (Rs) Loss in sales tax revenue per kg(Rs)
67.50 9.81 79.00 11.48 1.67

The per month loss to the government revenue comes to be Rs75 million only in the case of SSGCL as the average monthly sale of Gas to the CNG stations by SSGCL is 50 million kgs of gas.

Similarly the loss in case of SNGPL which caters more than three times of CNG stations is fairly high.

June 29, 2019
FBR restricts sale of duty free imported motor vehicles, machinery for Thar Coal Field

ISLAMABAD: Federal Board of Revenue (FBR) has imposed restriction on selling the duty free imported goods for machinery and motor vehicles for Thar coal field.

In order to impose restrictions the FBR on Saturday issued SRO 673(I)/2019 to amend SRO 268(I)/2015 dated April 02, 2015.

The FBR allowed exemption from whole of customs duty on import of coal mining equipment and machinery including vehicles for site use, if not manufactured locally, imported for Thar Coal Field.

Through the latest SRO, the FBR said that the goods shall not be sold or otherwise disposed of without prior approval of the FBR.

“In case such goods are sold or otherwise disposed of after ten years of importation thereof, the same shall be subject to payment of duties and taxes as prescribed by the FBR.”

In case these goods are sold or otherwise disposed of without prior approval of the FBR or before the period of ten years from the date of importation thereof, the same shall be subject to payment of statutory rates of duties and taxes as were applicable at the time of import.

“These goods shall, however, be allowed to be transferred to the other entitled projects of the sector, with prior approval of the FBR, subject to payment of duties and taxes, if applicable.”

The re-export of these goods may also be allowed subject to prior approval of the Chief Collector of Customs.

June 29, 2019
FBR imposes up to 7 percent additional customs duty

ISLAMABAD: Federal Board of Revenue (FBR) has imposed up to seven percent additional customs duty on items falling under tariff slab of 20 percent and higher slabs.

The FBR issued SRO 670(1)/2019 on Saturday stated that in supersession of its Notification No. SRO 630(1)/2018, dated the May 24, 2018, the federal government approved to levy additional customs duty on import of goods specified in the First Schedule to the said Act, at the rate of-

(i) two per cent on goods falling under tariff slabs of 0 percent, 3 percent and 11 percent;

(ii) four per cent on goods falling under tariff slab of 16 percent; and

(iii) Seven per cent on goods falling under tariff slab of 20 percent and higher slabs including slabs of specific rates.

The FBR said that the value of goods for purpose of this levy shall be the value as determined under section 25 or section 25A of the said Act.

The additional customs duty shall not be levied on the following, namely: –

(i) import of seeds and spores for sowing (PCT 0904.2120, 1006.1010,
1209.0000);

(ii) import under Chapter 31 of First Schedule of the Customs Act,1969
(IV of 1969);

(iii) import of goods classifiable under PCT codes, 52.01, 52.03, 9501.3000, 5503.1100, 5503.1900, 5503.3000, 5503.4000, 5503.9000, 5504.1000, 5504.9000, 5506.1000, 5506.3000, 5506.4000, 5506.9000 and 5507.0000;

(iv) import of goods classifiable under PCT codes 2902.3000, 2914.1200, 2915.1290, 2933.9990, 3202.1000, 3202.9010, 3202.9090, 3204.1100, 3204.1300, 3207.1090, 3208.1090, 3208.9090, 3403.9910, 3506.9110, 3506.9190, 3812.3900, 3906.9020, 4005.1090, 4005.9900, 8453.2000, 9606.2920 and 9606.2990;

(v) plant and machinery used in manufacturing or production of goods as is classifiable under Chapter 84 and 85 of the First Schedule to the Customs Act, 1969 (IV of 1969);

(vi) import under PCTs 8517.1211 and 8517.1219

(vii) import under Chapter 99 of First Schedule of the Customs Act, 1969

(IV of 1969);

(viii) import under Fifth Schedule to the Customs Act, 1969 (IV of 1969)
excluding;

(a) serial numbers 30, 32, 33 and 35 of table of Part-l,

(b) serial numbers 20 to 28, 30, 60, 96, 102, 108 to 118 of Table of Part Ill; and

(c) Serial numbers 29 to 51, 66 to 85, 109 to 115, 117 to 126, 128 to 155 and 157 to 169 of Table-A, Sr. No. 4 to 9, 11 to 14, 19 to 21 of Table-B and Sr. No.1 to 47 of Table-C of Part VII

(ix) import under the Baggage Rules, 2006;

(x) import under sub-chapters 3 and 7 of chapter XII and chapter XV of Customs Rules, 2001;

(xi) import under Notification No.SRO.577(I)/2005 dated 6th June, 2005;

(xii) import under Notification No.SRO.565(1)/2006 dated 5th June, 2006;

(xiii) import under Notification No.SRO.693(I)/2006 dated 1st July, 2006;

(xiv) import under Small and Medium Enterprises and Export Oriented Units Rules, 2008;

(xv) import under temporary importation scheme vide S.R.O. 492(1)/2009, dated the 13th June, 2009; and

(xvi) imports under condition (vii) of SRO 678(1)/2004, dated the 7th August, 2004, by the Exploration and Production Companies, their contractors and service companies for offshore projects only.

The FBR said that this notification shall take effect from July 1, 2019.

June 29, 2019

CNG retail price per kg on which SSGC is collecting GST (Rs.)	GST @ 17%(Rs)	CNG prevailing market retail price (Rs)	GST @ 17% (Rs)	Loss in sales tax revenue per kg(Rs)
67.50	9.81	79.00	11.48	1.67