The central bank issued a circular to relax the conditions.
The SBP through Foreign Exchange Circular No. 07 dated August 05, 2021 in terms of which SBP notified revision of Chapter 14 of Foreign Exchange Manual.
“Based on representations received from various stakeholders and to facilitate Afghan Transit Trade in current circumstances, it has been decided to defer the following requirements until March 31, 2022:
“Submission of proceed realization certificate for freight and container detention charges in respect of consignment of Afghan Transit Trade as mentioned in Para 4((i(n)) & 4A((ii(g)), Chapter 14 of Foreign Exchange Manual.
“Maintaining separate PKR account by shipping companies/agents for accepting container detention charges as mentioned in Para 4A(i), Chapter 14 of Foreign Exchange Manual.”
The banks have been advised to bring the above developments to the notice of all their constituents for meticulous compliance.
ISLAMABAD: The Federal Board of Revenue (FBR) may impose up to Rs3 million as a monetary penalty upon persons for failure to integrate their businesses with the online system under Sales Tax Act, 1990.
Serial No. 25A has been added to Section 33 of the Sales Tax Act, 1990 to prescribe penalty for non-integration of businesses under the sales tax regime.
Text of the newly added Serial No. 25A of the Section 33 is:
25A. A person required to integrate his business as stipulated under sub-section (9A) of section 3, who fails to get himself registered under the Sales Tax Act,1990 and if registered, fails to integrate in the manner as required under the law and rules made thereunder.
Such person shall be liable to pay
(i) penalty of five hundred thousand rupees for first default;
(ii) penalty of one million rupees for second default after fifteen days of order for first default;
(iii) penalty of two million rupees for third default after fifteen days of order for second default;
(iv) penalty of three million rupees for fourth default after fifteen days of order for third default:
Provided that if such person fails to integrate his business within fifteen days of imposition of penalty for fourth default, his business premises shall be sealed till such time he integrates his business in the manner as stipulated under sub-section (9A) of section 3:
Provided further that if the retailer integrates his business with the Board [FBR]’s computerized system before imposition of penalty for second default, penalty for first default shall be waived by the Commissioner.”
The condition of making mandatory the integration of businesses has been introduced through sub-section 9A of the Section 3 of Sales Tax Act, 1990.
Text of the sub-section 9A of Section 3 is:
“(9A) Notwithstanding anything contained in this Act, Tier-1 retailers shall pay sales tax at the rate as applicable to the goods sold under relevant provisions of this Act or a notification issued thereunder:
Provided further that from such date, and in such mode and manner, as prescribed by the Board, all Tier-1 retailers shall integrate their retail outlets with Board’s computerized system for real-time reporting of sales.”
ISLAMABAD: Federal Board of Revenue (FBR) has been empowered to discontinue gas and electricity connections of any person who is making taxable supplies but not registered for sales tax.
A new proviso has been inserted to Section 3 of the Sales Tax Act, 1990 to make an operator of market place to withhold sales tax.
The text of the new proviso is:
“Provided that in case of the online market place facilitating the sale of third party goods, the liability to withhold tax on taxable supplies of such party at the rates specified in column (4) against S. No. 8 of the Eleventh Schedule to this Act, shall be on the operator of such market place.”
According to the Eleventh Schedule of the Sales Tax Act, 1990, the online market place shall collect from persons other than active taxpayers the withholding sales tax at the rate of 2 per cent of gross value of supplies:
Provided that the provisions of this entry shall be effective from the date as notified by the Board [Federal Board of Revenue].
A new clause 18A was inserted to Section 2 of the Sales Tax Act, 1990 through Finance Act, 2021 to bring online market place under sales tax ambit.
The text of clause 18A is:
“(18A) online market place: includes an electronic interface such as a market place, e-commerce platform, portal or similar means which facilitate sale of goods, including third party sale, in any of the following manner, namely:–
(a) by controlling the terms and conditions of the sale;
(b) authorizing the charge to the customers in respect of the payment for the supply; or
In a move aimed at providing flexibility and mitigating financial burdens for taxpayers, Section 183 of the Income Tax Ordinance, 2001 grants the Federal Board of Revenue (FBR) and the Commissioner Inland Revenue (IR) the authority to exempt individuals or classes of persons from penalties and default surcharges.
Section 182A of Income Tax Ordinance, 2001 describes that a person failed to file the income tax return by the due date will not get status of Active Taxpayers’ List (ATL) until the payment default surcharge.
ISLAMABAD: Importers will not be allowed to avail of the facility of provision valuation for goods declaration when the valuation of such goods is already in the field.
An important amendment has been made into Customs Act, 1969 through Tax Laws (Third Amendment) Ordinance, 2021, which was promulgated through presidential order on September 15, 2021.
81. Provisional determination of liability.- (1) Where it is not possible for an officer of Customs during the checking of the goods declaration to satisfy himself of the correctness of the assessment of the goods made under section 79 or 131, for reasons that the goods require chemical or other test or a further inquiry, an officer, not below the rank of Assistant Collector of Customs, may order that the duty, taxes and other charges payable on such goods, be determined provisionally:
Provided that the importer, save in the case of goods entered for warehousing, pays such additional amount on the basis of provisional assessment or furnishes corporate guarantee or pay order of a scheduled bank along with an indemnity bond for the payment thereof as the said officer deems sufficient to meet the likely differential between the final determination of duty, taxes and other charges over the amount determined provisionally:
Provided further that there shall be no provisional assessment under this section if no differential amount of duty and taxes and other charges is paid or secured against corporate guarantee or pay order.
Following is the new proviso added to Section 81:
“Provided further that no provisional determination of value shall be allowed in those cases where a valuation ruling (VR) is in the field, irrespective of the fact whether any review or revision against that VR is pending in terms of section 25D or relevant rules, as the case may be.”
The Customs authorities have been restricted from reopening the assessment of consignment clearance based on incorrect information after a three-year period.
The Tax Laws (Third Amendment) Ordinance, 2021 has granted enhanced powers to the Member Customs, allowing them to annul or modify orders previously passed by the Director-General of Customs Valuation.
He said that the burden of the surge in oil price in the international market is immediately transferred to masses by the government but the process of reduction in the prices is always very slow.
Nisar said that the economy of Pakistan, particularly the SMEs are striving to deal with the post-corona economic crunch and need to get support.
Instead of providing subsidies or waivers, it is unjust to overburden the industries with a hike in the cost of production. An increase in petroleum products costs will further weaken the economic environment which is already under threat on various fronts.
He said that there is no denying the fact that oil rates have been on the rise in the international market now, but the government instead of passing on this surge to the public can reduce the number of taxes on petroleum products as the fuel is the engine of growth.
If fuel would be heavily taxed, the entire economy would suffer unprecedentedly, he said, adding that petrol and HSD are two major products that generate most of the revenue for the government because of their massive and yet growing consumption in the country. Average petrol sales are touching 750,000 tons per month against the monthly consumption of around 800,000 tons of HSD.
The economy is already in a precarious situation, this constant back and forth will only increase volatility, when we ought to be heading for stability, he added.
He said that the cost of doing business and cost of production have shot up to the level of uncompetitiveness. The cost of borrowing was huge and capital financing has become more expensive.
The business leader said Pakistan exports cannot compete with China, Bangladesh and India where power tariffs were 7-9 cents, particularly in the post-corona economic slowdown as the country’s exports have been witnessing a major setback in present days due to the high cost of electricity, which has become a major stumbling block in industrial development and boosting exports.
He said that fuel and electricity are regarded as the lifeline of any economy and play a pivotal role in the socio-economic development of a country.
Mian Anjum Nisar said that industries need low-cost energy to bring down their cost of production, keeping their goods competitive in the international market. He said that the government, in present circumstances, would have to reduce the price of electricity along with the cut in the prices of petroleum products to bring down the cost of doing business and to promote industrial activities.
He said that due to the COVID-19 pandemic, business activities were already in decline and in this situation the government should take serious steps to cut the cost of doing business, as hike in oil rates would further enhance the cost of production, making transport more expensive.
It is to be noted that in a fortnightly review of petroleum products for the second half of September, the price of petrol has been increased by Rs5.00 per litre. The new price of petrol is Rs123.30 per litre, which was Rs118.30 per litre or a 4.2 percent increase.
Mian Anjum Nisar observed that with a view to improving the cash flow of businesses at this crucial time, the government will have to facilitate the industry through the reduction in tax ratio on all items including the oil products, besides lowering the markup rate. He said that at a time when country’s GDP ratio was very nominal amidst high cost of doing business, the industry needs maximum support and relief.
FPCCI former chief and BMP chairman said that high-speed diesel is used mostly in the transport and agriculture sectors. Therefore, any increase in its price will lead to an inflationary impact. The price of light diesel oil has also been hiked, which is used in industries.
