Author: Faisal Shahnawaz

Equity market gains 166 points in mixed trading

KARACHI: The equity market gained 166 points on Monday in mixed trading sessions.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 37,504 points as against 37,338 points showing an increase of 166 points.

Analysts at Arif Habib Limited said that the market continued the trend showed last week with an upward move of 361 points during the session but also saw profit booking in sectors (Cement, Engineering, Banks) which took the Index up last week.

Among Cement sector, FCCL, MLCF and PIOC contributed significantly in the top 10 traded volumes.

O&GMCs continued driving upward with SNGP trading at upper circuit and closing at that level.

Friday saw SNGP announcing Board meeting in last week of April, which gave Investors confidence in scrip.

Among Banks, HBL and UBL saw price gains but last half hour saw selling pressure in HBL.

Cement Sector topped volumes table with around 37 million shares, followed by Banks (around 25 million).

Among Scrips, PAEL consecutively outperformed with 18 million traded volume and trading near upper circuit. KEL was also able to garner around 14 million shares however, its price declined by 3.4 percent.

Sectors contributing to the performance include Banks (+55 points), O&GMCs (+31 points), Fertilizer (+27 points), Cement (+20 points), Food (+18 points), Insurance (-14 points).

Volumes declined slightly from 189.4 million shares to 172 million (-9 percent DoD). Average traded value however, increased by 15 percent to reach US$ 43.6 million as against US$ 37.8 million.

Stocks that contributed significantly to the volumes include PAEL, KEL, BOP, FCCL and TRG, which formed 38 percent of total volumes.

Stocks that contributed positively include HBL (+33 points), SNGP (+22 points), NESTLE (+14 points), FCCL (+11 points), and MCB (+11 points). Stocks that contributed negatively include PMPK (-8 points), KEL (-8 points), EFUG (-7 points), POL (-7 points) and ABOT (-6 points).

April 15, 2019
Rupee eases against dollar on higher corporate demand

KARACHI: The Pak Rupee ended down by one paisa against dollar on Monday on higher demand from corporate sector.

The rupee ended Rs141.40 to the dollar from last Friday’s closing of Rs141.39 in interbank foreign exchange market.

The interbank foreign exchange market was initiated in the range of Rs141.39 and Rs141.40.

The market recorded day high of Rs141.40 and low of Rs141.35 and closed at Rs141.40.

Currency dealers said that the local unit gained earlier in the day. However, on demand corporate side the value rebounded.

In open market the rupee gained 20 paisas against dollar.

The buying and selling of dollar was recorded at Rs141.80/Rs142.30 from last Saturday’s closing of Rs142.00/Rs142.50 in cash ready market.

April 15, 2019
Rupee gains four paisas against dollar in early trade

KARACHI: The Pak Rupee gained 4 paisas against dollar in early trade on Monday owing to narrowing trade deficit during first nine months in the current fiscal year.

The dollar is being traded at Rs141.35 to the dollar in interbank foreign exchange market. The foreign current market was ended at Rs141.39 to the dollar on last Friday.

The trade deficit was narrowed by 8 percent during July – March 2018/2019 to $23.67 billion as compared with the deficit of $27.21 billion in the corresponding period of the last fiscal year.

The trade deficit significantly shrank by 21 percent in March 2019 to $2.17 billion as compared with $3.02 billion in the same month of the last year.

April 15, 2019
Sales Tax Act 1990: Invoice issued by suspended taxpayers not to be entertained for refund, input adjustment

KARACHI: Any invoice issued by a person, who is suspended or black listed by tax authorities, may not be acceptable for refund claim or input adjustment by another registered person.

According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), the Section 21 of the Act explained the de-registration, blacklisting and suspension of sales tax registration.

Section 21: De-registration, blacklisting and suspension of registration.

Sub-Section (1): The Board (FBR) or any officer, authorized in this behalf, may subject to the rules, de-register a registered person or such class of registered persons not required to be registered under this Act.

Sub-Section (2): Notwithstanding anything contained in this Act, in cases where the Commissioner is satisfied that a registered person is found to have issued fake invoices or has otherwise committed tax fraud, he may blacklist such person or suspend his registration in accordance with such procedure as the Board may by notification in the official Gazette, prescribe.

Sub-Section (3): During the period of suspension of registration, the invoices issued by such person shall not be entertained for the purposes of sales Tax refund or input tax credit, and once such person is black listed, the refund or input tax credit claimed against the invoices issued by him, whether prior or after such black listing, shall be rejected through a self-speaking appealable order and after affording an opportunity of being heard to such person.

Sub-Section (4): Notwithstanding anything contained in this Act, where the Board, the concerned Commissioner or any officer authorized by the Board in this behalf has reasons to believe that a registered person is engaged in issuing fake or flying invoices, claiming fraudulent input tax or refunds, does not physically exist or conduct actual business, or is committing any other fraudulent activity, the Board, concerned Commissioner or such Officer may after recording reasons in writing, block the refunds or input tax adjustments of such person and direct the concerned Commissioner having jurisdiction for further investigation and appropriate legal action.

April 15, 2019
Procedure to get WeBOC registration for online customs access

KARACHI: Federal Board of Revenue (FBR) has issued procedure to get registration for WeBOC in order to access the Customs online system for consignment clearance.

According to the procedure, a person is required to submit an application to Deputy/Assistant Collector WeBOC User-ID Section, along with supportive/required documents.

For the registration personal appearance of applicant before Deputy / Assistant Collector User-ID Section is mandatory with original CNIC.

The customs staff will take digital picture and thumb impression of the applicant upon personal appearance.

The customs authorities may visit of the business premises (wherever required) as mentioned by the applicant.

After thorough verification the customs authorities may accept or reject the application.

On acceptance of the application the customs authorities to create User-ID and issue Login-ID and automatic sending of computer generated password to the applicant through email.

For the WeBOC registration following details would be required:

NTN Number *

STRN *

Business Name *

Business Address *

Contact Person Name *

Contact Person CNIC *

Phone Number 1*

Phone Number 2

Fax Number

Cell Number*

Contact Person Email id *

Bank Name

Branch City

Branch Name

Account Number

License Number

Collectorate

Warehouse (In case of Warehouse)

Shipping Line Type (In case of Shipping Line)

Location (In case of Terminal Operator)

April 15, 2019
FBR suspends zero rating on electricity to textile unit

ISLAMABAD: Federal Board of Revenue (FBR) has suspended sales tax zero rating allowed to a textile unit on consumption of electricity.

The FBR issued Sales Tax General Order (STGO) No. 51 of 2019 and suspended sales tax zero rating under SRO 1125(I)/2011 dated December 31, 2011 of Habib Fabric Private Limited.

The zero rating of the taxpayers has been suspended on the recommendation of Regional Tax Office (RTO) Faisalabad.

The FBR directed Chief Commissioner RTO Faisalabad to coordinate with power supply company to implement the normal tax rate. The RTO has also been asked to submit report in respect of action taken/recovery made for misuse of the facility.

The FBR also asked Faisalabad Electric Supply Company (FESCO) to start charging sales tax on the supply of electricity in respect of the said consumer with immediate effect (April 10, 2019).

April 14, 2019
FBR may redefine motor vehicle for withholding tax collection

KARACHI: Federal Board of Revenue (FBR) to recommend the government to redefine withholding tax on motor vehicles to bring construction and heavy vehicles into tax net.

The FBR sources said that the FBR may propose amendment to Section 231B(7) of Income Tax Ordinance, 2001.

This section presently defined motor vehicle, including car, jeep, van, sports, utility vehicle, pick up trucks for private use, caravan automobile, limousine, wagon and any other automobile used for private purpose.

The proposed amendment to section is:

“Motor vehicle includes car ,jeep, van, sports, utility vehicle, pick up trucks for private use, caravan automobile , limousine , wagon and any other automobile used for private purpose, any mechanically propelled vehicle adapted for use upon roads whether the powers of propulsion in transmitted thereto from an external or internal source, and includes a chassis to which a body has not been attached, a tractor and a trailer, a combined harvester, a rig, a fork lifter a road roller, construction and earth moving machinery such as a wheel loader, a crane, an excavator, a grader, a dozer and a pipe layer, a road making and road/sewerage cleaning plant and any other motor vehicle as defined under provincial Motor Vehicles Ordinance 1965 and any other law.”

April 14, 2019
Sales Tax Act 1990: persons required to get registration

KARACHI: All the persons engaged in making taxable supplies are required to get sales tax registration.

According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), the Section 14 of the Act, explained the requirement of registration.

Section 14: Registration

Sub-Section (1): Every person engaged in making taxable supplies in Pakistan, including zero-rated supplies, in the course or furtherance of any taxable activity carried on by him, falling in any of the following categories, if not already registered, is required to be registered under this Act, namely:-

(a) a manufacturer who is not running a cottage industry;

(b) a retailer who is liable to pay sales tax under the Act or rules made thereunder, excluding such retailer required to pay sales tax through his electricity bill under sub-section (9) of section 3;

(c) an importer;

(d) an exporter who intends to obtain sales tax refund against his zero-rated supplies;

(e) a wholesaler, dealer or distributor; and

(f) a person who is required, under any other Federal law or Provincial law, to be registered for the purpose of any duty or tax collected or paid as if it were a levy of sales tax to be collected under the Act.

Sub-Section (2): Persons not engaged in making of taxable supplies in Pakistan, if required to be registered for making imports or exports, or under any provisions of the Act, or any other Federal law, may apply for registration.

Sub-Section (3): The registration under this Act shall be regulated in such manner as the Board may, by notification in the official Gazette, prescribe.

April 14, 2019
Amnesty shows 91pc assets declarants are registered

ISLAMABAD: The Amnesty Scheme 2018 has shown the 91 percent tax dodgers, who availed the scheme for declaring undisclosed foreign assets were registered with tax department.

According to presentation of the finance ministry on the previous tax amnesty scheme, the analysis showed around 6,195 persons availed the scheme to declare foreign assets.

It revealed that out of total declarants of foreign assets around 5,625 were already income tax return filers and registered with the Federal Board of Revenue (FBR).

Only 570 declarants of foreign assets were those who had file their returns for the first time.

In the last scheme black money/undeclared assets of around Rs1,060 billion was whitened out of that declaration the FBR got only Rs47 billion as tax revenue. The average tax rate to document the undisclosed foreign assets was 4.43 percent.

Only Rs6.42 billion worth foreign assets were repatriated under the amnesty scheme. While another Rs3.34 billion was investment into the government securities availing the amnesty scheme.

The finance ministry said that amnesty scheme 2018 for undisclosed foreign assets was mostly availed by filers.

Foreign amnesty scheme declaration showed 25 percent declarations in immovable properties mainly in UAE, UK and Canada.

It also revealed that people preferred to keep money outside Pakistan.

The documentation of domestic assets/cash declared under the amnesty scheme 2018 was stood at Rs1,503 billion by 76,952 persons. The FBR received an amount of Rs75 billion as tax revenue.

Interestingly, the quantum of black money invested in prize bonds and cash was 65 percent out of domestic assets that was whitened under the amnesty scheme.

The analysis showed that local scheme was primarily used for money whitening. It is further identified that amnesty did not lead to higher number of tax payments for return for return of tax year 2018.

It said that undisclosed properties and bank accounts still remain largely undisclosed.

April 13, 2019
IMF assistance only option for economy: Shaikh Rasheed

KARACHI: Sheikh Rasheed Ahmed, Federal Minister for Railways on Saturday said the economy is facing immense difficulties.

“We are stuck in a lot of crises and it is a well-known fact that IMF conditions will be really stiff. I, as Minister, have been reiterating this since day one that we have no other option but to approach the IMF for assistance,” he said while addressing business community at Karachi Chamber of Commerce and Industry (KCCI).

He also said that there will be no economic stability without the political stability.

Highlighting the improved performance of Pakistan Railways (PR), the Minister said that PR has earned Rs4 billion more as compared to the earnings during the same period of previous year. “We have also provided three more container trains to the business community and the number of freight trains during Imran Khan’s has enhanced from just 8 to 14,” he added.

He said that a total of 24 new trains have been initiated so far in which five categories have been defined for different types of passengers while the occupancy of Rehman Baba Train has reached 160 percent with improved earnings.

“We have also initiated Jinnah Express and Green Line which will be followed by Sir Syed Express with a target to attract all five types of customers and our overall strategies have been very successful.”

Referring to 1760km long ML-1 project from Karachi to Peshawar, the Minister said that in this regard, Prime Minister Imran Khan will be signing the agreement on 27th April 2019 which would result in laying of completely new double track from Karachi to Peshawar with fencing on both sides and a minimum speed of 160Kms. Work on this project will be completed in the next five years, he added.

Commenting on Karachi Circular Railway Project, the Minister committed that as soon as the Sindh government signs agreement, approves the design and feasibility, Pakistan Railway will remove all encroachments, of which many of the commercial encroachments have already been removed, and hand over the track to Sindh government but the Sindh government has to work in this regard.

“If KCR is not completed during our tenure, it will never be completed”, he opined, adding that it was a really essential project which has become part of CPEC now and the Gwadar port which is capable of docking 190 ships each day.

Responding to a suggestion, he invited the business community to undertake joint venture for setting up setting up the proposed parking plaza on PR land at II Chundrigar Road but Pakistan Railways must continue to get its share regardless of whether the parking plaza becomes successful or not.

Speaking on the occasion, Chairman Businessmen Group & Former President KCCI Siraj Kassam Teli, while referring to Imran Khan’s last year’s visit on July 22 to Karachi to meet the business community just a couple of days before the general election, requested the Sheikh Rasheed to ask PM Imran Khan to honor all his commitments including his commitment to visit KCCI.

He said, “during the said meeting, we suggested to remove all those individuals who are involved in wrongdoings and corruption. We cautioned that the corrupt bureaucracy will not allow Imran Khan to take remedial measures but these elements have to be pinpointed and sidelined while the honest officers must be brought forward at the helm of the affairs.”

“However, except a few nominal changes done recently, no major change was witnessed in the FBR, NAB and FIA and the same old corrupt elements were given freehand, allowed to continue their wrongdoings and asked to make corrections”, he added.

Referring to a letter sent to Prime Minister Imran Khan, Siraj Teli said that the Private Sector’s representatives, who work on the Boards of Public Sector Companies such as Karachi Port Trust (KPT), Pakistan International Airlines (PIA) and Civil Aviation Authority (CAA) etc., take/ endorse decisions purely on the basis of whatever information is provided to them at the Board Meeting of any particular Public Sector company and that information may not be correct or may be incomplete.

“However, after a number of years when FIA or NAB find anything wrong in these public sector companies, they immediately start pursuing private sector representatives who have got nothing to do with day-to-day activities of the public sector companies yet they are accused and undergo extensive investigation and frequent summoning by NAB or FIA”, he added.

He asked Sheikh Rasheed to request the Prime Minister to look into this matter and give immunity to representatives of private sector from such investigations. They should not even be contacted until and unless there is a solid proof of their direct involvement or they being beneficiaries. The Karachi Chamber will never support anyone who is found guilty of any misconduct”, he said, adding that the business community was really worried and fed up due to constant harassment by NAB, FIA and FBR which is not acceptable to at all.

Commenting on the forthcoming Amnesty Scheme, Siraj Teli said that the previous amnesty was better but this amnesty scheme would become a failure due to lack of trust as those individuals who declared their assets in the previous amnesty scheme, were constantly being pursued and harassed by FBR, FIA and NAB. “Amnesty without protection and without dealing with the trust deficit would lead to failure”, he added.

President KCCI Junaid Esmail Makda, in his welcome address, stated that Karachi was one of the world’s most populous city and one of the mega cities. Lamentably, it may be the only city of this size that doesn’t have a mass transit transport system now when surprisingly, it did have Karachi Circular Railway (KCR) in the past.

He said that Karachi produces about 30 percent of the manufactured good, handles 95 percent of foreign trade and contributes more than 70 percent to the national revenue yet it remains deprived of basic facilities including KCR.

April 13, 2019