Pkrevenue.com

Category: Taxation

Stay updated on taxation news, tax laws, FBR policies, compliance, audits, income tax, sales tax, and fiscal developments in Pakistan.

  • Re-importation of goods manufactured in Pakistan

    Re-importation of goods manufactured in Pakistan

    Section 22 and 22A of Customs Act, 1969 explains re-importation of goods manufactured in Pakistan and temporary export of imported plant and machinery.

    The Federal Board of Revenue (FBR) issued updated Customs Act, 1969 up to June 30, 2021. The act has been updated by making amendments brought through Finance Act, 2021.

    Following is the text of section 22 and 22A of the Customs Act, 1969:

    22. Re-importation of goods produced or manufactured in Pakistan.- If goods produced or manufactured in and exported from Pakistan are subsequently imported into Pakistan, such goods shall be liable to customs-duties and be subject to all the conditions and restrictions, if any, to which goods of the like kind and value not so produced or manufactured are liable on the importation thereof:

    Provided if such goods have been imported within one year of their exportation and have been consigned to the person in whose account they were exported and have not undergone any processing since their exportation], the appropriate officer not below the rank of 28[Assistant Collector of Customs may admit the goods-

    (a) Where at the time of exportation of such goods, rebate, refund or drawback of any customs or Federal Excise duty or any other tax levied by the Federal Government or any tax, cess or duty levied by the Provincial Government was allowed on payment of customs duty equal to the amount of such rebate, refund or drawback as the case may be;

    (b) where such goods were exported in bond, without payment of –

    (i) the customs-duty chargeable on the imported materials, if any, used in the manufacture of the goods; or

    (ii ) the Federal Excise duty chargeable on the indigenous materials, if any, used in the manufacture of such goods; or

    (iii) the Federal Excise duty, if any, chargeable on such goods; or

    (iv) any other tax chargeable on the material used in the manufacture of such goods; or

    (v) any other tax chargeable on such goods,

    on payment of customs-duty equal to the aggregate amount of all such duties and taxes calculated at the rates prevailing at the time and place of importation of goods; or

    (c) in any other case, without payment of duty.

    22A. Temporary export of imported plant and machinery.- Imported plant and machinery, temporarily exported that have not undergone any alteration, renovation, addition or refurbishment, may be re-imported duty free subject to the specific or general terms and conditions the Board may by the rules prescribe.

    (Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

  • Salary tax rates in Pakistan for Tax Year 2022

    Salary tax rates in Pakistan for Tax Year 2022

    ISLAMABAD: Pakistan tax authorities have issued tax rates for salary income during tax year 2022.

    In Pakistan a person earning Rs600,000 on annual basis as salary income is not required to pay tax. It means annual salary income up to Rs600,000 is exempt from tax.

    The First Schedule of Income Tax Ordinance, 2001 the tax rates for salary income has been defined for tax year 2022.

    Following are the rates of tax for salaried persons during tax year 2022 (July 01, 2021 – June 30, 2022):

    (2) Where the income of an individual chargeable under the head “salary” exceeds seventy-five per cent of his taxable income, the rates of tax to be applied shall be as set out in the following table, namely:—

    1. Where taxable income does not exceed: Rs. 600,000 0%

    2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: 5% of the amount exceeding Rs. 600,000

    3. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000: Rs. 30,000 plus 10% of the amount exceeding Rs. 1,200,000

    4. Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000: Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000

    5. Where taxable income exceeds Rs.2,500,000 but does not exceed Rs. 3,500,000: Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000

    6. Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000: Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000

    7. Where taxable income exceeds Rs. 5,000,000 but does not exceeds Rs. 8,000,000: Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000

    8. Where taxable income exceeds Rs. 8,000,000 but does not exceeds Rs. 12,000,000: Rs. 1,345,000 plus 25% of the amount exceeding Rs. 8,000,000

    9. Where taxable income exceeds Rs. 12,000,000 but does not exceeds Rs. 30,000,000: Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000

    10. Where taxable income exceeds Rs. 30,000,000 but does not exceeds Rs. 50,000,000: Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000

    11. Where taxable income exceeds Rs. 50,000,000 but does not exceeds Rs. 75,000,000: Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000

    12. Where taxable income exceeds Rs. 75,000,000 Rs. 21,420,000 plus 35% of the amount exceeding Rs. 75,000,000]

    (Disclaimer: The text of the above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

  • Customs chemical examiner awarded ‘removal from service’

    Customs chemical examiner awarded ‘removal from service’

    ISLAMABAD: Federal Board of Revenue (FBR) has awarded major penalty of ‘removal from service’ upon a chemical examiner of Pakistan Customs Service (PCS) on the charges of misconduct and inefficiency.

    According to details received on Monday, disciplinary proceedings were initiated against Tahir Jamal, Deputy Assistant Chemical Examiner (BS-16), Collectorate of Customs Appraisement-West, Karachi under the Civil Servants (Efficiency & Discipline) Rules, 2020.

    READ MORE: President Alvi retains major penalty on NAB official

    Saad Atta Rabbani, Additional Collector (BS-19), Collectorate of Customs Appraisement (West), Karachi was appointed as Inquiry Officer vide Order of Inquiry dated August 04, 2021 who conducted inquiry under the Civil Servants (Efficiency & discipline) Rules, 2020 and submitted inquiry report to the FBR on January 05, 2022 with the findings and conclusion that the charges of “Inefficiency” and “Misconduct” stand fully established against the accused officer.

    On the basis of Inquiry Report, a Show Cause Notice was issued on March 31, 2022 to Tahir Jamal, Deputy Assistant Chemical Examiner (BS-16), Collectorate of Customs Appraisement (West), Karachi.

    READ MORE: Customs officer awarded ‘major penalty’ for corruption

    He submitted reply to the Show Cause Notice, which was received in the Board on April 15, 2022, wherein he stated that the Order of Inquiry dated August 04, 2021 is illegal and requires to be withdrawn.

    He further stated that he has challenged the Order of Inquiry by filing an appeal before the Federal Service Tribunal (FST). He also requested for personal hearing enabling him to explain his case in person as well.

    The Member (Admn/HR) / Authority afforded an opportunity of personal hearing to the accused on May 23, 2022.

    The Member (Admn/ HR) / Authority having carefully considered the record of the case, the Inquiry Report, reply to the Show Cause Notice and the submissions made by the accused during the personal hearing, has found no solid evidence and merits in the stance of the accused for submitting wrong/misleading laboratory test reports and remaining away from office w.e.f. August 07, 2018 till date.

    READ MORE: FBR terminates job of IRS officer on misconduct

    Accordingly, the Member (Admn/ HR) / Authority has observed that charges of “Inefficiency” and “misconduct” under Rule 3(a) and (b) of Civil Servants (E&D) Rules, 2020 stand established against the accused.

    The Authority has, therefore, imposed major penalty of “Removal from Service” upon Tahir Jamal, Deputy Assistant Chemical Examiner (BS-16), Collectorate of Customs Appraisement (West), Karachi under Rule 4(3)(d) of the Civil Servants (E&D) Rules, 2020.

    He will have a right to file appeal against this Order to the Appellate Authority under Civil Servants (Appeals) Rules, 1977 within a period of 30 days from the date of communication of this Notification.

    READ MORE: Customs officer awarded ‘dismissal from service’

  • RTO-II Karachi seals Baklava Palace for integration failure

    RTO-II Karachi seals Baklava Palace for integration failure

    KARACHI: Regional Tax Office (RTO) – II, Karachi on Monday sealed a sweet shop i.e. M/s. Baklava Palace for failure to mandatory integrate with online system.

    RTO – II, Karachi, an arm of the Federal Board of Revenue (FBR), while continuing its crackdown against non-compliant Tier-1 retailers, sealed the business premises of M/s. Baklava Palace, located at Khayaban-e-Shamsheer, DHA Phase V, Karachi.

    READ MORE: RTO-II Karachi seals electronics shop for integration failure

    The RTO –II Karachi during its drive against non-compliant Tier-1 Retailers had sealed many other retail outlets including Dhamtal and Rafi Electronics.

    According to officials at Zone-III, RTO-II, Karachi said that the tax office had already passed an order on January 01, 2022 against the Tier-1 retailer for mandatory integration.

    “M/s. Baklava Palace (NTN 2668310-5) is conducting taxable activities as a retailer and comes under the purview of Tier-1 retailer as defined under clause (a) and (e) of Section 2(43A) of the Sales Tax Act, 1990.

    READ MORE: FBR issues procedure for restoration of input tax adjustment

    “As per 2nd provisio of Section 3(9A) of the Sales Tax Act, 1990, read with clause (2) of Rule 150ZEA of the Sales tax Rules, 2006, they were required to integrate their Point of Sale (POS)/retail outlet with the FBR’s computerized system for real-time reporting of sales in the mode and manner prescribed in Chapter XIV-AA of the Sales Tax Rules, 2006.

    “The taxpayer is also included in STGO No. 16 of 2022 dated May 06, 2022. However, record shows that M/s. Baklava Palace has not integrated their POS / retail outlet till date,” the official told PkRevenue.com

    All the Tier-1 retailers are required to integrate with the FBR under Section 33 of the Sales Tax Act, 1990. The RTO-II had warned the Tier-1 retailer that in case it failed to integrate in the manner as required under the Sales Tax Act, 1990 and the rules made thereunder, the business premises will be sealed.

    READ MORE: POS service fee issue hampers sales tax return filing

    Under the Sales tax Act. 1990: it is an offence: “A person required to integrate his business as integrated under sub-section (9A) of Section 3, who fails to get himself registered under the Act, and if integrated, fails to integrate in the manner as required under the law and rules made thereunder.”

    The penalties for the offence are included as:

    (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:

    READ MORE: FBR issues list of 185 retailers for mandatory integration

    Notwithstanding above, the business premises of such person shall be liable to be sealed by an officer of Inland Revenue in the manner prescribed.

    Provided that if the retailer integrates his business with the Board’s Computerized System before imposition of penalty for second default, penalty for first default shall be waived by the Commissioner.

  • FBR may defer duty collection through special order

    FBR may defer duty collection through special order

    Section 21A of Customs Act, 1969 has empowered Federal Board of Revenue (FBR) to defer imposition of custom duty through especial order.

    READ MORE: Govt. may exempt customs duty in emergency situation

    The Federal Board of Revenue (FBR) issued updated Customs Act, 1969 up to June 30, 2021. The act has been updated by making amendments brought through Finance Act, 2021.

    Following is the text of section 21A of the Customs Act, 1969:

    READ MORE: FBR’s power to notify customs tariff

    21A. Power to defer collection of customs-duty.- (1) Subject to such conditions, limitations or restrictions as it thinks fit to impose, the Board may, in such general cases as may be prescribed by rules or in particular cases by special order, defer the collection of customs-duties either in whole or in part.

    (2) Where deferment of customs-duties is allowed by the Board under sub-section (1), a surcharge not exceeding KIBOR plus three per cent per annum shall also be payable on the deferred amount from such date and in the manner as the Board may by rules prescribe.

    READ MORE: Detention of goods violating customs act

    (Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

    READ MORE: Rate of customs duty in Pakistan on imports

  • Customs directed not to confiscate personal baggage

    Customs directed not to confiscate personal baggage

    LAHORE: Authorities of Pakistan Customs have been directed to facilitate passengers and not to confiscate personal gifts and food brought with the passengers.

    Head of Prime Minister’s Strategic Reforms Salman Sufi directed this while visiting Lahore Airport.

    READ MORE: Banned items: FBR deputes officers 24X7 to facilitate passengers

    Salman Sufi said new airport operation reforms will be announced soon to improve passenger facilities at airports.

    He said this during his visit to Lahore Airport to review the complaints of confiscation of personal belongings of passengers and the facilities provided to them.

    READ MORE: Import ban not to apply on L/C issued before May 19, 2022

    Salman Sufi directed the customs authorities to improve services through a systematic procedure from receipt of goods to inspection and not confiscate any personal gifts and food brought with the passengers.

    READ MORE: Pakistan’s imports hit record high at $65.47 bn in 10 months

    He also directed the Civil Aviation Authority to increase the number of porters and provide special rooms for the disabled passengers where they can rest in case of any flight delay.

    Salman Sufi said work has been started to run the Lahore airport in a new style so that best services could be provided to the passengers as per the vision of Prime Minister Shahbaz Sharif.

    READ MORE: Pakistan’s March trade deficit widens by only 5.5%

  • FBR issues list of 113 retailers for mandatory integration

    FBR issues list of 113 retailers for mandatory integration

    ISLAMABAD: The Federal Board of Revenue (FBR) has issued a list of 113 retailers and directed them to integrate by June 10, 2022 otherwise action will be taken as per law.

    The FBR issued Sales Tax General Order (STGO) No. 18 of 2022 related to Tier-1 retailers for integration with FBR’s Point of Sale (POS) system.

    READ MORE: FBR issues list of 185 retailers for mandatory integration

    The Finance Act, 2019 added sub-section (6) to Section 8B of the Sales Tax Act, 1990 whereby a Tier-1 Retailer who did not integrate its retail outlet in the manner prescribed under Sub-Section (9A) of Section 3 of the Sales Tax Act, 1990 during a tax period, its adjustable tax for that period would be reduced by 15 per cent. The figure of 15 per cent has been substituted by 60 per cent vide Finance Act, 2021.

    READ MORE: FBR issues list of 1,358 retailers for mandatory POS

    In order to operationalize this important provision of law, a system-based approach has been adopted whereby all Tier-1 Retailers who were liable to integrate but have not yet integrated, with effect from July 2021 (Sales Tax Returns filed in August 2021) are not be dealt as per the procedure laid down in STGO No/ 1 of 2022 issued on August 3, 2021.

    READ MORE: Prize scheme on invoices issued by retailers

    Under this STGO, a list of 113 identified Tier-1 Retailers has been placed on FBR’s web portal allowing them to integrate with FBR’s system by June 10, 2022 and the procedure of exclusion from this list of 113 identified Tier-1 Retailers shall apply as laid down in STGO 17 of 2022 dated May 05, 2022.

    The FBR said that upon filing sales tax return for the month of May 2022 for all hereby notified Tier-1 Retailers not having yet integrated, their input tax claim would be disallowed as above, without any further notice or proceedings, creating tax demand by the same amount.

    READ MORE: FBR decides penal action against defaulting retailers

  • RTO-II Karachi seals electronics shop for integration failure

    RTO-II Karachi seals electronics shop for integration failure

    KARACHI: Regional Tax Office (RTO) – II, Karachi on Saturday sealed a shop of electronics goods for failure to mandatory integrate with online system.

    RTO – II, Karachi, an arm of the FBR, while continuing its crackdown against non-compliant Tier-1 retailers, sealed the business premises of M/s. Rafi Electronics located at Gulshan e Iqbal, Karachi.

    READ MORE: FBR issues procedure for restoration of input tax adjustment

    The tax authorities also imposed an amount of Rs500,000 as penalty for non-compliance.

    According to officials at Zone-III, RTO-II, Karachi said that the tax office had already passed an order on January 01, 2022 against the Tier-1 retailer for mandatory integration. Further, the penalty amount of Rs500,000 was also imposed for non-compliance.

    “The retailer despite receiving the order has failed to install Point of Sale (POS) and integrate the unit till the sealing of the unit,” an official said.

    READ MORE: POS service fee issue hampers sales tax return filing

    All the Tier-1 retailers are required to integrate with the FBR under Section 33 of the Sales Tax Act, 1990. The RTO-II had warned the Tier-1 retailer that in case it failed to integrate in the manner as required under the Sales Tax Act, 1990 and the rules made thereunder, the business premises will be sealed.

    Under the Sales tax Act. 1990: it is an offence: “A person required to integrate his business as integrated under sub-section (9A) of Section 3, who fails to get himself registered under the Act, and if integrated, fails to integrate in the manner as required under the law and rules made thereunder.”

    The penalties for the offence are included as:

    (i) penalty of five hundred thousand rupees for first default;

    READ MORE: FBR issues list of 185 retailers for mandatory integration

    (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:

    Notwithstanding above, the business premises of such person shall be liable to be sealed by an officer of Inland Revenue in the manner prescribed.

    Provided that if the retailer integrates his business with the Board’s Computerized System before imposition of penalty for second default, penalty for first default shall be waived by the Commissioner.

    READ MORE: Adjustment restrictions hamper return filing by retailers

  • FBR exempts sales tax on oxygen gas import

    FBR exempts sales tax on oxygen gas import

    The Federal Board of Revenue (FBR) has taken a significant step by exempting sales tax on the import of oxygen gas.

    (more…)
  • FBR’s power to allow goods without duty payment

    FBR’s power to allow goods without duty payment

    Section 21 of Customs Act, 1969 has explained power to deliver certain goods without payment of duty and to repay duty on certain goods.

    The Federal Board of Revenue (FBR) issued updated Customs Act, 1969 up to June 30, 2021. The act has been updated by making amendments brought through Finance Act, 2021.

    Following is the text of section 21 of the Customs Act, 1969:

    21. Power to deliver certain goods with-out payment of duty and to repay duty on certain goods.- Subject to such conditions, limitations or restrictions as it thinks fit to impose, the Board may, in such general cases as may be prescribed by rules or in particular cases by special order, authorize-

    (a) the delivery without payment of the customs-duties chargeable thereon of goods which are imported only temporarily with a view to subsequent exportation;

     (c) the repayment in whole or in part of the duties as levied under section 18 or 18A and paid on the importation of any goods which have been used in the production, manufacture, processing, repair or refitting in Pakistan of goods meant for exportation, or for supplies against international tenders, or for supply to industrial units, projects, institutions, agencies and organizations, entitled to import the same at concessionary rates:

    Provided that no repayment may be granted in a case in which the amount involved is less than one hundred rupees ; and

    (d) without prejudice to the provisions of clause (c), the Federal Government may, by notification in the Official Gazette, direct that drawback or repayment shall not be allowed in respect of any goods of specified description or may be allowed subject to such restrictions and conditions as may be specified in the notification.

    (Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

    READ MORE: Govt. may exempt customs duty in emergency situation