11B. Assessment giving effect to an order.– (1) Except where sub-section (2) applies, where, in consequence of, or to give effect to, any finding or direction in any order made under Chapter-VIII by the Commissioner (Appeals), Appellate Tribunal, High Court or Supreme Court an order of assessment of tax is to be issued to any registered person, the Commissioner or an officer of Inland Revenue empowered in this behalf shall issue the order within one year from the end of the financial year in which the order of the Commissioner (Appeals), Appellate Tribunal, High Court or Supreme Court, as the case may be, was served on the Commissioner or officer of Inland Revenue.
(2) Where, by an order made under Chapter-VIII by the Appellate Tribunal, High Court or Supreme Court, an order of assessment is remanded wholly or partly and the Commissioner or Commissioner (Appeals) or officer of Inland Revenue, as the case may be, is directed to pass a new order of assessment, the Commissioner or Commissioner (Appeals) or officer of Inland Revenue, as the case may be, shall pass the new order within one year from the end of the financial year in which the Commissioner or Commissioner (Appeals) or officer of Inland Revenue, as the case may be, is served with the order:
Provided that limitation under this sub-section shall not apply, if an appeal or reference has been preferred against the order passed by Appellate Tribunal or a High Court.
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ISLAMABAD: The Federal Board of Revenue (FBR) has reiterated the legal authority granted under Section 11A of the Sales Tax Act, 1990, regarding the recovery of short paid tax amounts without issuing any prior notice. This provision remains an essential tool for tax enforcement, especially in cases where taxpayers underreport their liabilities.
11. Assessment of Tax & Recovery of Tax not levied or short levied or erroneously refunded.– (1) Where a person who is required to file a tax return fails to file the return for a tax period by the due date or pays an amount which, for some miscalculation is less than the amount of tax actually payable, an officer of Inland Revenue shall, after a notice to
Show cause to such person, make an order for assessment of tax, including imposition of penalty and default surcharge in accordance with sections 33 and 34:
Provided that where a person required to file a tax return files the return after the due date and pays the amount of tax payable in accordance with the tax return along with default surcharge and penalty, the notice to show cause and the order of assessment shall abate.
(2) Where a person has not paid the tax due on supplies made by him or has made short payment or has claimed input tax credit or refund which is not admissible under this Act for reasons other than those specified in sub-section (1), an officer of Inland Revenue shall after a notice to show cause to such person, make an order for assessment of tax actually payable by that person or determine the amount of tax credit or tax refund which he has unlawfully claimed and shall impose a penalty and charge default surcharge in accordance with sections 33 and 34.
(3) Where by reason of some collusion or deliberate Act any tax or charge has not been levied or made or has been short levied or has been erroneously refunded, the person liable to pay any amount of tax or charge or the amount of fund erroneously made shall be served with the notice requiring him to show cause for payment of the amount specified in the notice.
(4) Where, by reason of any inadvertence, error or misconstruction any tax or charge has not been levied or made or has been short-levied or has been erroneously refunded, the person liable to the amount of tax or charge or the amount of refund erroneously made shall be served with a notice requiring him to show cause for payment of the amount specified in the notice;
Provided that, where a tax or charge has not been levied under this sub section the amount of tax shall be recovered as tax fraction of the value of supply.
(4A)Where any person, required to withhold sales tax under the provisions of this Act or the rules made thereunder, fails to withhold the tax or withholds the same but fails to deposit the same in the prescribed manner, an officer of Inland Revenue shall after a notice to such person to show cause, determine the amount in default.
(5) No order under this section shall be made by an officer of Inland Revenue unless a notice to show cause is given within five years, of the end of the financial year in which the relevant date falls, to the person in default specifying the grounds on which it is intended to proceed against him and the officer of Sales Tax shall take into consideration the representation made by such person and provide him with an opportunity of being heard:
Provided that order under this section shall be made within one hundred and twenty days of issuance of show cause notice or within such extended period as the Commissioner may, for reasons to be recorded in writing, fix provided that such extended period shall in no case exceed ninety days:
Provided further that any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or the time taken through adjournment by the petitioner not exceeding sixty days shall be excluded from the computation of the period specified in the first proviso.
(6) Notwithstanding anything in sub-section (1), where a registered person fails to file a return, an officer of Inland Revenue, not below the rank of Assistant Commissioner, shall subject to such conditions as specified by the Federal Board of Revenue, determine the minimum tax liability of the registered person.
(7) For the purpose of this section, the expression “relevant date” means—
(a) the time of payment of tax or charge as provided under section 6; and
(b) in a case where tax or charge has been erroneously refunded, the date of its refund.
(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.)
Income, or classes of income, or person or classes of person, enumerated below, shall be allowed reduction in tax liability to the extent and subject to such conditions as are specified hereunder:-
(1) (1) Any amount received as-
(a) flying allowance by flight engineers, navigators of Pakistan Armed Forces, Pakistani Airlines or Civil Aviation Authority, Junior Commissioned Officers or other ranks of Pakistan Armed Forces; and
(b) submarine allowance by the officers of the Pakistan Navy,
shall be taxed @ 2.5% as a separate block of income:
Provided that the reduction under this clause shall be available to so much of the flying allowance or the submarine allowance as does not exceed an amount equal to the basic salary.
(1AA) Total allowances received by pilots of any Pakistani airlines shall be taxed at a rate of 7.5%, provided that the reduction under this clause shall be available to so much of the allowances as exceeds an amount equal to the basic pay.
(2) The tax payable by a full time teacher or a researcher, employed in a non profit education or research institution duly recognized by Higher Education Commission, a Board of Education or a University recognized by the Higher Education Commission, including government research institution, shall be reduced by an amount equal to 25% of tax payable on his income from salary:
Provided that this clause shall not apply to teacher of medical profession who derive income from private medical practice or who receive share of consideration received from patients.
(4) In respect of old and used automotive vehicles, tax under section 148 shall not exceed the amount specified in Notification No. S.R.O. 577(I)/2005, dated the 6th June, 2005.
(6) The tax payable under clause (c) of sub-section (1) of section 39, in respect of any amount paid as yield or profit on investment in Bahbood Savings Certificate or Pensioners Benefit Account and Shuhada Family Welfare Account shall not exceed 10% of such profit.
(9) The tax payable on profits and gains derived by a person from low cost housing projects shall be reduced by fifty percent. The reduction in tax liability under this clause shall apply to such project which is—
(a) owned and managed by a company formed for operating the said project and registered under the Companies Act, 2017 (XIX of 2017) and having its registered office in Pakistan; and
(b) not formed by the splitting up, or the reconstruction or reconstitution, of a business already in existence or by transfer to a new business of any machinery or plant used in a business which was being carried on in Pakistan at any time before the commencement of the new business; and
(c) a low cost housing project under which the maximum sale price of a single housing unit is two and a half million rupees:
Provided that exemption under this clause shall continue to remain available to such projects which commence on or before the 30th day of June, 2024.
(9A) The amount of tax payable on income chargeable under the head, “Capital Gains” on disposal of immovable property shall be reduced by fifty percent on the first sale of immovable property acquired or allotted to ex-servicemen and serving acquired or allotted to ex-servicemen and serving personal of Armed Forces or ex-employees or serving personnel of Federal and Provincial Governments, being original allottees of the immovable property, duly certified by the allotment authority:
Provided that for capital gains arising after completion of three years from the date of acquisition of immovable property the amount of tax payable shall be reduced by seventy-five percent
(9B) The tax payable on the income, profits and gains of projects of ‘low cost housing’ developed or approved by Naya Pakistan Housing and Development Authority (NAPHDA) or under the Ehsaas Programme shall be reduced by 90%:
Provided that exemption under this clause shall continue to remain available to such projects which commence on or before the 30th day of June, 2024.
(17) The tax payable by cotton ginners on their income and profits shall not be more than sum of 1% of their turnover from cotton lint, cotton seed, cotton seed oil and cotton seed cake:
Provided that the tax so payable shall be final tax in respect of their cotton ginning and oil milling activities only.
(18) The rate of withholding tax on value of offshore supply contract of an Independent Power Producer located wholly or partly in territories of AJ&K shall be 1% provided:
(i) PPIB has issued Letter of Support for the project;
(ii) its EPC Contract has been executed and submitted to NEPRA for EPC stage tariff determination prior to the enactment of Finance Act, 2018;
(iii) offshore supply contract arrangement of offshore supply contractor having permanent establishment in Pakistan falls under the purview of cohesive business operation as contemplated under Income Tax Ordinance, 2001; and
(iv) such 1% tax shall be full and final liability of the offshore contractor.
(19) The tax payable by woman enterprises on profit and gains derived from business chargeable to tax under the head “Income from Business” shall be reduced by 25%.
Explanation.—For the purpose of this clause a woman enterprise means a startup established on or after first day of July 2021 as sole proprietorship concern owned by a woman or an AOP all of whose members are women or a company whose 100% shareholding is held or owned by women:
Provided that benefit of this clause shall not be available to a business that is formed by the transfer or reconstitution or reconstruction or splitting up of an existing business.
(20) The tax payable by a person other than a banking or insurance company in respect of profit on debt from investment in Federal Government securities shall be fifteen percent of the gross amount of the profit on debt:
Provided that tax so payable shall be final tax on the income representing profit on debt from investment in Federal Government securities.
Note: Clauses not present in the text have been deleted through various amendments.
(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.)
10. Refund of input tax.– (1) If the input tax paid by a registered person on taxable purchases made during a tax period exceeds the output tax on account of zero rated local supplies or export made during that tax period, the excess amount of input tax shall be refunded to the registered person not later than forty-five days of filing of refund claim in such manner and subject to such conditions as the Board may, by notification in the official Gazette specify:
Provided that in case of excess input tax against supplies other than zero-rated or exports, such excess input tax may be carried forward to the next tax period, along with the input tax as is not adjustable in terms of sub-section (1) of section 8B, and shall be treated as input tax for that period and the Board may, subject to such conditions and restrictions as it may impose, by notification in the official Gazette, prescribe the procedure for refund of such excess input tax.
Provided further that the Board may, from such date and subject to such conditions and restrictions as it may impose, by notification in the official Gazette, direct that refund of input tax against exports shall be paid at the fixed rates and in the manner as notified in the such notification.
(2) If a registered person is liable to pay any tax, default surcharge or penalty payable under any law administered by the Board, the refund of input tax shall be made after adjustment of unpaid outstanding amount of tax or, as the case may, default surcharge and penalty.
(3) Where there is reason to believe that a person has claimed input tax credit or refund which was not admissible to him, the proceedings against him shall be completed within sixty days. For the purposes of enquiry or audit or investigation regarding admissibility of the refund claim, the period of sixty days may be extended up to one hundred and twenty days by an officer not below the rank of an Additional Commissioner Inland Revenue and the Board may, for reasons to be recorded in writing, extend the aforesaid period which shall in no case exceed nine months.
(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.)
Part II, Second Schedule of the Income Tax Ordinance, 2001 has provided reduced rates of tax for incomes or classes of income, or persons or classes of persons.
2. The President Federation of Pakistan Chamber of Commerce & Industry, Federation House, Main Clifton, Block-5, Abdullah Shah Ghazi Road, Karachi : Member
3. The President, Karachi Chamber of Commerce and Industry, Aiwan-E-Tijarat Road, Off: Shahrah-e-Liaquat, P.O.Box No. 4138 Karachi : Member
4. The President Women Chamber of Commerce & Industry, Karachi South #4, Plot # 1-C, Lane # 2sehar Commercial Area Phase-VII, D.H.A. Karachi : Member
5. The Chief Executive, Karachi Women Chamber of Commerce & Industry, District East Plot #391, Block # 3, 6th Floor office # 604, Al Reef Tower, Salamgir Road Karachi
6. The President, The American Business Council of Pakitan 155-C 4th Floor Almurtaza Commercial Lane – 2 DHA Phase 8-A Karachi : Member
7. The President, Overseas Investors Chamber of Commerce & Industry Chamber of Commerce Building, Talpur Road Karachi : Member
8. Chairman, Air Cargo Agents Association Of Pakistan, suite No. 305, 3rd Floor, Fortune Centre, 45-A, Block 6, P.E.C.H.S., Sharah-e-Faisal, Karachi : Member
9. Chairman, All Pakistan Fruit & Vegetables Exporters, Importers & Merchants Association House No. 175, C.P. Berar Society block 7/8 Karachi : Member
10. Chairman Customs Agents Association Room No. 7/8, Bombay Plaza Mezzanine Floor, Bohri Road Opp. New Custom House, Karachi : Member
11. Chairman All Pakistan Shipping Association Room No. 712, 7th Floor, Business Centre, Mumtaz Hassan Road Karachi : Member
12. Chairman, Pak Readymade Garments Manufacturers & Exporters Association 3rd Floor, Plot # 57-C 24th Commercial Street Phase II (Ext), D.H.A. Karachi : Member
13. The Chairman, Pakistan Bedwear Exporters Association 245-1V, Block 6, P.E.C.H.S. Karachi : Member
14. The Chairman, Pakistan Leather Garments Manufacturers & Exporters Association, St # 20, Central Avenue, Sector, 7/A Korangi Industrial Area, Karachi : Member
15. The President, Karachi Tax Bar Association, Strachan Road, Saddar Karachi : Member
16. The President, Sukkur Chamber of Commerce & Industry 1st Floor, Sukkur Chamber House, Bunder Road Sukkur : Member
17. President Hyderabad Chamber of Small Traders and Small Industry Naz & Bilal, Shopping Mall 41/499/1, Mezzanine Floor, Saddar Hyderabad : Member
18. The President, Pak-Iran Joint Chamber of Commerce and Industry Jk Plaza, Plot No. 06 Zonki Ram Road, Tamir-e-Nau Masjid Quetta : Member
19. The President, Chaman Chamber of Commerce & Industry Commerce House, Trunch Road, Chaman : Member
20. The President, Gwadar Chamber of Commerce & Industry GCCI, Civic Center airport Road Gwadar : Member
21. Chairman Pakistan Carpet Manufacturers & Exporters Association 23-D, Block # 6, P.E.C.H.S. Shahrah-E-Faisal Karachi : Member
22. Chairman, Pakistan Chemicals & Dyes Merchants’ Association PCDMA House, Rambharti Street, Jodia Bazar Karachi : Member
23. Chairman, Pakistan Waste Products Association, 7/12-A, Rimpa Plaza, M.A. Jinnah Road Karachi : Member
24. Mr. Adnan Mufti, Chartered Accountant, Moore Sheikha Mufti, C-253, PECHS, Block-6, Karachi : Member
25. Mr. Muhammad Ali, Sr. Reporter, Business Recorder, R-1367/15, Federal B. Area, Karachi : Member
26. Mr. Asif Haroon, FCA, State Life Building No. 1-C, I.I, Chundrigar, City Railway Colony, Karachi : Member
27. Mr. Shahnawaz Akhtar, Sr. Staff Correspondent, Bol News, Bol Headquarter, Bol Road, Karachi : Member
28. Mr. Ashraf Khan, Sr. Correspondent, 24 News, DHA Phase 2 Ext, Karachi : Member
29. Mr. Asif Inam, Chairman South Zone APTMA House, 44-A, Street No. 01, Molvi Tamizauddin Khan Road, Lalazar, Karachi : Member
30. Chief (IR-Policy) – IR, FBR (HQ), Islamabad : Member
31. Chief (ST-Operations) IR, FBR (HQ), Islamabad : Member
32. Chief (Tariff) –Customs, FBR (HQ), Islamabad : Member
33. Mr. Shahid Ahmad, Advisor (Customs), FTO Secretariat, R.O. Karachi : Member
34. Mr. Manzoor Hussain Memon, Advisor (Customs), FTO Secretariat, R.O. Karachi : Member
35. Mr. Badruddin Ahmad Qureshi, Advisor, FTO Secretariat, R.O. Karachi : Member
36. Justice (R) Muhammad Nadir Khan, Advisor Incharge, FTO Secretariat, R.O. Quetta : Member
The Chairman of the Advisory Committee may co-opt any person for assistance of the Committee as per need.
Due to budgetary constraints, the FTO Secretariat will not be able to bear the expenses relating to participation of the Members in the Advisory Committee Meetings.
8B. Adjustable input tax.– (1) Notwithstanding anything contained in this Act, in relation to a tax period, a registered person other than public limited companies listed on Pakistan Stock Exchange shall not be allowed to adjust input tax in excess of ninety per cent of the output tax for that tax period:
Provided that the restriction on the adjustment of input tax in excess of ninety percent of the output tax, shall not apply in case of fixed assets or Capital goods:
Provided further that the Board may by notification in the official Gazette, exclude any person or class of persons from the purview of sub-section (1).
(2) A registered person, subject to sub-section (1), may be allowed adjustment or refund] of input tax not allowed under sub-section (1) subject to the following conditions, namely:–
(i) in the case of registered persons, whose accounts are subject to audit under the Companies Ordinance, 1984, upon furnishing a statement along with annual audited accounts, duly certified by the auditors, showing value additions less than the limit prescribed under sub-section (1) above; or
(ii) in case of other registered persons, subject to the conditions and restrictions as may be specified by the Board by notification in the official Gazette.
(3) The adjustment or refund of input tax mentioned in sub-sections (2), if any, shall be made on yearly basis in the second month following the end of the financial year of the registered person.
(4) Notwithstanding anything contained in sub-sections (1) and (2), the Board may, by notification in the official Gazette, prescribe any other limit of input tax adjustment for any person or class of persons.
(4A) Notwithstanding anything contained in sub-sections (1), (2) and (3), input tax allowed in case of locally manufactured electric vehicles subject to reduced rate of tax under the Eighth Schedule shall be limited to the extent of amount of output tax and no refund or carry forward of excess input tax shall be allowed.
(5) Any auditor found guilty of misconduct in furnishing the certificate mentioned in sub-section (2) shall be referred to the Council for disciplinary action under section 20D of Chartered Accountants, Ordinance, 1961 (X of 1961).
(6) In case a Tier-1 retailer does not integrate his retail outlet in the manner as prescribed under sub-section (9A) of section 3, during a tax period or part thereof, the adjustable input tax for whole of that tax period shall be reduced by 60%.
(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.)
