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  • Updated rates of regulatory duty on import of motor vehicles into Pakistan

    Updated rates of regulatory duty on import of motor vehicles into Pakistan

    The Federal Board of Revenue (FBR) has issued latest rates of regulatory duty applicable on import of motor vehicles into Pakistan. The rates are applicable from July 01, 2021.

    In order to apply the rates of the regulatory duty the FBR issued SRO 840(I)/2021 dated June 30, 2021.

    Following are the rates of regulatory duty on motor vehicles, along with HS Code, description and rate of regulatory duty:

    8703.2193 New 4×4 vehicles in completely built unit (CBU):  15 per cent

    8703.2195 New Mini vans (CBU): 15 per cent

    8703.2199 Other (New): 15 per cent

    8703.2220 New Vehicles of a cylinder capacity exceeding 1000cc but not exceeding 1300cc: 15 per cent

    8703.2240 New Mini vans (CBU): 15 per cent

    8703.2260 New Sport utility vehicles: 15 per cent

    8703.2290 Other (New): 15 per cent

    8703.2313 New Sport utility vehicles: 15 per cent

    8703.2319 Other (New): 15 per cent

    8703.2323 New Sport utility vehicles (SUVs 4×4): 90 per cent

    8703.2323 Old and used sport utility vehicles 1801cc to 3000cc: 70 per cent

    8703.2329 Other (New): 90 per cent

    8703.2329 Old and used cars and Jeeps 1801 cc to 3000cc: 70 per cent

    8703.2490 Other (New): 90 per cent

    8703.2490 Old and used cars and jeeps above 3000 cc: 70 per cent

    8703.3129 Other (New): 15 per cent

    8703.3139 Other (New): 15 per cent

    8703.3219 Other (New): 15 per cent

    8703.3223 New Sport utility vehicles (SUVs 4×4): 90 per cent

    8703.3223 Old and used sport utility vehicles above 2000cc: 70 per cent

    8703.3225 New All-terrain vehicles (4×4): 90 per cent

    8703.3225 Old and used All terrain vehicles (CBU): 70 per cent

    8703.3229 Other (New): 90 per cent

    8703.3229 Old and used cars and jeeps above 2000 cc: 70 per cent.

  • Cable TV operators granted exemption of sales tax on services

    Cable TV operators granted exemption of sales tax on services

    KARACHI: The Sindh government has exempted sales tax on services for one year for cable TV operators within the jurisdiction of the province.

    The Sindh Revenue Board (SRB) has issued a notification to further exempt the sales tax on services rendered by cable TV operators till June 30, 2022.

    The Sindh government imposed sales tax on services rendered by cable TV operators through a notification issued on June 27, 2019. However, since then the levy has been exempted. Through a new notification the exemption is further extended for one more year till June 30, 2022.

    According to the amended notification:

    The provincial government has exempted Sindh sales tax on such of the services provided or rendered by Cable TV Operators, as are classified under tariff heading 9819.9000 of the Second Schedule to the said Act, subject to the conditions that such service provider:-

    (a) is registered with the Board in terms of section 24 of the Act and has shown the services of “Cable TV Operators” of tariff heading 9819.9000 as his “Principal Activity” in row No. 12 of the Registration Form SST-01:

    Provided that where the service provider also provides other taxable services including the services of “advertisement on Cable TV network” of tariff heading 9802.5000, he shall also inter-alia indicate the economic activity of such taxable services in the relevant column of Activity Code of “Other Business Activities” in row No. 19 of the Registration Form SST-01;

    (b) is a stand-alone service provider of the taxable service of “Cable TV Operators” of tariff heading 9819.9000.

    Explanation: For the purposes of this notification, a “stand-alone” service provider means a person whose principal activity is the provision of services of “Cable TV Operators” of tariff heading 9819.9000 and whose other service-related business activity, if any, is restricted to the provision of the taxable services of “advertisement on Cable TV network” of tariff heading 9802.5000. Persons providing or rendering taxable services of any of the tariff headings, other than those of tariff headings 9802.5000 and 9819.9000, shall not be eligible to the benefits of this notification:

    Provided that nothing contained in this notification shall be construed to be exempting the taxable services of “advertisement on Cable TV network” classified under tariff heading 9802.5000 even if provided or rendered by such a stand-alone service provider;

    (c) e-files his tax returns (Form SST-03) regularly in the prescribed manner, showing the details of his exempt services of Cable TV Operators (tariff heading 9819.9000) and also of other taxable services including the taxable services of advertisements on Cable TV (tariff heading 9802.5000) therein:

    Provided that the tax returns for the tax periods July, 2016 to June 2021, if not filed earlier, shall be e-filed by the stand-alone service provider on or before the 31st day of July, 2021;

    (d) e-deposits his tax liability on the taxable services, including the taxable services of “advertisement on Cable TV network” (tariff heading 9802.5000), regularly in the prescribed manner:

    Provided that the tax liability for the tax periods July, 2016 to June, 2021, if not paid earlier, shall be e-deposited by the stand-alone service provider in Sindh Government’s head of account “B-02384” in the prescribed manner by the 31st day of August, 2021; and

    (e) complies with the provisions of the Sindh Sales Tax Special Procedure (Withholding) Rules, 2014, in relation to the taxable services, including the taxable service of advertisement on Cable TV network (tariff heading 9802.5000), as are provided or rendered by him and e-deposits the amounts of Sindh sales tax involved, in case such amounts are or were not deducted or withheld by the service recipient or the withholding agent in terms of the said Rules:

    Provided that the liability of Sindh sales tax under the aforesaid Sindh Sales

    Tax Special Procedure (Withholding) Rules, 2014, for the tax periods July, 2016 to June, 2021, if not paid earlier, shall also be e-deposited by the stand-alone service provider in Sindh Government’s head of account “B-02384” in the prescribed manner by the 31st day of August, 2021.

    This notification shall not entitle any person, whether a service provider or a service recipient, to any refund or adjustment of tax already paid or deposited by him in Sindh Government’s head of account “B- 02384” on any day prior to the date of this notification.

    This notification shall take effect from the 1st day of July, 2018, and, if not rescinded earlier, shall stand rescinded on the 30th day of June, 2022.

  • Sindh allows reduced rate of 5% sales tax on services to recruiting agencies

    Sindh allows reduced rate of 5% sales tax on services to recruiting agencies

    KARACHI: The Sindh government has allowed payment of sales tax on services at reduced rate of five per cent to recruiting agencies subject to terms and conditions.

    A notification issued by the Sindh Revenue Board (SRB) stated that the provincial government had allowed the sales tax on the services provided or rendered by the recruiting agents, as are classified under tariff heading 9805.6000 of the Second Schedule to the said Sales Tax on Services Act, 2011 and are also restricted to recruitment of persons or group of persons for employment outside Pakistan, shall be charged, levied and collected at a lower rate of 5% during the tax periods of the financial year 2021-22 subject to the conditions that such a service provider:-

    (a) is registered with the Board in terms of section 24 of the Act and has shown the services of “Recruiting agents” of tariff heading 9805.6000 as his Principal Activity in his Registration Form SST-01:

    Provided that where the service provider also provides any other taxable services as described in the Second Schedule to the Act, he shall inter-alia indicate the economic activity of such services in the relevant column of Activity Code of Other Business Activities, as provided in row number 19 of the Registration Form SST-01, read with the provisions of sub-rule (3) of rule 4 of the Sindh Sales Tax on Services Rules, 2011;

    (b) is a stand-alone service provider of the taxable service of “recruiting agents” of tariff heading 9805.6000.

    Explanation: For the purposes of this notification, a “standalone service provider” means a person whose principal economic activity is the provision of services of “Recruiting agents” of tariff heading 9805.6000, and such economic activity of the provision of the services of recruiting agency is related to recruitment of persons or group of persons for overseas employment in countries outside Pakistan:

    Provided that the services provided or rendered by such recruiting agents in relation to recruitment of persons or group of persons for employment in Pakistan shall continue to be levied to tax at the rate of 13 per cent:

    Provided further that where a recruiting agent provides or renders any of the taxable service not classified under the aforesaid tariff heading 9805.6000, he shall pay the tax relatable to such services (other than the services of tariff heading 9805.6000) at the rate(s) applicable to the tariff heading(s) relatable to such other services;

    (c) e-deposits his tax liability on the taxable services regularly in the prescribed manner:

    Provided that the tax liability for the tax periods upto June, 2021, if not paid earlier, shall be e-deposited by the service provider in Sindh Government’s head of account “B-02384” in the prescribed manner by the 15th day of July, 2021;

    (d) e-files his tax returns (Form SST-03) regularly, in the prescribed manner;

    (e) showing the details of his services liable to statutory rates of tax and also to reduced rates of tax, separately, in the same return:

    Provided that the tax returns for the tax periods prior to June, 2021, if not filed earlier, shall be e-filed by the service provider on or before the 20th day of July, 2021; and

    (f) complies with the provisions of the Sindh Sales Tax on Services Act, 2011, and the rules and notifications issued thereunder.

    This notification shall not entitle any person, whether a service provider or a service recipient, to any refund or adjustment of tax.

    This notification, if not rescinded earlier, shall stand rescinded at 23:59 hours of the —30th day of June, 2022.

  • Taxpayers require to declare assets, income along with annual return

    Taxpayers require to declare assets, income along with annual return

    ISLAMABAD: A statement of wealth is mandatory for filing annual income tax return, which should include details of total assets and liabilities.

    The FBR has opened the IRIS portal for filing income tax return for tax year 2021 for taxpayers including salaried persons, business individuals, Association of Persons (AOPs) and companies have special tax year. The last date for filing the tax return for such taxpayers is September 30, 2021.

    Officials in the FBR said that the taxpayers are required to file wealth statement as well along with the annual return of income for tax year 2021.

    According to Section 116 of Income Tax Ordinance, 2001, the wealth statement is a must document to complete the income tax return.

    The section stated as:

    Wealth statement.— (1) The Commissioner may, by notice in writing, require any person being an individual to furnish, on the date specified in the notice, a statement (hereinafter referred to as the “wealth statement”) in the prescribed form and verified in the prescribed manner giving particulars of —

    (a) the person’s total assets and liabilities as on the date or dates specified in such notice;

    (b) the total assets and liabilities of the person’s spouse, minor children, and other dependents as on the date or dates specified in such notice;

    (c) any assets transferred by the person to any other person during the period or periods specified in such notice and the consideration for the transfer;

    (d) the total expenditures incurred by the person, and the person’s spouse, minor children, and other dependents during the period or periods specified in the notice and the details of such expenditures; and

    (e) the reconciliation statement of wealth.

    (2) Every resident taxpayer being an individual filing a return of income for any tax year shall furnish a wealth statement and wealth reconciliation statement for that year along with such return:

    Provided that every member of an association of persons shall also furnish wealth statement and wealth reconciliation statement for the year along with return of income of the association.

    (3) Where a person, who has furnished a wealth statement, discovers any omission or wrong statement therein, he may, without prejudice to any liability incurred by him under any provision of this Ordinance, furnish a revised wealth statement along with the revised wealth reconciliation and the reasons for filing revised wealth statement, under intimation to the Commissioner in the prescribed form and manner, at any time before the receipt of notice under sub-section (9) of section 122, for the tax year to which it relates:

    Provided that where the Commissioner is of the opinion that the revision under this sub-section is not for the purpose of correcting a bona fide omission or wrong statement, he may declare such revision as void through an order in writing after providing an opportunity of being heard.

    Explanation.- For the removal of doubt it is clarified that wealth statement cannot be revised after the expiry of five years from the due date of filing of return of income for that tax year.

  • FBR constitutes committee for penalty on non-compliance of invoice, packing lists

    FBR constitutes committee for penalty on non-compliance of invoice, packing lists

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday constituted a committee to formulate parameters for imposing penalties against non-compliance of invoice and packing list.

    A spokesman said that the Federal Board of Revenue (FBR) has constituted a committee of senior Customs officers to formulate rules to implement Section 156(I) of the Customs Act, 1969, which was amended through the Finance Act, 2021.

    The spokesman said that provision of law prescribes certain penalties for not placing invoice, packing list inside the container or failure to attach or upload mandatory documents with the goods declaration (GD).

    The committee will formulate rules to develop parameters to specify the person and circumstances in which the penalty prescribed for non-placement of invoice and packing list shall be imposed.

    The committee will also identity different types of GDs and prescribe documents that are considered mandatory for submission along with those GDs.

    FBR has explained that the rules will be notified in due course of time and till framing of rules, no action shall be taken in this matter.

    FBR has assured the trade bodies that the subject provisions will be applicable only after notification of rules by FBR.

    Meanwhile the earlier practice will be continued by the Customs field formations. Moreover, after submission of draft rules by the committee, FBR will publish these draft rules on the FBR website for seeking input from all stakeholders before implementing the same.

  • Regulatory duty on exports reduced

    Regulatory duty on exports reduced

    KARACHI: The Federal Board of Revenue (FBR) has slashed regulatory duty up to half on export of goods.

    The FBR issued SRO 843(I)/2021 dated June 30, 2021 to amend the SRO 645(I)/2018 dated May 24, 2018, which is related to regulatory duty on export of goods.

    According to the latest SRO the regulatory duty on export of hides and skins has been reduced to 10 per cent from 20 per cent.

    Similarly, the regulatory duty on export of molasses has been reduced to 10 per cent from 15 per cent.

  • Additional customs duty at 7% slapped on imports under tariff slab of 30% and above

    Additional customs duty at 7% slapped on imports under tariff slab of 30% and above

    The Federal Board of Revenue (FBR) has announced the imposition of additional customs duty (ACD) ranging from 2% to 7% on specific imports falling under various tariff slabs, with the new rates taking effect from July 1, 2021.

    (more…)
  • Sales tax rate on petrol slashed

    Sales tax rate on petrol slashed

    ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday reduced sales tax to 16.40 per cent ad valorem on supply of petrol.

    The FBR issued SRO 860(I)/2021 to reduce the sales tax on petrol.

    Through the SRO the sales tax rate on petrol has been reduced to 16.40 per cent ad valorem from 17 per cent.

    The sales tax rates on kerosene oil and light diesel are 6.7 per cent and 0.20 per cent, respectively.

    The FBR kept the sales tax rate at 17 per cent unchanged for high speed diesel oil.

    The rates of sales tax on petroleum products have been reduced so the government absorbs the high prices in the international markets and pass on the lesser effect to the consumers.

  • FBR directs car manufacturers to pay KIBOR+3% on late delivery

    FBR directs car manufacturers to pay KIBOR+3% on late delivery

    KARACHI: In order to avail concessionary rate of duty and taxes, the Federal Board of Revenue (FBR) has made it mandatory for car manufacturers to pay KIBOR+3 on late delivery of motor vehicles.

    In order to implement the decision, the FBR issued SRO 837(I)/2021. The FBR said: “The concessionary customs duty for various models of new entrants under Automotive Development Policy (ADP) 2016-21 to continue for five years from date of first manufacturing certificate of respective various issued by the Engineering Development Board (EDP) or up to June 30, 2026, whichever is earlier.

    “The importer-cum-assembler or Original Equipment Manufacturer (OEM) shall pay KIBOR+3 per cent per annum to the customer against late delivery exceeding 60 days of initial booking on the whole of the deposited amount. Statement/details of reimbursement at KIBOR+3 per cent against deliveries beyond 60 days shall be submitted to EDB or Input-output Coefficient Organization (IOCO) bi-annually.”

  • FBR prescribes minimum output of steel products for sales tax payment

    FBR prescribes minimum output of steel products for sales tax payment

    ISLAMABAD: The Federal Board of Revenue (FBR) has prescribed minimum production of steel products for payment of sales tax under Thirteenth Schedule of Sales Tax Act, 1990.

    According to Finance Act, 2021 an amendment has been made to Section 3 of the Sales Tax Act, 1990 in respect of goods, specified in the Thirteenth Schedule, the minimum production for a month shall be determined on the basis of a single or more inputs as consumed in the production process as per criterion specified in the Thirteenth Schedule and if minimum production so determined exceeds the actual supplies for the month, such minimum production shall be treated as quantity supplied during the month and the liability to pay tax shall be discharged accordingly.

    In the Thirteenth Schedule following has been inserted:

    Minimum production of steel products.—

    The minimum production for steel products shall be determined as per criterion specified against each in the Table below:

    S. No.ProductProduction criteria
    (1)(2)(3)
    1.Steel billets and ingotsOne metric ton per 700 kwh of electricity consumed
    2.Steel bars and other re-rolled long profiles of steelOne metric ton per 110 kwh of electricity consumed
    3.Ship plates and other re-rollable scrap85% of the weight of the vessel imported for breaking”; and

    Procedure and conditions:—

    (i) both actual and minimum production and the local supplies shall be declared in the monthly return. In case, the minimum production exceeds actual supplies for the month, the liability to pay tax shall be discharged on the basis of minimum production:

    Provided that in case, in a subsequent month, the actual supplies exceed the minimum production, the registered person shall be entitled to get adjustment of excess tax on account of excess of minimum production over actual supplies:

    Provided further that in a full year, as per financial year of the company or registered person, or period starting from July to June of next year, in other cases, the tax actually paid shall not be less than the liability determined on the basis of minimum production for that year and in case of excess payment no refund shall be admissible:

    Provided also that in case of ship-breaking, the liability against minimum production, or actual supplies, whichever is higher, shall be deposited on monthly basis on proportionate basis depending upon the time required to break the vessel;

    (ii) the payment of tax on ship plates in aforesaid manner does not absolve ship breakers of any tax liability in respect of items other than ship plates obtained by ship-breaking;

    (iii) the melters and re-rollers employing self-generated power shall install a tamperproof meter for measuring their consumption. Such meter shall be duly locked in room with keys in the custody of a nominee of the Commissioner Inland Revenue having jurisdiction.

    The officers Inland Revenue having jurisdiction shall have full access to such meter;

    (iv) the minimum production of industrial units employing both distributed power and self-generated power shall be determined on the basis of total electricity consumption.