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Category: Taxation

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  • Corporate RTO Karachi to hold e-Katcheri

    Corporate RTO Karachi to hold e-Katcheri

    KARACHI: Corporate Regional Tax Office (CRTO) Karachi to conduct public e-Katcheri for efficient service delivery and ensure public trust, sources said on Tuesday.

    The program has been launched in compliance with the directive of the prime minister to conduct E-Khuli Katcheri to stay in contact with the public by all available means and provide them accessible platform to raise their issues for timely resolution.

    In this regard Chief Commissioner Inland Revenue, CRTO Karachi will conduct E-Khuli Katcheri on Friday of every second week of the month from 11:00 AM to 12:00 noon through Whatsapp.

    The taxpayers facilitation wing of the FBR recently circulated about the program directing that E-Katcheri would be conducted by every tier of FBR in the second week of every month on regular basis.

    The FBR directed all the tax offices to ensure that all proceedings of the E-Katcheri are property recorded and tasks should be assigned to concerned officers accordingly.

    The tax offices have also been directed to submit performance report on the outcome of the meeting with public.

    In the wake of COVID-19, the tax authorities shall conduct one E-Katcheri at all tiers of FBR in the second week of every month. In the backdrop of COVID-19, only E-Katcheris shall be conducted for the time being until normalcy of the situation.

  • FBR appreciates services of Nausheen Amjad

    FBR appreciates services of Nausheen Amjad

    ISLAMABAD: Senior officers of the Federal Board of Revenue (FBR) gathered on Tuesday to commend the contributions of Ms. Nausheen Javaid Amjad, who recently stepped down from her position as FBR Chairperson.

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  • FBR extends date for submitting Annex-H to claim refund

    FBR extends date for submitting Annex-H to claim refund

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday allowed taxpayers to submit their stock position for the period July–January 2019/2020 up to July 31, 2020 in order to claim sales tax refunds under newly only verification and issuance system.

    In an official memorandum issued, the FBR extended the time limit for filing of Annexure – H for the tax period July – January 2019/2020 up to July 31, 2020.

    Annexure-H is a statement for providing stock position by taxpayers along with monthly sales tax return.

    The FBR from July 01, 2019 introduced expeditious payment of sales tax refunds within 72 hours subject to the true filing of Annexure – H.

    As per the Rules, refund will be treated as having been filed only after filing of Annexure H of the Sales Tax return, for which deadline of 120 days has been prescribed in the Rules and the same can be extended for a period of 60 days on the basis of approval from the Commissioner.

  • Javed Ghani assumes charge of FBR chairman

    Javed Ghani assumes charge of FBR chairman

    ISLAMABAD: Muhammad Javed Ghani has assumed additional charge of chairman Federal Board of Revenue (FBR) on Tuesday after removal of Ms. Nausheen Javed Amjad from the post of FBR chairperson.

    A notification issued by the FBR, Muhammad Javed Ghani, an officer of Pakistan Customs Service BS-22 assumed the additional charge of the post of chairman FBR on July 07, 2020.

    In another notification issued by the FBR stated that Ms. Nausheen Javaid Amjad, BS-22 officer of Inland Revenue Service has relinquished the charge of the post of FBR chairperson with effect from July 07, 2020.

  • Finance Act 2020: Amended list of persons required to file annual income tax return

    Finance Act 2020: Amended list of persons required to file annual income tax return

    ISLAMABAD: Persons falling under final tax regime are now required to file annual income tax returns. In this regard amendment has been made through Finance Act, 2020.

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  • FBR imposes restriction on deduction of profit on debt payable to associated enterprise

    FBR imposes restriction on deduction of profit on debt payable to associated enterprise

    ISLAMABAD: Federal Board of Revenue (FBR) has imposed restriction on deduction of profit on debt payable to associated enterprise in order to comply with OECD action on profit shifting.

    The restriction has been imposed through introduction of Section 106A of Income Tax Ordinance, 2001 through Finance Act, 2020, recently passed by the National Assembly of Pakistan.

    Tax experts at EY Ford Rhodes Chartered Accountants said that in line with Action Plan 4 of the OECD’s recommendations on Base Erosion and Profit Shifting (BEPS), the new section has been introduced which imposes a restriction on deduction of profit on debt payable to associated enterprise.

    The salient features of the new section are:

    — Deduction of foreign profit on debt in excess of fifteen percent of taxable income before depreciation, amortization and foreign profit on debt shall be disallowed to a foreign controlled resident company (other than an insurance or banking company);

    — The section shall not apply if the total foreign profit on debt claimed as a deduction is less than Rs10 million for a tax year;

    — Where the foreign profit on debt cannot be fully adjusted against the taxable income for a tax year, the excess amount shall be added to the amount of foreign profit on debt for the following tax year and shall be treated to be part of that deduction, or if there is no such deduction for that tax year, be treated as the deduction for that tax year and so on for three tax years following the year in which the foreign profit on debt was claimed as an expense;

    According to FBR sources this section shall apply in respect of foreign profit on debt accrued with effect from the first day of July, 2020, even if debts were contracted before the first day of July, 2020;

  • SRB revises sales tax jurisdiction of commissioners

    SRB revises sales tax jurisdiction of commissioners

    KARACHI: Sindh Revenue Board (SRB) on Monday revised jurisdiction of commissioners with effect from July 06, 2020.

    Following is the revised jurisdiction of commissioners:

    Commissioner-I

    Unit 2: Hotels, motels and Guest Houses; restaurants; marriage halls and lawns; caterers; clubs and race clubs; event management services and exhibition services; out-door photographers and videographers; indoor sports and game center: vehicle parking and valet services.

    Unit 4: Business support services; supply chain management or distribution (including delivery) services; call centers; visa processing services including advisory and consultancy services for migration or visa application filing services.

    Unit 5: Ship management services; shipping agents; freight forwarding agents.

    Unit 6: Ship chandlers; stevedores.

    Unit 7: Customs agents.

    Unit 8: Public bonded warehouses; warehouses and depots for storage or cold storage.

    Unit 9: Banks; debt collection services and other debt recovery services provided or rendered by debt collection agencies or recovery agencies or other persons.

    Unit 10: Insurance and re-insurance; insurance agents.

    Unit 11: Non-banking financial institutions and companies; investment banks; investment advisory; fund and asset management; foreign exchange dealer, exchange company, money changer and money exchanger; commission and brokerage on foreign exchange dealings; issuance, processing and operation of credit and debit cards; ATM operations, maintenance and management services.

    Unit 12: stockbrokers, futures brokers and commodity brokers; leasing; modaraba and musharika; share transfer agents; services provided’ or rendered by a registrar to an issue underwriters; credit rating agency.

    Unit 13: Beauty parlors, beauty clinics, smiling clinics or centers and others; healthcare; gyms; physical fitness centers, body massage center; cosmetic and plastic surgery and transplantation; fashion designers; laundries and dry cleaners.

    Unit 32: Terminal operators and port operators; dredging and desilting services.

    Commissioner-II

    Unit 1: telecommunication.

    Unit 15: Security agencies.

    Unit 23: Inter-city transportation or carriage of goods by road or through pipeline or conduit; packers and movers; electric power transmission services.

    Unit 26: Fumigation services; janitorial services; waste collection, transportation, processing and management services, maintenance and cleaning services.

    Unit 28: Legal practitioners and consultants and accountants and auditors; management consultants; software or IT based system development consultants; corporate law consultants; technical, scientific and engineering consultants; other consultants, including tax consultants, human resources and personnel development consultants.

    Unit 29: Auto workshops and authorized service stations; workshop for machinery; workshop for electric or electronic equipment or appliances, etc, including computer hardware; car or automobile washing or similar services stations; car or automobile dealers; services provided or rendered by cab aggregator and services provided and rendered by the owners or drivers of the motor vehicles using the cab aggregator services; rent a car and automobile rental services.

    Commissioner-III

    Unit 3: Contact execution; erection, commissioning and installation services; construction services; ready mix concrete service; contractor of buildings; property developers or promoters; services of mining of minerals and allied and ancillary services in relation thereto; site preparation and clearance, excavation, earth moving and demolition services; architects or town planners; interior decorators.

    Unit 14: Labour and manpower supply services; recruiting agents.

    Unit 19: Advertisement on TV; advertisement on Radio; advertisement on billboards, signboards or digital boards; advertisement on poles; advertising agencies; public relation services.

    Unit 20; Advertising on Cable TV and CCTV; cable TV Operators; other advertisements, including those on Web, Internet, etc.

    Unit 21: Franchise services; intellectual property services.

    Unit 22: Market Research Agency; sponsorship services; Programme producers and production houses.

    Unit 24: Withholding of Sindh Sales Tax.

    Unit 24A: Withholding of Sindh Sales Tax of all offices and departments of Federal, provincial and local or district governments.

    Unit 27: Auctioneers; renting of immovable property services; purchase or sale or hire of immovable property; property dealers; renting of machinery, equipment, appliance and other tangible goods.

    Unit 30: Toll manufacturing or processing; commission agents; indenters’ services.

    Commissioner-IV

    Unit 16: Surveyors; actuarial services; Technical inspection and certification services, including quality control certification services and ISO certification; valuation services, including competency and eligibility testing services.

    Unit 17: Courier services.

    Unit 18: Travel agents; tour operators.

    Unit 25: Technical testing and analysis service; training services; services provided or rendered by laboratories, other than the services relating to pathological, radiological or diagnostic test of patients.

    Unit 31: Airport services, airport operators, chartered flights services.

    Commissioner-V

    Unit 37: All matters related to SWWF and SWPF and other such matters as may be assigned by the Chairman/ Member/ Senior Advisor.

    Commissioner (Sukkur)

    Unit 33: Services provided or rendered in the Civil Division of Sukkur and Larkana.

    Commissioner (Hyderabad)

    Unit 34: Services provided or rendered in the Civil Division of Hyderabad, Shaheed Banazirabad and Mirpurkhas.

    Commissioner (Appeals-I)

    Unit 35: Appeals under sections 57, 58, 59 and 64 of the Sindh Sales Tax on Services Act, 2011, in relation to the orders passed or decisions made by the officers of the SRB in the matters and jurisdiction of the units under Commissioners-I, III, V and Hyderabad.

    Commissioner (Appeals-II)

    Unit 35A: made Appeals under sections 57, 58, 59 and 64 of the Sindh Sales Tax on Services Act, 2011, in relation to the orders passed or decisions by the officers of the SRB in the matters and jurisdiction of the units under Commissioners-II, IV, VI and Sukkur.

    Commissioner (Audit)

    Unit 36: Audit functions under the Sindh Sales on Services Act, 2011, and the rules and notifications issued thereunder. Matters relating to Revenue Receipt Audit, DAC and PAC and jurisdiction of the units under Commissioner-I, III, V & Hyderabad, Revenue reconciliation work and other such matters as may be assigned by the Chairman / Member.

    Unit 36A: Audit functions under the Sindh Sales on Services Act, 2011, and the rules and notifications issued thereunder. Matters relating to Revenue Receipt Audit, DAC and PAC and jurisdiction of the units under Commissioner-II, IV & Sukkur, Revenue reconciliation work and other such matters as may be assigned by the Chairman / Member.

    Where a service provider is engaged in the economic activity of providing or rendering more than one taxable service, as specified in column (3) of the above Table against Unit Nos. 1 to 32 (except Unit 24 and Unit No.24A), as specified in column (2), he shall be placed in the jurisdiction of the Unit, specified in column (2), relatable to the service which is his principal activity as per his registration particulars.

    Where a service provider is engaged in an economic activity in the territorial jurisdiction specified against Unit Nos.33 and 34 but it has its place of business outside such territorial jurisdiction, the officers of the SRB in Unit Nos. 33 and 34, as the case may be, shall exercise concurrent powers and functions with the respective officers of the SRB in Unit Nos.1 to 32 (except Unit No.24 and Unit No.24A).

    Where a service provider is also a withholding agent, the officers of the SRB in Unit No.24 and Unit No.24A shall exercise concurrent powers and functions with the respective officers of the SRB in Unit Nos. 1 to 23 and 25 and 34 in relation to the amounts of Sindh sales tax withheld or liable to be withheld under the provisions of the Sindh Sales Tax Special Procedure (Withholding) Rules of the years 2011 and 2014.

    All the officers of the SRB in Unit Nos. 1 to 34 shall exercise the powers and functions in relation to audit under the Sindh Sales Tax on Services Act, 2011, and rules and notifications issued thereunder, concurrently with the officers of the SRB in Unit No.36 and 36A.

    This issues in supersession of Notification No.SRB-3-4/36/2019 dated 26th November, 2019 and also all other previous notifications / amendments issued in relation thereto.

    This notification shall take effect on and from the 6th July, 2020.

  • Finance Act 2020: Hotel business allowed carry forward loss for eight years

    Finance Act 2020: Hotel business allowed carry forward loss for eight years

    ISLAMABAD: The hotel industry in Pakistan has received a significant tax relief, as the government has allowed businesses in this sector to carry forward losses for a period of eight years starting from the tax year commencing on July 1, 2020. This amendment, introduced through the Finance Act, 2020, was recently approved by the National Assembly.

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  • FBR issues formula for computing capital gain tax on immovable property sale

    FBR issues formula for computing capital gain tax on immovable property sale

    ISLAMABAD: Federal Board of Revenue (FBR) has issued formula for computation of capital gain tax on disposal of immovable property as amended through Finance Act, 2020.

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  • Finance Act 2020: Cash payment Rs250,000 allowed as deduction

    Finance Act 2020: Cash payment Rs250,000 allowed as deduction

    ISLAMABAD: Federal Board of Revenue (FBR) has relaxed the condition for business community by allowing deduction of cash payment up to Rs250,000 while computing business income.

    According to Finance Act 2020 approved by the National Assembly amendments have been introduced to Section 21 of Income Tax Ordinance, 2001.

    Section 21 of the Ordinance prescribes a list of expenditures that are not allowed as a deduction when computing Income from Business.

    This includes certain expenditures that are not made through banking channels if they exceed the prescribed thresholds.

    According to EY Ford Rhodes Chartered Accountants, the Finance Bill had proposed to enhance the threshold of aggregate expenditure under a single account head from Rs50 thousand to Rs250 thousand, not made through banking channels, that would be allowed as a deduction when computing Income from Business..,

    Further the relaxation of a single cash transaction in the above limit has been enhanced from Rs10 thousand to Rs25 thousand.

    Similarly, the threshold of salary, not paid through banking channels, has been proposed to be increased from Rs15 thousand to Rs25 thousand.

    Similar to the provisions of the sales tax laws, the Bill also proposes to introduce a new Clause whereby an industrial undertaking would not be entitled to claim a deduction for any expenditure attributable to sales made to persons required to be registered but not registered under the Sales Tax Act, 1990 computed according to the following formula, namely;

    (A/B) x C

    Where –

    A is the total amount of deductions claimed;

    B is the turnover for the tax year; and

    C is the total amount of sales exclusive of sales tax and federal excise duty to persons required to be registered but not registered under the Sales Tax Act, 1990 where sales equal or exceed rupees 100 million per person.

    Provided that disallowance of expenditure under this Clause shall not exceed twenty percent of total deductions claimed and that the FBR may, by notification in the official Gazette, exempt persons or classes of persons from this Clause on the basis of hardship.

    Another Clause is also proposed to be inserted under which any expenditure on account of utility bills in excess of prescribed limits and conditions would not be allowed as a deduction.