Category: Taxation

Pakistan Revenue delivers the latest taxation news, covering income tax, sales tax, and customs duty. Stay updated with insights on tax policies, regulations, and financial developments in Pakistan.

Customs intelligence Karachi announces auction of confiscated vehicles on June 19

KARACHI: Customs Intelligence and Investigation has announced auction of confiscated vehicles to be held on June 19, 2019 at State Warehouse of the Directorate of Intelligence and Investigation, Karachi.

According to details made available to PkRevenue.com following vehicles will be presented for auction on June 19, 2019.

Auction of Left over lots (Rejected lots )and fresh lots will be held on 19th June, 2019.

1. Toyota Crown Car, Reg no AA-7095, Model 1995.

2. BMW Car, Reg no QZ-318, Model 2000.

3. Mercedes Benz Car(E-500), Reg no AC-3077, Model 2002.

4. Honda Inspire Car, Reg no GS-4012, Model 2003.

5. Toyota Crown Car, Reg no AAJ-191, Model 2002.

6. Mercedes Benz car, Reg no AAJ-106, Model 2001.

7. Toyota Land Cruiser Jeep, Reg no BRN-124689, Model 1990.

8. Toyota Premio Car, Reg no BFB-537, Model 2005.

9. Toyota Premio Car, Reg no LT-737, Model 2003.

10. Toyota Land Cruiser, Reg no JAF-935, Model 1994.

11. Toyota Land Cruiser, Reg no IDL-531, Model 1993.

12. Mercedes Benz Car(S-550), Reg no CZ-672, Model 2007.

13. BMW Car760Li, Reg no BCP-523, Model 2002.

14. Toyota Crown Car, Reg no BBL-439, Model 2004.

15. Honda Accord Car, Reg no AXY-881, Model 2003.

16. Toyota Surf Jeep, Reg no BD-0310, Model 2003.

17. Toyota Mark-X Car, Registration plate/Mark no AQJ-399, Model 2007.

18. Toyota Vitz Car, Reg no BFH-878, Model 2001.

19. Mercedes Benz Car, Reg no AYB-709, Model 2008.

20. BMW 530i Series Car, reg no LZG-105, Model 2004.

21. Toyota Prado Jeep, Reg no LXW-7155, Model 1996.

22. Toyota Premio Car, Reg no BDJ-715, Model 2002.

23. Toyota Lexus Car, Reg no BDJ-700, Model 2005.

24. BMW 320i Car, Un-Registered, Model 2003.

25. Toyota Vitz Car, Registration plate/mark AA-483, Model 2001.

26. Honda Civic Rebon Car, Registration plate/Mark YK-561, Model 2005.

June 17, 2019
Finance Bill 2019: GD filing limit reduced to 10 days

KARACHI: The government has reduced the goods declaration filing limit from 15 days to 10 days by proposing amendment to Section 79 of Customs Act, 1969.

The Finance Bill 2019 has proposed reduction in time limit of filing GD from 15 days to 10 days.

Presently Section 79 of Customs Act, 1969 is as:

79. Declaration and assessment for home consumption or warehousing or transshipment

(1)The owner of any imported goods shall make entry of such goods for home consumption or warehousing or transshipment] or for any other approved purposes, within fifteen days of the arrival of the goods, by,-

(a) filing a true declaration of goods, giving therein complete and correct particulars of such goods, duly supported by commercial invoice, bill of lading or airway bill, packing list or any other document required for clearance of such goods in such form and manner as the Board may prescribe; and

(b) assessing and paying his liability of duty, taxes and other charges thereon, in case of a registered user of the Customs Computerized System:

Provided that if, in case of used goods, before filing of goods declaration, the owner makes a request to an officer of customs not below the rank of an Additional Collector that he is unable, for want of full information, to make a correct and complete declaration of the goods, then such officer subject to such conditions as he may deem fit, may permit the owner to examine the goods and thereafter make entry of such goods by filing a goods declaration after having assessed and paid his liabilities of duties, taxes and other charges:

Provided further that no goods declaration shall be filed prior to ten days of the expected time of arrival of the vessel.

Explanation.- For the purposes of this clause, the assessment and paying of duty, taxes and other charges in respect of transshipment shall be at the port of destination.

(2) If an officer, not below the rank of Additional Collector of Customs, is satisfied that the rate of customs duty is not adversely affected and that there was no intention to defraud, he may, in exceptional circumstances and for reasons to be recorded in writing, permit, substitution of a goods declaration for home consumption for a goods declaration for warehousing or vice versa.

(3) An officer of Customs, not below the rank of Assistant Collector of Customs, may in case of goods requiring immediate release allow release thereof prior to presentation of a goods declaration subject to such conditions and restrictions as may be prescribed by the Board.

The Bill, however, also proposed the penalty for non-filing of the declaration within the stipulated time is proposed to be amended from Rs15,000 to Rs5,000 per day for the initial five days of default and at a rate of Rs10,000 per day for each day of default thereafter.

June 17, 2019
Finance Bill 2019: reduced duty rates proposed for various imported goods

KARACHI: The government has announced reduction in customs duty on import of various goods.

The reduction in duty has been proposed through Finance Bill 2019.

According to A F Ferguson & Co. Chartered Accountants Firm, by virtue of amendment in First Schedule and Fifth Schedule, reduction in customs duty has been proposed for the following items:

Acetic acids from 16 percent to 11 percent

Oxalic acid from 11 percent to 3 percent

Sheets of veneering from 11 percent to 3 percent

Fibreboard of wood of certain specifications from 16 percent to 11 percent

Fabric (non-woven) from 16 percent to 11 percent

Aluminium cans from 20 percent to 11 percent

Chemicals used in leather or like industries from 20 percent /16 percent to 16 percent /11 percent

Insulation tape double sided from 11 percent to zero percent

Shoe lasts from 20 percent to 16 percent

Other articles of Vulcanised rubber 20 percent to 5 percent

Graphite or other carbon or mixture of these products 11 percent to 3 percent

Other refractory ceramic goods from 11 percent to 3 percent

Other Electric motors and generators from 20 percent to 16 percent

Other automatic regulating and controlling instruments from 20 percent to 16 percent

Multi-ply (clay coated paper and paper board) and aluminium foil from 18 percent to 15 percent

Coils of aluminium alloys from 8 percent to 5 percent

Pre-fabricated room/structures for setting up new hotels/motels in Hill Stations, Gilgit-Baltistan, AJK, and Coastal Areas of Baluchistan from 11 percent to 8 percent

(ii) Following new concessions have been proposed under the Fifth Schedule:

– Laser transmitter, laser receiver, control box, rigid mast pack, with or without scraper at concessional rate of 2 percent

– Plant and Machinery by developers, contractors and service companies involved in infrastructure development of Large Diameter Gas Pipelines(i.e. 24” and above) projects at concessional rate of 10 percent to 0 percent subject to certain conditions

– Aluminium sheets and coils and aluminium foil, AKD wax and dispersing agents at concessional rate of 5 percent

– Imports by manufacturer of infant formula milk registered under Sales Tax Act, 1990 at concessional rate of 5 percent

– Import of Exposide resin, if imported by manufacturer of powder coatings registered under Sales Tax Act, 1990 and subject to annual quota by IOCO at concessional rate of 10 percent

– Polymers of ethylene and other plastic raw materials on import by manufacturers of diapers and sanitary napkins registered under Sales Tax Act, 1990 at concessional rates of 16 percent to 5 percent

– Import of carbon steel strip imported by manufacturer of shaving bladed/razors registered under Sales Tax Act, 1990 at concessional rate of 5 percent

– Import of CNG vehicle conversion kits approved by OGRA imported by authorized dealers at concessional rate of 5 percent

(iii) Following amendments for availing concessions earlier granted have been proposed for the following sectors:

Sector Particulars

Agriculture Sector

Certain conditions for availing the concession on import of agricultural machinery have now proposed to be waived off

Power transmission and grid stations

An additional condition has been proposed for availing concessional duty on import of machinery and equipment meant for power transmission and grid stations. The goods shall not be sold without prior approval of the FBR.

Marble, granite and gem stone extraction and processing industries

Additional condition for the concessional rate on machinery and equipment is proposed to be added with respect to disposal of the imported machinery.

June 17, 2019
Finance Bill 2019: duty exemptions on various imported goods proposed

KARACHI: The government has proposed exemptions from customs duty on import of various goods through Finance Bill 2019.

According to A. F. Ferguson & Co. Chartered Accountants Firm the Finance Bill 2019 has proposed exemption from customs duty is proposed on following items:

– Various industrial inputs / raw materials

– Pharmaceutical products

– Plastic film medical grade

– Fertilizers

– Plant and machinery for setting up Hydrocracker plants for oil refining

– Raw skins and hides

– Machinery parts and items relating to textile industry

– Solar air water generator

– Raw material for paper industry

– Wood

– Certain raw materials used in manufacture of home appliances subject to certain conditions

– Raw material and components for local manufacture of Hemodialyzer, used in hydrolysis equipment by kidney failure patients

June 17, 2019
Customs law amended to recover unpaid amount from exporters

KARACHI: The government has put a check on exporters related to unpaid amount of duty and taxes at the time of export clearance and amended law to recover the same.

Through Finance Bill 2019, it is proposed to amend Section 32(3)(A) of Customs Act, 1969 to apply this check on exporters.

Sub-section (3A) of Section 32 deals with the issuance of show cause notice in the situation where any duty, taxes or charge has not been levied, short-levied or erroneously refunded, discovered as a result of an audit or examination of an importer’s accounts or by any other means.

The Finance Bill 2019 seeks to extend the application of this section to exporters as well.

The existing law under Section 32(3)(A) said:

Notwithstanding anything contained in sub-section (3), where any duty, taxes or charge has not been levied or has been short-levied or has been erroneously refunded and this is discovered as a result of an audit or examination of an importer’s accounts or by any means other than an examination of the documents provided by the importer at the time the goods were imported, the person liable to pay any amount on that account shall be served with a notice within five years of the relevant date requiring him to show cause why he should not pay the amount specified in the notice:

Provided that if the recoverable amount in a case is less than one hundred rupees, the Customs authorities shall not initiate the aforesaid action.

June 16, 2019
FBR empowered to impose fee, service charges under Customs laws

KARACHI: Federal Board of Revenue (FBR) has been empowered to impose service charges and date of determination of rate of import duty under Customs Act 1969.

The Finance Bill 2019 has proposed delegation of powers from federal government to the FBR, which included: levy of fee and service charges; date of determination of rate of import duty; date of determination of rate of duty for clearance through the Customs Computerized System; and date for determination of rate of duty on goods exported.

The bill proposed delegation powers to FBR under Section 18D, 30, 30A and 31 of Customs Act, 1969.

Presently Section 18D of Customs Act, 1969 states:

18D. Levy of fee and service charges.- The Federal Government may, by notification in the official Gazette, subject to such conditions, limitations or restrictions as it may deem fit to impose, levy fee and service charges for examination, scanning, inspections, sealing and desealing, valuation check or in respect of any other service or control mechanism provided by any formation under the control of the Board, including ventures of public-private partnership, at such rates as may be specified in the notification.

Presently Section 30 of Customs Act, 1969 states:

30. Date of determination of rate of import duty.- The rate of duty applicable to any imported goods shall be the rate of duty in force;

(a) in the case of goods cleared for home consumption under section 79, on the date on which a goods declaration is manifested under that section; and

(b) in the case of goods cleared from a warehouse under section 104, on the date on which a goods declaration for clearance of such goods is manifested under that section:

Provided that, where a goods declaration has been manifested in advance of the arrival of the conveyance by which the goods have been imported, the relevant date for the purposes of this section shall be the date on which the manifest of the conveyance is delivered at the port of first entry:

Provided further that, in respect of goods for the clearance of which a goods declaration for clearance has been manifested under section 104, and the duty is not paid within seven days of the goods declaration being manifested, the rate of duty applicable shall be the rate of duty on the date on which the duty is actually paid:

Provided further that in case of the goods illegally removed from the warehouse, the rate of duty shall be the rate prevalent either on the date of in-bonding or detection of case or date of payment of the duty and taxes, whichever is higher:

Provided further that in case of exercising option for redemption of fine in lieu of confiscation of the goods seized during anti-smuggling operations, the rate of duty shall be the rate prevalent either on the date of seizure or date of payment of duty and taxes, whichever is higher:

Provided further that the Federal Government may, by notification in the official Gazette, for any goods or class of goods, specify any other date for the determination of rate of duty.

Explanation:- For the purpose of this section “manifested” means that when a machine number is allocated to goods declaration and is registered in Customs record.

Presently Section 30A of Customs Act, 1969 states:

30A. Date of determination of rate of duty for clearance through the Customs Computerized System.- Subject to the provisions of section 155A, the rate of duty applicable to any imported or exported goods if cleared through the Customs Computerized System, shall be the rate of duty in force on;-

(a) the date of payment of duty;

(b) in case the goods are not chargeable to duty, the date on which the goods declaration is filed with Customs.

Provided that where a goods declaration has been filed in advance of the arrival of the conveyance by which the goods have been imported, the relevant date for the purposes of this section shall be the date on which the manifest of the conveyance is filed at the customs-station of first entry:

Provided further that the Federal Government may, by notification in the official Gazette, specify any other date for the determination of rate of duty in respect of any goods or class of goods.

Presently Section 31 of Customs Act, 1969 states:

31. Date for determination of rate of duty on goods exported.- The rate and amount of duty applicable to any goods exported shall be the rate and amount chargeable at the time of the delivery of the goods declaration under section 131:

Provided that where the export of any goods is permitted without a goods declaration or in anticipation of the delivery of such a declaration, the rate and amount of duty applicable shall be the rate and amount chargeable on the date on which loading of the goods on the outgoing conveyance commences:

Provided further that the Federal Government may, by notification in the official Gazette, for any goods or class of goods, specify any other date for determination of the rate of duty.

June 16, 2019
Collectors’ power to determine customs values withdrawn

KARACHI: The government has withdrawn the power of Collector of Customs in determination of customs value on his own motion through Finance Bill 2019.

The Finance Bill 2019 proposed to withdraw the powers of the collector of customs to determine customs valuations on his motion under Section 25A(1) and Section 25A(3) of Customs Act, 1969.

The collector of customs presently has powers to determine the customs values under Section 25A.

The sub-section 1 of Section 25A states: Notwithstanding the provisions contained in section 25, the Collector of Customs on his own motion, or the Director of Customs Valuation on his own motion or on a reference made to him by any person or an officer of Customs, may determine the customs value of any goods or category of goods imported into or exported out of Pakistan, after following the methods laid down in section 25, whichever is applicable.

The sub-section 3 of Section 25A states: In case of any conflict in the customs value determined under sub-section (1), the Director-General of Customs Valuation shall determine the applicable customs value.

The powers of determining customs values have now been proposed to be available with Director of Customs Valuation.

Analysts said that this proposal in the Finance Bill 2019 would provide relief to import in clearance of consignments. They said that many arbitrary decisions of Collector have created hassles for the importers in the past and consignments were stuck up for a long time.

June 16, 2019
MCC Appraisement East announces auction of confiscated vehicles on June 17

KARACHI: Model Customs Collectorate (MCC) Appraisement East has announced public auction of confiscated vehicles on June 17, 2019 at Anti-Smuggling Organization (ASO) Office, Ghasbandar Kemari, Karachi.

Following vehicles will be presented for auction:

1. Mitsubishi Pajero Jeep (used), Reg.GS-2000, Model-1994,Chassis -V46-4034791/Engine-4M4D EXT T7UF.

2. Used Toyota Lexus Car, Reg no UC-868, Model 2006(as per seat belt), Chassis JTHBG963905034702/Engine EMH-3 GR-FE158467-3485cc.

3. Used Toyota Harrier Jeep, Reg no JAA-454, Model -1998-2999cc,Chassis no MCU-10-0013510, Engine no IMZ-FE6688090.

4. Used Honda Saloon Accord Car, Reg no-BFT-418, Model-2003, 1990cc, Chassis no-CL7-3006339, Engine No-33101802.

5. Used Mercedes Benz (AG), Reg No-AB-1001, Model-1991-02, 2999cc, Chassis no-WDB1240312B476728.

6. Used Toyota Mark-II Saloon Car, Reg No-BVL-708, Model-2000, 1800HP, Chassis no-JZX110-6000922, Engine No-1JZ-075010.

7. Used Toyota AXIO-X Car-White Colour, Reg No-BFE-068, 1496cc, Model-2007, Chassis no-NZE-141-6028039, Engine no, INZ-C0360547.

8. Used Toyota Land Cruiser Jeep-Silver Colour, Reg No-BG-1131, Model No-1989, 3400cc, Chassis No-BJ60-023765, Engine No, 3B-1098887( As Per Reg Book) Diesel.

9. Used Toyota Saloon Car XE, Model no-1999, 1500cc, Colour Red, Chassis No-AE-100-5171778, Engine-SA-FE-1500cc.

10. Used Toyota Premio Saloon Car, Reg No-BFM-306, Model No-2004, Chassis No-AZT240-0017447, Engine No- 1AZ -4802097.

11. Used Toyota Mark-X Car, Reg No- BBC-301, Model No-200used5, Chassis No-GRX-120-0042956, Engine No- 4GR-FSE-2499cc.

12. Used Toyota Crown Royal Saloon (G) Car, Reg no- BEZ-998, Model 2005, Chassis No. GRS 182-1015624, Engine no 0123426-2994cc.

13. Used Toyota Land Cruiser Jeep, Reg no. LEB-06-2007, Model 1996-2982cc-silver colour, Chassis No VZ95-0004948, Engine No. IKZC679955.

14. Used Toyota Premio Car, Model 2005, Reg No. AAQ-945-Qta, Chassis No ZZT-240-5041761, Engine No. 1ZZFE-2200724, 1794cc, white colour.

15. Used Toyota Surf Jeep, Model 2007, Reg no- BF-9925, Chassis No TRN210-0002425, Engine no 2TR-0341543, 2697cc, tearl white.

16. Used Toyota Land Cruiser Jeep, Model 2004, Reg no JAG-345, chassis no KDJ121-0001884, Engine no 1KD-1184169,2982cc.

17. Used Toyota Land Cruiser Jeep, Model-2003, Reg no BF-8255, Chassis no UZJ100-0144369, Engine no 2UZ-FE9091472, 4700cc, white.

18. Used Mercedes Benz Saloon Car, Model-2007, chassis no WDD2193222A117436, Engine no 64292040471958, 3200cc, Black.

June 15, 2019
Commissioners IR empowered to conduct audit of taxpayers every year

KARACHI: Commissioners of Inland Revenue have been empowered to conduct audit of a registered taxpayer every year after removal of restriction through Finance Bill 2019.

Through Finance Act, 2018 a restriction was imposed on offices of the Federal Board of Revenue (FBR) under which they would conduct audit of taxpayers once in every three years.

However, the Finance Bill 2019 proposed to delete the proviso which was introduced through Finance Act last year.

Experts at EY Ford Rhodes Chartered Accountants said that certain taxpayers challenged the audit proceedings under Section 25 where sales tax audit had already been conducted during any of the last three years on the premise that the amendment introduced through the Finance Act, 2018 was procedural change in law and was applicable retrospectively.

Recently, the Honorable Lahore High Court has adjudged the matter in favor of the taxpayer. It appears that the proposed deletion of the third proviso to Section 25 will neutralize the judgment of the Honorable Lahore High Court.

June 15, 2019
Commercial importers to file income returns after removal of FTR

ISLAMABAD: Commercial importers will require to file return of income and statement of assets to the tax authorities after the removal of final tax regime.

Tax authorities said that the commercial importers would require to submit details of imports and source of payment for opening the letter of credit (LCs) through their returns.

According to budget commentary by EY Ford Rhodes on Finance Bill, 2019, before the Finance Act, 2018, tax required to be collected under Section 148 on import of plastic raw material imported by an industrial undertaking, falling under PCT headings 39.01 to 39.12, edible oils and packing material is treated as minimum tax.

Furthermore, tax required to be collected on import of goods that are sold in the same condition as they were when imported was treated as final tax.

The Finance Act, 2018 brought a substantive conceptual shift with respect to taxation of commercial importers whereby such tax collection was deemed to be “minimum tax” in respect of such importers.

Due to the aforesaid change in taxability of commercial importers, there were grave concerns shown by the above sector, as this change would have required the commercial importers to declare the financial results for comparison of tax on profits to the minimum tax on imports.

As a result of strong lobbying by commercial importers, amendments were made in Section 148 through the Finance Supplementary (Second Amendment) Act, 2019 whereby tax collected at import stage from commercial importers was again treated as final discharge of tax liability of such importers.

“The Finance Bill 2019 now proposes to restore the position as stood after the amendments made through the Finance Act, 2018 to change the character of such tax collection from “final tax” to “minimum tax”.

“Such commercial importers, pursuant to the proposed amendments will now be required to file a return of income instead of filing a statement in terms of Section 115 of the Ordinance.”

The Bill also proposes amendments in Sub-section (8A) of Section 148 whereby tax collected at the time of import of ships by ship-breakers is also to be treated as ‘minimum tax’.

June 15, 2019