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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.

  • FBR grants performance allowance to officials of MCC Preventive Peshawar

    FBR grants performance allowance to officials of MCC Preventive Peshawar

    ISLAMABAD: Federal Board of Revenue (FBR) has granted performance allowance equivalent to 100 percent of minimum of basic pay to Customs officials posted at Model Customs Collectorate (Preventive) Peshawar.

    In a notification issued on Tuesday, the FBR granted following inspectors of BS-16 of MCC Preventive Peshawar, who have been selected through the process of internal job posting, performance allowance equal to 100 percent of minimum of their basic pay (in pay scale 2011) with effect from October 07, 2019:

    01. Ilyas Iqbal

    02. Shahroz Khaliq

    03. Shah Fahad Khan

    04. Zia-ur-Rehman

    Grant of Performance Allowance will be governed through the terms and conditions laid down vide Circular No. 6(96)S(BIC)/2013-14 dated 06.03.2015 to be read with Para-10 of Finance Division’s O.M.No.1(3)/Imp/2015-360 dated 07.07.2015. The allowance will be discontinued in case prescribed terms and conditions are not fulfilled within one month from the date of issuance of this notification.

  • Wealth Statement Form: mandatory for filing along with annual return

    Wealth Statement Form: mandatory for filing along with annual return

    KARACHI: Filing of wealth statement is mandatory for making annual return form valid. Taxpayers are required to file asset declaration under Section 116 of Income Tax Ordinance, 2001.

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  • No legal proceeding against customs officials while exercising powers

    No legal proceeding against customs officials while exercising powers

    KARACHI: Customs laws protect officials from legal proceedings in case anything done in good faith while exercising powers.

    The FBR issued Customs Act, 1969 updated till June 30, 2019 incorporating amendment brought through Finance Act, 2019.

    Section 217 of the Customs Act, 1969 provides protection of action taken under the Act.

    Section 217: Protection of action taken under the Act

    Sub-Section (1) :No suit, prosecution or other legal proceeding shall lie against the Federal Government or any public servant for anything which is done or intended to be done in good faith in pursuance of this Act or the rules and notwithstanding anything in any other law for the time being in force no investigation or enquiry shall be undertaken or initiated by any governmental agency against any officer or official for anything done in his official capacity under this Act, rules, instructions or directions made or issued thereunder without the prior approval of the Board.
    Sub-Section (2): No suit shall be brought in any civil court to set aside or modify any order passed, any assessment made, any tax levied, any penalty imposed or collection of any tax made under this Act.

    Section 218: Notice of proceedings

    No proceeding in a court other than a suit shall be commenced against any officer of customs or any other person exercising any powers conferred or discharging any duties imposed by or under this Act for anything purporting to be done in pursuance of the provisions of this Act or the rules without giving to such officer or person a month’s previous notice in writing of the intended proceeding and of the cause thereof; or after the expiration of one year from the accrual of such cause:

    Provided that this section shall not be deemed to apply in the case of the prosecution of an officer of customs or such other person for an offence punishable under this Act.

  • Sale tax refunds to be released on declared stock statement: FBR

    Sale tax refunds to be released on declared stock statement: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday said that refunds will be issued only on stock statement declared by sales tax registered persons.

    The FBR issued Sales Tax Circular No. 04 of 2019 to explain the issuance of refund payment under FASTER refund module.

    The FBR said that refund will be processed on the basis of entries in Annex-H.

    Annexure H is a stock statement declared by a registered taxpayer through his return.

    According to the FBR this annexure is mandatory for refund claimants and they may submit this statement within 120 days from due date of return filing of particular tax period; other registered persons are encouraged to provide these details.

    The system will show and fill the relevant columns of those items whose closing balance will be greater than zero in proceeding return, but the registered person may add the new items and provide their data manually. The column wise filing details are as follows:

    This annexure will be mandatory for refund claimants who will claim any amount of refund at serial 30 of main return and they may submit this statement within 120 days from due date of return filing of particular tax period.

    In the latest circular No. 4, the FBR said that in wake of rescission of SRO 1125(I)/2011, it had committed with the exporters of the export oriented sectors i.e. textiles, leather, carpets, sports goods and surgical goods, that refunds shall be paid within 72 hours of filing of refund claim.

    For this purpose, FASTER refund module has been developed, which will process claims of exporters of five export-oriented sectors for the tax period July, 2019, and onwards.

    FBR has earlier clarified that submission of Annex-H, which is a form in the monthly sales tax return, shall be treated as submission of refund claim.

    It is added that the number of refund claims received is not significant. The exporters are facing some difficulties in filing of their tax refund claims (Annex-H) under FASTER. Many claimants have approached the Board with request that they may be allowed revision of their return on the ground that the entries made in Annex-F do not match with those in Annex-H.

    It is accordingly clarified that refund is processed on the basis of entries in Annex-H. The entries in Annex-F have no bearing on refund claim except that carry forward of value addition tax is excluded from refund amount.

    Accordingly, the claimants are advised not to revise the returns on the ground that entries in Annex-F do not match with those in Annex-H.

    They should submit Annex-H, if not already submitted so that their claims can be processed.

    Further, field formations are advised not to draw an adverse inference if the Annex-F does not match with Annex-H in case of monthly returns already submitted.

  • Tax collected on prize bond winning to be final

    Tax collected on prize bond winning to be final

    KARACHI: The withholding tax collected on winning of prize bond shall be final tax liability either it is collected from person appeared on Active Taxpayers List (ATL) or not.

    Sources in Federal Board of Revenue (FBR) said that the withholding tax collected on winning of prize bonds may not be adjusted against the total tax liability of a taxpayer.

    Similarly, the withholding tax deducted on winning from a raffle, lottery or winning a quiz, prize offered by companies will also not be adjustable.

    The collection of tax has been made under Section 156 of Income Tax Ordinance, 2001. While from tax year 2020 the withholding tax under this section has been increased by 100 percent for those persons not appearing on ATL.

    Section 156: Prizes and winnings

    Sub-Section (1): Every person paying 10[prize on] a prize bond, or winnings from a raffle, lottery, prize on winning a quiz, prize offered by companies for promotion of sale, or cross-word puzzle shall deduct tax from the gross amount paid at the rate specified in Division VI of Part III of the First Schedule.

    Sub-Section (2): Where a prize, referred to in sub-section (1), is not in cash, the person while giving the prize shall collect tax on the fair market value of the prize.

    Sub-Section (3): The tax deductible under sub-section (1) or collected under sub-section (2) shall be final tax on the income from prizes or winnings referred to in the said sub-sections.

    The tax rate as specified under Division VI of Part III of the First Schedule of Income Tax Ordinance, 2001, shall be:

    (1) The rate of tax to be deducted under section 156 on a prize on prize bond or cross-word puzzle shall be 15 percent of the gross amount paid.

    (2) The rate of tax to be deducted under section 156 on winnings from a raffle, lottery, prize on winning a quiz, prize offered by a company for promotion of sale, shall be 20 percent of the gross amount paid.

    However, with the introduction of Tenth Schedule of Income Tax Ordinance, 2001 the tax rate to be collected on such winning will be increased by 100 percent from persons not appearing on the ATL.

    Therefore the tax rate on winning prize bond from person not appearing on ATL will be 30 percent. Similarly, the rate of tax will be 40 percent from persons wining winnings from a raffle, lottery, prize on winning a quiz, prize offered by a company for promotion of sale.

  • No refund, input adjustment to be entertained on invoice issued prior or after of blacklisting

    No refund, input adjustment to be entertained on invoice issued prior or after of blacklisting

    KARACHI: Federal Board of Revenue (FBR) said invoices issued by a person prior or after blacklisting for sales tax will not be entertained for refunds or input adjustment.

    The FBR issued Sales Tax Act, 1990 updated till June 30, 2019 incorporating amendments brought through Finance Act, 2019.

    Section 21 of the Act explained blacklisting and suspension of a taxpayer for sales tax.

    Section 21: De-registration, blacklisting and suspension of registration

    Sub-Section (1): The Board or any officer, authorized in this behalf, may subject to the rules, de-register a registered person or such class of registered persons not required to be registered under this Act.

    Sub-Section (2): Notwithstanding anything contained in this Act, in cases where the Commissioner is satisfied that a registered person is found to have issued fake invoices or has otherwise committed tax fraud, he may blacklist such person or suspend his registration in accordance with such procedure as the Board may by notification in the official Gazette, prescribe.

    Sub-Section (3): During the period of suspension of registration, the invoices issued by such person shall not be entertained for the purposes of sales tax refund or input tax credit, and once such person is black listed, the refund or input tax credit claimed against the invoices issued by him, whether prior or after such black listing, shall be rejected through a self-speaking appealable order and after affording an opportunity of being heard to such person.

    Sub-Section (4): Notwithstanding anything contained in this Act, where the Board, the concerned Commissioner or any officer authorized by the Board in this behalf has reasons to believe that a registered person is engaged in issuing fake or flying invoices, claiming fraudulent input tax or refunds, does not physically exist or conduct actual business, or is committing any other fraudulent activity, the Board, concerned Commissioner or such Officer may after recording reasons in writing, block the refunds or input tax adjustments of such person and direct the concerned Commissioner having jurisdiction for further investigation and appropriate legal action.

  • Harsh penalties for pilferage of transshipped goods

    Harsh penalties for pilferage of transshipped goods

    KARACHI: Customs laws has defined harsh penalties for pilferage or replaced enroute of transshipment of goods without payment of duty.

    Federal Board of Revenue (FBR) issued Customs Act, 1960 updated till June 30, 2019 incorporating changes brought through Finance Act, 2019.

    According to the customs laws

    If any goods which are loaded for transshipment, are pilfered, replaced en-route or failed to reach the port of destination, or any person transships goods not allowed to be transshipped;

    Then such goods and the conveyance illegally carrying these goods shall be liable to confiscation and any person including the custodian involved in the offence and the bonded carrier shall be liable to a penalty not exceeding ten times the value of the goods and he shall further be liable, upon conviction by a Special Judge, to imprisonment for a term not exceeding seven years.

    If any person contravenes any rule relating to transshipment other than mentioned above;

    Then such person including the custodian and the inland carrier shall be liable to penalty not exceeding five hundred thousand rupees or three times the amount of duties and taxes involved.

    Under Section 121 of the Act, the transshipment of goods without payment of duty has been allowed.

    Section 121: Transshipment of goods without payment of duty

    Sub-Section (1): Subject to the provisions of section 15 and the rules, the appropriate officer may, on application by the owner of any goods imported at any customs-station and specially and distinctly manifested at the time of importation as for transshipment to some other customs-station or foreign destination, grant leave to transship the same without payment of duty, if any, chargeable on such goods with or without any security or bond for the due arrival and entry of the goods at the customs-station of destination:

    Provided that at customs-station where the Custom Computerized System, is operational, the system may automatically authorize transshipment to other customs-station subject to risk selectivity criteria.

    Sub-Section (2): The Board may, subject to rules and such conditions as it may deem fit to impose, authorize certain carriers to transport goods under the multimodal, scheme. Goods transported under the multimodal scheme shall be specially and distinctly manifested at the time of importation as for transshipment to some other customs-station or foreign destination and shall not –

    (a) require distinct permission for transshipment from the customs-station of first entry into the country to be transported to the customs-station of destination. The principal carrier issuing the multimodal bill of lading or air way bill will be responsible for the sanctity of the cargo during transportation between the customs-station of first entry into the country to the customs-station of destination; and

    (b) be subject to the risk management system at the customs station of first entry.

    Sub-Section (3): The Board may, subject to such conditions as it may deem fit, grant license to any carrier to carry goods under the multimodal scheme.

  • MCC Islamabad announces auction of vehicles on Oct 22

    MCC Islamabad announces auction of vehicles on Oct 22

    ISLAMABAD: Model Customs Collectorate (MCC) Islamabad has announced auction of vehicles on October 22, 2019 including those announced by the prime minister under austerity measure.

    List of vehicles to be offered for auction on October 22, 2019 at State Warehouse:

    01. Mercedes Benz Car E280CDI Model 2006, Chassis No. WDB211020B006418

    02. Commando Jeep, Model 1989, Chassis No. E825-90320

    03. Toyota Corolla Spacio Car Automatic (Semi Bullet Proof) Model 2009, Chassis No. ZZE142-7403600

    04. Toyota Corona Car, Model 1998, Chassis No. SB153ABN00E012424

    05. Toyota Passo Car, Model 2004, Chassis No. KGC10-0022583

    06. Toyota Mark-X, Model 2005, Chassis No. GRX120-0041595

    07. Toyota Cressida, Model 1991, Chassis No. RX80-0021897

    08. Toyota Vitz Car, Model 2004, Chassis No. SP10-0131039

    09. Toyota Corolla Car, Model 2008, Chassis No. ZZE142-7401050

    10. Honda Motorcycle 125, Model 2012, Chassis No. U308915

    11. Mitsubishi Pajero, Model 2000, Chassis No. JMYONV460WJ001099

    12. Toyota Hiace, Model 1999, Chassis No. LH1140029610

    13. Toyota Land Cruiser, Model 2003, Chassis No. JTEBK29J60003281

    14. Toyota Land Cruiser, Model 2004, Chassis No. JTEBK29J500011811

    15. Toyota Hilux Pickup, Model 2002, Chassis No. JTFDEEE626100094494

    16. Toyota Cammary, Model 2005, Chassis No. JTDBF38K600169924

    17. Toyota Hiace, Model 2005, Chassis No. JTFJK02P100001190

    18. Toyota Mark-X, Model 2005, Chassis No. GRX120-002992

    19. Toyota Land Cruiser, Model 1995

    20. Toyota Crown, Model 1993

    21. KIA Sportage, Model 2005

    22. Toyota Corolla, Model 1999

    List of PM House Vehicles for auction to be held on October 22, 2019

    01. BMW Car 760U, Model 2014, Chassis No. CH-WBAHP42000DY99225

    02. BMW Car 760U Model 2014, Chassis No. CH-EBAHP42020DY99226

    03. Toyota Land Crusier, Model 2008, Chassis No. JTECB01J301032994

    04. Toyota Land Cruiser, Model 2008, Chassis No. JTEEV73J400002043

    05. Mercedes Benz Car (Protected), Model 2005, Chassis No. WDB-2201752A473693

    06. Mercedes Benz Car (Protected), Model 2005, Chassis No. WDB-2201762A457073

    07. Mercedes Benz Car (Protected), Model 2005, Chassis No. WDB-2201752A476036

    08. Mercedes Benz Car (Protected) Model 2005, Chassis No. WDB-2201752A475123

    09. Stretched Limousine Car (Protected) Model 2005, Chassis No. WDB-2201752A457643

    10. Toyota Lexus Jeep (Protected), Model 2005, Chassis No. JTJHT00W633531475

    11. Mercedes Benz Car (Protected) Model 2005, Chassis No. WDB-2201762A457435

    12. Mitsubishi Lancer S/Saloon, Model 1994, Chassis No. CSNCBIRU00812

    13. Lexus Jeep, Model 2006, Chassis No. JTJHT00W564013596

  • Overseas Pakistanis can bring vehicles under three schemes

    Overseas Pakistanis can bring vehicles under three schemes

    KARACHI: Pakistani nationals residing abroad including dual nationals can import old and used vehicles into Pakistan under three different schemes.

    Federal Board of Revenue (FBR) said that these schemes are included: Personal Baggage; Gift Scheme; Transfer of Residence.

    The FBR further said cars not older than 03 years and other vehicles not older than 05 years can be imported under these schemes.

    The structure of duty and taxes under these 03 schemes remains the same.

    Motorcycles and Scooters can only be imported under Transfer of Residence Scheme, the FBR said.

    Students receiving remittance from Pakistan, non-earning members of the Pakistani nationals living abroad and those who have imported, gifted or received a vehicle in past two years are not eligible under these schemes.

    Old and used Vehicles of Asian Makes under these 03 schemes can be imported against the payment of the following amounts:

    01.Upto 800 ccUS$ 4,800
    02.801cc to 1000ccUS$6,000
    03.From 1001 cc to 1300ccUS$13,200
    04.From 1301cc to 1500ccUS$18,590
    05.From 1501cc to 1600ccUS$22,550
    06.From 1601cc to 1800cc (Excluding Jeeps)US$27,940

    Depreciation in duties & taxes at the rate of 1% per month is admissible according to the age of the vehicle.

    The FBR said that 50 percent exemption from duty & taxes is admissible on import of Hybrid Electric Vehicles (HEVs) of engine capacity up to 1800cc and 25 percent exemption from duty & taxes is admissible on import of HEVs of engine capacity from 1800cc to 2500cc.

    IMPORT OF DUTY FREE CAR FOR DISABLED PERSONS
    Duty free import of a car of engine of capacity up to 1350 cc in new condition to disabled person subject to recommendations of the Federal Board for Disabled Persons.

  • Penalties for smuggling under Pakistan’s customs law

    Penalties for smuggling under Pakistan’s customs law

    KARACHI: Award of death sentence has been prescribed for smuggling of narcotic drugs under Customs law of Pakistan.

    The Federal Board of Revenue (FBR) updated Customs Act, 1969 updated till June 30, 2019 which explained penalties for different penalties.

    According Customs Act, 1969:

    • If any goods be smuggled into or out of Pakistan:

    Such goods shall be liable to confiscation and any person concerned in the offence shall be liable to a penalty not exceeding ten times the value of the goods; and upon conviction by a Special Judge he shall further be liable to imprisonment for a term not exceeding fourteen years and to fine not exceeding ten times the value of such goods:

    Provided that, in the case of such goods as may be notified by the Federal Government in the official Gazette, the sentence of imprisonment shall not be less than five years, and the whole or any part of his property shall also be liable to confiscation in accordance with the provisions of the Prevention of Smuggling Act,1977.

    • If the smuggled goods are narcotics drugs, psychotropic substances or controlled substances,-

    such goods shall be liable to confiscation and any person concerned in the offence shall be liable to –

    (a) if the quantity of the narcotic drug, psychotropic substance of controlled substance is one hundred grams or less;

    • imprisonment which may extend to two years, or with fine, or with both;
    • imprisonment which may extend to seven years and shall also be liable to fine;

    (b) if the quantity of the narcotic drug, psychotropic substance or controlled substance exceeds one hundred grams but does not exceed one kilogram;

    death or imprisonment for life, or imprisonment for a term which may extend to fourteen years and shall also be liable to fine which may be up to one million rupees;

    (c) if the quantity of the narcotic drug, psychotropic substance or controlled substance exceeds the limit specified in clause (b);

    Provided that, if the quantity exceeds ten kilograms the punishment shall not be less than imprisonment for life.