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FBR reshuffles senior customs officers in BS-20-22

ISLAMABAD: Federal Board of Revenue (FBR) on Friday reshuffled senior officers of Pakistan Customs Service (PCS) and notified transfers and postings with immediate effect and until further orders.

Notification of following officers has been issued:

01. Javed Ghani (PCS/BS-22), who is currently Member (Customs Policy), FBR (HQ), Islamabad, has been assigned additional charge of Member Customs (Operations), FBR (HQ), Islamabad.

02. Jawwad Uwais Agha (PCS/BS-21) has been transferred and posted as Member FBR (HQ) Islamabad from the post of Member (Customs Operations),FBR (HQ) Islamabad.

03. Muhammad Saleem (PCS/BS-20) has been transferred and posted as Collector, MCC (Appraisement), Peshawar from the post of Collector, MCC (Preventive), Multan.

04. Khaleel Ibrahim Yuousfani (PCS/BS-20) has been transferred and posted as Collector MCC (Preventive), Peshawar from the post of Collector, Collectorate of Customs (Appeals), Karachi.

05. Muhammad Yaqoob Mako (PCS/BS-20) has been transferred and posted as Collector, MCC (Preventive) Quetta from the post of Collector, MCC, Gawadar. He will also look after the charge of the Collector MCC, Gawadar.

06.Irfan-ur-Rehman (PCS/BS-20) has been transferred and posted as Collector, MCC (Appraisement), Quetta from the post of Director, Directorate of Transit, Trade, Quetta. He will also look after the charge of Directorate of Transit Trade, Quetta

07. Fayyaz Anwar (PCS/BS-20) has been transferred and posted as Collector MCC (Preventive), Multan from the post of Director, Directorate of I&I Gawadar.

08. Imtiaz Ahmed Sheikh (PCS/BS-20), who is current posted as Collector, MCC (Export) Karachi. He will also look after the charge of MCC (Export) PMBQ, Karachi.

09. Irfan Javed (PCS/BS-20), who is currently posted as Director, Directorate of I&I Karachi. He will also look after the charge of the post of Director, Directorate of I&I Gawadar.

10. Asif Saeed Khan Lughmani (PCS/BS-20) has been transferred and posted as Chief, FBR (HQ), Islamabad from the post of Collector MCC (Preventive) Peshawar.

11. Ihsan Ali Shah (PCS/BS-20) has been transferred and posted as Chief, FBR (HQ), Islamabad from the post of Collector, MCC (Appraisement), Peshawar.

12. Mr. Iftikhar Ahmed (PCS/BS-20) has been transferred and posted as Chief, FBR (HQ), Islamabad from the post of Collector, MCC (Preventive), Quetta.

13. Raza (PCS/BS-20) has been transferred and posted as Chief, FBR (HQ), Islamabad from the post of Collector, MCC (Appraisement), Quetta.

The FBR said that the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.

January 31, 2020
FBR extends return filing date up to February 28

ISLAMABAD: Federal Board of Revenue (FBR) on Friday granted sixth consecutive extension for filing income tax return for tax year 2019 up to February 28, 2020.

The FBR issued Income Tax Circular No. 18 of 2019 for extension in date of filing income tax returns/statements for tax year 2019.

The FBR said that the date of filing of return of total income / statements of final taxation for individuals and associations of persons for the tax year 2019 which was due on September 30, 2019 and extended up to December 31, 2019 has been extended up to February 28, 2020.

The FBR further said that the date of filing of return of total income/statements of final taxation for companies for the tax year 2019, which was due on September 30, 2019 and extended up to December 31, 2019, in respect of those companies who have paid 90 percent of the admitted tax liability on or before September 30, 2019, has been allowed further extension up to February 28, 2020.

The date of filing of return of total income/statements of final taxation for companies for tax year 2019, which was due on December 31, 2019 has also been extended up to February 28, 2020.

January 31, 2020
Senior tax officers oppose return filing date extension

KARACHI: Senior officers of Federal Board of Revenue (FBR) opposed to further extend the last date for filing income tax return for tax year 2019.

The last date for filing annual return for tax year 2019 is expiring today evening i.e. January 31, 2020. The FBR already granted date extension around five times so far for filing the annual return.

The senior FBR officers at various tax offices have said that there was no need to further extend the date for filing the income tax returns because sufficient returns had been received by the FBR.

They further said that the deadline has been given to ensure compliance by taxpayers. They said that returns will be filed in case further time is granted.

The officers said that time and again extension in return filing date hurt the flow of working at the FBR.

They said that the FBR should invoke penal action on late return filers in order to ensure future compliance.

For the tax year 2018 the FBR extended the date for filing income tax returns up to August 09, 2019. Even to date the FBR is receiving income tax returns for the tax year 2018.

To an estimate the FBR received around 2.6 million returns for tax year 2019 till January 29, 2020. The FBR is expecting to receive 2.7 million returns by January 31, 2020, according to FBR sources.

The sources said that the FBR had estimated around 3 million returns for tax year 2019. The FBR will issue Active Taxpayers List (ATL) for tax year 2019 on March 01, 2020 and this list will remain applicable till February 28, 2021. Therefore, the return filing for the tax year 2019 will continue till the issuance of ATL for tax year 2020.

The ATL for tax year 2018 will expire on February 29, 2020. The FBR has received around 2.76 million returns for tax year 2018 as filing of returns for this year is continued so far.

January 31, 2020
CNIC condition on purchases above Rs50,000 applies from tomorrow

ISLAMABAD: The condition of Computerized National Identity Card (CNIC) on purchases above Rs50,000 shall apply from tomorrow (February 01, 2020) as relaxation provided to small traders is expiring today.

The Federal Board of Revenue (FBR) and representatives of traders’ associations on October 30, 2019 reached on an agreement under which the application of CNIC information was deferred till January 31, 2020.

Through Finance Act, 2019, it was made mandatory that a registered person making a taxable supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars, in Urdu or English language, namely: –

(a) name, address and registration number of the supplier;

(b) name, address and registration, number of the recipient and NIC or NTN of the unregistered person, as the case may be, excluding supplies made by a retailer where the transaction value inclusive of sales tax amount does not exceed rupees fifty thousand, if sale is being made to an ordinary consumer.

Explanation. – For the purpose of this clause, ordinary consumer means a person who is buying the goods for his own consumption and not for the purpose of re-sale or processing.

The condition of CNIC or NTN was made mandatory from August 01, 2019.

However, on opposition from small traders the government after an agreement on October 30, 2019, postponed the applicability of CNIC till January 31, 2020.

The FBR on October 04, 2019 issued definition / rules related to condition of CNIC.

The FBR said that keeping in view the problems reported by the registered persons is ensuring proper identity of the buyer to fulfil the requirement of reporting NTN/NIC of the buyer in terms of section 23 of the Sales Tax Act, 1990, it is directed that the NIC/NTN of the buyer with respect to taxable supplies to an unregistered person shall be deemed to have been reported in good faith by the supplier provided that:

(a) The tax invoice complies with the requirements of section 23(b) of the Act.

(b) Payment made by or on behalf of the unregistered purchaser of the amount of the tax invoice, inclusive of sales tax and applicable further tax, is deposited into the supplier’s declared business bank account.

(c) The NIC provided by the purchaser is found authenticated by the National Data and Registration Authority (NADRA).

(d) The NIC/NTN provided is not of the employee of the seller or of his associates as defined under the Income Tax Ordinance, 2001.

The issuance of a show cause notice to a registered person being a seller on account of any matter arising out of the NIC provided by a purchaser shall not be made without the prior approval of the Member (IR-Operations), FBR after providing an opportunity to be heard.

January 31, 2020
FBR links 5,783 POS of retailers with online system

ISLAMABAD: Federal Board of Revenue (FBR) has integrated 5,783 Point of Sales (POS) of 286 retailers so far with the hectic efforts of field formation, FBR spokesman said on Thursday.

The spokesman said that the system had been made fully functional. The entries made through POS have been directly received by the FBR through online system.

In order to create linkage with the FBR online system, retailers are required to download a software which is available on the FBR’s official website.

Once the software is downloaded and activated the transactions made by a retailer appeared on FBR system and stored in its database, the spokesman added.

All tier-1 retailers are required to integrate all their POSs with FBR’s computerized system.

‘Tier-1 retailer’ is defined in section 2(43A) of the Sales Tax Act, 1990, to be a person who falls in any of the following categories:

(a) a retailer operating as a unit of a national or international chain of stores;

(b) a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks;

(c) a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees twelve hundred thousand;

(d) a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers”; and

(e) a retailer, whose shop measures one thousand square feet in area or more.

POS integration is mandatory for all tier-1 retailers irrespective of the items they are dealing in.

All tier-1 retailers whether dealing in textile and leather items or any other item are required by law to integrate their POSs with FBR’s system.

The rate of sales tax for items sold by integrated retailers shall be the same as for all other suppliers as provided under the Sales Tax Act, 1990.

Only exception is for locally manufactured textile and leather items, which if sold by integrated retailers are subject to concessionary rate of 14 percent, and if sold by any other supplier are subject to 17 percent standard sales tax.

January 30, 2020
SRB exempts sales tax on low cost housing projects

KARACHI: The Sindh government has exempted sales tax on services provided or rendered to low cost housing projects funded by the federal government or Sindh government.

Sindh Revenue Board (SRB) issued notification No. 3-4/04/2020 dated January 21, 2020.

According to the notification: “construction relating to such of the low cost affordable public housing projects as are sponsored and funded by the federal government or by the government of Sindh subject to the condition that the houses are built or constructed on plots of up to 125 square yards or the covered area of each of the apartments and flats, so built or constructed under the project, does not exceed 900 square feet.”

January 30, 2020
FBR invites suggestions for phasing out tax exemption, concessions

ISLAMABAD: Federal Board of Revenue (FBR) has invited suggestions from business community and other stakeholders for elimination of tax exemption and concessions.

The FBR on Thursday issued a notification for inviting income tax proposals for budget 2020/2021.

The FBR invited proposals from the stakeholders for phasing out tax concessions and exemptions.

It said that the FBR is currently engaged in the formulation of proposals for the Finance Bill 2020. In order to benefit from the collective wisdom of all the stakeholders for the improvement of tax policy, proposals have been invited for the upcoming budget 2020/2021.

The FBR said that input/suggestions in the following areas shall be appreciated as a genuine contribution towards framing or a broad based and workable tax policy:

i. Broadening of tax base for a wider participation in revenue generation efforts;

ii. Taxation of real income on progressive basis;

iii. Phasing out of tax concessions and exemptions;

iv. Removal of tax distortions and anomalies;

v. Facilitation of taxpayers and ease of doing business;

vi. Promoting equity in taxation by introducing measures where incidence of tax is higher or affluent classes.

The FBR asked all the stakeholders to send their proposals by February 07, 2020.

January 30, 2020
FBR asks customs to provide clearance details of commercial importers

KARACHI: Federal Board of Revenue (FBR) has directed customs authorities to provide details of commercial importers who made clearance during first half of current fiscal year.

The FBR sources on Thursday said that the collector of customs is required to collect income advance tax at the rate specified as withholding agent from commercial importers.

Under the law withholding agents are required to provide details of persons whose tax was deducted.

The sources said that the customs authorities as per the law to provide details of all those persons whose tax had been deducted at clearance stage on January 31, 2020.

The sources said that transactions made by commercial importers were very important for broadening of tax base.

Previously, the tax deducted at import stage was final tax and commercial importers were escaped from many questioning.

Through Finance Act, 2018, a minimum tax regime was introduced for commercial importers but due to strong lobby the amendment was withdrawn through Supplementary (Second Amendment) Act, 2019.

Through Finance Act, 2019 the minimum tax was reintroduced for commercial importers and ship breakers for tax collected at import stage.

The intention of legislature to promote documentation of economy by abolishing final tax regime is a positive step.

However, the policy should be implemented consistently to avoid unnecessary confusion, which affects the decision making of the business community.

FBR sources said that it was estimated huge amount of undocumented money was involved in payment of imports. The sources said that the commercial importers would file complete income tax returns and declaration of assets for tax year 2020.

They further said that the FBR and its field offices now can select cases of commercial importers for conducting audit and ask source of money for making payments against imports.

January 30, 2020
KTBA highlights anomalies in claiming input tax adjustment

KARACHI: Karachi Tax Bar Association (KTBA) has highlighted impediments face by taxpayers in claiming input sales tax adjustment.

The KTBA in a letter to Federal Board of Revenue (FBR) on Wednesday said that after introduction of STRIVe, there have arisen certain practical impediments at the time of filing sales tax returns to avail the exclusion from Section 8B of the Act read with SRO 1190 of 2019 dated 02/10/2019.

The option of exclusion as provided under SRO 1190(I)/2019 dated 02/10/2019 has been allowed only to certain taxpayers who are enlisted in the list of exclusion as provided thereunder while, earlier it was provided under SRO 647(I)/2007 in general.

Consequently, the taxpayers who are engaged in multiple businesses or have not updated their tax profiles are not allowed to avail the benefit of the aforesaid exclusion despite the fact that their activity is excluded from Section 8B of the Act.

In addition to the above a clarification was also issued through STM (IR) letter C.No.1(211)STM/2019/272646-12 dated 14/11/2019, whereby the taxpayers have been required to update their tax profiles to avail the benefits of SRO 1190(I)/2019 dated 02/10/2019.

The situation on the other hand is further deteriorated as there is no option in the Tax Asaan application for “change in particular”, due to which complications have cropped up for taxpayers to update their tax profiles as required. Presently, the taxpayers are left with no other option but to file an application for change in particulars on the line of previous prescribed procedure whereby a ‘No Objection Certification (NOC)’ was required to be issued by the concerned Commissioner to the ‘Local Registration Office’.

This consumes considerable time. What has been observed that even after updating the tax profile, certain taxpayers, mostly importer, are not getting exclusions from Section 8B.

It is also essential to highlight that taxpayers do not have clear understanding about the business classification available on IRIS portal.

While updating the tax profile, taxpayers are unable to select their applicable business category from the IRIS portal as FBR has not provided any guideline about the correct classification of business category of respective businesses.

The taxpayers are also not getting any support from the FBR Helpline as the Support Officer at the Helpline are themselves not clear and often provide different suggestions through telephone, email etc.

Consequent to above lack of training or knowledge, the taxpayers are unable to avail the above benefit even after updating their tax profile.

On a slightly different note, it also must be allowed for all the categories to whom it is applicable, especially in the following situations:

(i) Persons who have paid minimum value addition tax at import stage are excluded from Section 8B, however, if the goods are not imported in any tax period but supplies are made from opening stock of such imports, the system does not allow the exclusions from Section 8B. In this case, the exclusion is only allowed in the tax period in which imports are made but not available in the subsequent periods when the stock of such imported goods are sold.

This is totally bizarre and is against the scheme of the Section 8B. It is, therefore, suggested to allow the exclusion throughout the year for 12 tax periods if the taxpayer is a “commercial importer”.

(ii) Sales tax paid on Fixed assets is also not subject to the restrictions provided under Section 8B, however, the return has not allowed the said exclusion in cases where such sales tax of fixed assets, being excess of the output tax, is carried forward to the next month.

The same is treated as part and parcel of the normal carry forward balance. It is, therefore, suggested that the sales tax on Fixed Asset must require to be separately treated as compared to the normal input tax adjustment with respect to the provision of Section 8B and in case, where input tax of fixed asset is in excess of the output tax in a tax period, it must have a separate row of carry forward balance in the returns, likewise the sales tax return provided by SRB.

The aforesaid anomalies are not more than technicalities of the system but are prone to give rise to the unnecessary litigation due to infringement of the vested right of the input tax adjustment of the taxpayers.

January 30, 2020
Return filing must for persons own immovable property above 500 square yards or 1000CC vehicle: FBR

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said that return filing is must for persons own immovable property above 500 square yards or 1000CC motor vehicles.

The FBR in a statement said that as per Income Tax Ordinance, 2001 all those individuals who owned 500 square yards or 1000CC motor vehicles are required to file annual income tax returns.

The FBR reminded persons falling within the requirement of the law to must file their returns for tax year 2019 by January 31, 2020.

The FBR extended the last date for return filing for tax year 2019 up to January 31, 2020. The FBR said that people should avail this opportunity in order to avoid harsh penal action.

As per Section 114 of Income Tax Ordinance, 2001 following class of persons or companies are required to file their annual income tax returns:

(a) every company;

(ab) every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year; or

(ac) any non-profit organization as defined in clause (36) of section 2;

(ad) any welfare institution approved under clause (58) of Part I of the Second Schedule;

(b) any person not covered by clause (a), (ab), (ac) or (ad) who,—

(i) has been charged to tax in respect of any of the two preceding tax years;

(ii) claims a loss carried forward under this Ordinance for a tax year;

(iii) owns immovable property with a land area of five hundred square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;

(iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;

(v) owns a flat having covered area of two thousand square feet or more located in a rating area;

(vi) owns a motor vehicle having engine capacity above 1000 CC;

(vii) has obtained National Tax Number; or

(viii) is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;

(ix) is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan; or

(x) every resident person being an individual required to file foreign income and assets statement under section 116A.

January 29, 2020