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  • FBR issues SOPs for over-ruling objections on refund claims

    FBR issues SOPs for over-ruling objections on refund claims

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued procedure for over-ruling objections raised by Fully Automated Sales Tax e-Refund (FASTER) in order to facilitate taxpayers in obtaining their stuck up amount.

    The FBR issued Sales Tax Circular No. 01 of 2020 / IR-Operations to unveil the Standard Procedure for Over-Ruling the STARR objections on Sales Tax Refund claims.

    The FBR said that in order to bring uniformity into the system, and avoid discretion and delays in the processing of refund there is need to issue rules for the purpose at the national level.

    Accordingly, in suppression of all previous instructions, SOPs and guidelines on the matter, the new procedure has been laid down. Under the procedure an officer not below the rank of additional commissioner-IR shall over-rule the objections raised by the electronic system after completion of all legal formalities and scrutiny of record of objections.

    The FBR issued details of objections usually pointed out by the electronic system on which the tax officer may over rule.

    The FBR, however, said that the refund claimant shall furnish soft copies of all the scanned documents which are under dispute requiring over-ruling.

    The revenue body further said that where, result of automated processing of refund claims through FASTER or ERS, the claimants are not satisfied with the outcome of automated processing including calculation of refund or carry forward amounts or amounts deferred, the claimant may apply to the FBR through concerned chief commissioner for processing of the refund claim or revision of Annexure – H mentioning the reason.

    After scrutiny of the written request of the claimant, the Chief (Projects & Refunds) may allow reprocessing of the claim or revision of Annexure-H for necessary corrections.

    The FBR said that the procedure for over-ruling has become applicable with effect from August 01, 2020.

  • FBR notifies rules to implement new tax regime for imported goods

    FBR notifies rules to implement new tax regime for imported goods

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday notified rules to implement new taxation regime on import of goods, which was introduced through Twelfth Schedule of Income Tax Ordinance, 2001.

    The FBR issued SRO 715(I)/2020 to notify the rules for implementation of new tax rates on import of goods.

    Through Finance Act, 2020 new 12th Schedule was introduced for rationalizing tax on imports by shifting from person-specific rates to goods specific rates cascaded according to  the  type of  goods,  with  tax  at 1 percent  for  capital  goods,  2 percent  for  raw  materials  and 5.5 percent  for  finished  goods  irrespective  of  status  of  the  importer.

    However,  the prevailing  concessional  rates  on  certain  items  such  as  remeltable  scrap  of  iron and  steel,  potassic  and  urea  fertilizers,  LNG,  Gold,  Cotton,  goods  that  were importable  by  manufacturers  under  the  rescinded  SRO  1125(I)/2011  dated 31.12.2011, mobile phones etc. are being maintained.

    The provisions of the new rules introduced to Income Tax Rules, 2002 will apply to addition, omission or amendment of entries in the Twelfth Schedule and application of reduced rate on goods falling under Part III of the schedule imported by persons as raw material for its own use.

    A three-member committee headed by Member Inland Revenue Policy, FBR has been constituted under the new rules. The other two members shall comprise of Member Inland Revenue Operations and Member Taxpayers Audit.

    The committee has been empowered to add in the Twelfth Schedule of the Ordinance any entry or omit any entry therefrom or amend any entry therein.

    Further, the chairperson of the committee may, suo motor or an application of a taxpayer being an importer of such goods, place a matter before the committee by way of convening a meeting including a virtual meeting or by way of circulation which shall decide the matter within sixty days.

    The FBR also issued procedure for import under an exemption certificate and a reduced rate certificate.

  • Pakistan’s fiscal deficit narrows to 8.1 percent in FY20

    Pakistan’s fiscal deficit narrows to 8.1 percent in FY20

    KARACHI: Pakistan’s budget deficit narrowed to 8.1 percent in FY20 (2019/2020) as compared with the deficit of 8.9 percent in the preceding fiscal year, according to statistics released by the ministry of finance on Wednesday.

    Analysts Topline Securities said that as the deficit is lower than the 9.1 percent of GDP envisaged by the government owing to lower utilization of the Rs1.24 trillion COVID-19 relief package. Reportedly around Rs480 billion could not be spent during the year.

    The primary deficit for the year clocked in at 1.8 percent of GDP or Rs757 billion (last year was 3.5 percent of GDP or Rs1,354 billion).

    In 4QFY20, the fiscal deficit came in at 4.3 percent of GDP compared to 9MFY20 fiscal deficit of 3.8 percent of GDP due to implications of COVID-19 on both revenues and expenditures.

    Sindh and Baluchistan recorded a budgetary surplus during FY20, with  Punjab and KPK recording budgetary deficits during the period.

    Total Revenues increased by 28 percent YoY in FY20, where the improvement was led by 257 percent YoY higher Non-Tax Revenues which includes Rs936 billion surplus profit from SBP.

    The Tax Revenues increased by only 6 percent YoY during the year, where they declined by 12 percent YoY in 4QFY20 owing to COVID-19 outbreak. The government collected 5 percent YoY higher Direct Taxes, 9 percent YoY higher Sales Tax and 42 percent YoY higher Petroleum Levy during FY20.

    In 4QFY20, as expected due to lockdown Direct Taxes and Sales Tax were down by 16 percent YoY and 15 percent YoY, respectively while Petroleum Levy was up 47 percent YoY.

    On the expenditures front, Total Expenditure increased by 16 percent YoY in FY20. Current Expenditure increased by 20 percent YoY, where Mark-up Payments were up 25 percent YoY and Defense Expenditures were up 6 percent YoY.

    In 4QFY20, Current Expenditure is up by 55 percent QoQ and 27 percent YoY due to COVID-19 related expenses.

    The Development Expenditure remained steady (-1 percent YoY) in FY20, with 4QFY20 expenses rising by 37 percent QoQ but down 21 percent YoY.

    In spite of the decline in interest rates, government interest bill increased by 24 percent QoQ and 17 percent YoY during 4QFY20 owing to greater borrowing at higher rates and interest payment schedule.

    The analysts estimated that Pakistan’s fiscal deficit to clock in at around 8.5 percent of GDP in 2020/2021 due to continuing implications of COVID-19.

  • Stocks ease ahead of apex court decision on GIDC

    Stocks ease ahead of apex court decision on GIDC

    KARACHI: The stock market ended with a decline of 86 points on Wednesday as Supreme Court of Pakistan (SCP) is scheduled to decide Gas Infrastructure Development Cess (GIDC) on August 13, 2020.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,473 points as against 40,559 points showing a decline of 86 points.

    Analysts at Arif Habib Limited said that the market added a total of 559 points during the session posting a new recent high of 41,119 points, however, selling pressure brought the index below the opening level.

    E&P, Banks, Fertilizer sector contributed to early rise in the Index. Fertilizer sector felt the heat of SC’s decision on GIDC, which is scheduled to be announced tomorrow.

    Similarly, HASCOL saw active trading with almost hitting upper circuit breaker and then lower circuit upon notice of grant of permanent license as an OMC in place of existing provisional one.

    Index level above 41k, largely prompted profit booking just before the weekend. O&GMCs topped the volumes with 105.1 million shares, followed by Cement (72.8 million) and Technology (69.7 million).

    Among scrips, HASCOL led the volumes with 87.3 million shares, followed by TRG (36.3 million) and PRL (32.1 million).

    Sectors contributing to the performance include Cement (-57 points), O&GMCs (-33 points), E&P (-29 points), Pharma (-19 points) and Inv Banks (-18 points).

    Volumes declined from 600 million shares to 591.2 million shares (-2 percent DoD). Average traded value also declined by 10 percent to reach US$ 133.6 million as against US$ 147.9 million.

    Stocks that contributed significantly to the volumes include HASCOL, TRG, PRL, UNITYR2 and MLCF, which formed 33 percent of total volumes.

    Stocks that contributed positively to the index include FFC (+60 points), HUBC (+43 points), NBP (+24 points), UBL (+19 points) and TRG (+13 points). Stocks that contributed negatively include PPL (-16 points), MCB (-16 points), LUCK (-16 points), DAWH (-14 points) and PSO (-14 points).

  • Rupee gains 20 paisas on improved export receipts

    Rupee gains 20 paisas on improved export receipts

    KARACHI: The Pak Rupee gained 20 paisas against dollar on Wednesday owing to improved inflows of export receipts and workers remittances.

    The rupee ended Rs168.07 to the dollar from previous day’s closing of Rs168.27 in interbank foreign exchange market.

    Currency experts said that inflows of export receipts and workers remittances were sufficient to support the local currency and meet demand for import and corporate payments.

    The experts said that the foreign inflows would help the local currency to further appreciate in coming days.

    The liquid foreign exchange reserves of the country increased by $651 million by week ended July 30, 2020 owing to foreign inflows.

    The total foreign exchange reserves of the country increased by $651 million to $19.563 billion by week ended July 30, 2020 as compared with $18.912 billion a week ago.

    The official foreign exchange reserves of the SBP increased by $566 million to $12.542 billion by week ended July 20, 2020 as compared with $11.976 billion a week ago.

  • Withholding sales tax regime streamlined

    Withholding sales tax regime streamlined

    ISLAMABAD: Federal Board of Revenue (FBR) has streamlined sales tax withholding regime for compelling sales tax return filing and realizing full revenue on sale/purchase.

    The FBR issued Circular No. 01 dated August 06, 2020 to explain changes made to Sales Tax Act, 1990 through Finance Act, 2020.

    The FBR said that Eleventh Schedule provides for withholding agents to deduct tax at the time of purchase from both registered and unregistered persons.

    The categories of withholding agents include Federal and Provincial Government departments, companies, public sector organizations and autonomous bodies.

    However, it has been noticed that most of the registered suppliers whose tax has been withheld do not usually file their sales tax returns and resultantly, fail to pay their remaining amount of 4/5th tax in case 1/5th of the tax involved is withheld by the purchaser as aforementioned.

    To enforce returns by the such suppliers and payment of remaining tax involved, the whole concept of withholding has now been linked to the supplier (withholdee) being on the ATL list of the FBR or otherwise.

    The persons other than Active Taxpayers shall be given the same treatment as was previously accorded to unregistered persons i.e. government and public sector enterprises shall deduct whole of the tax involved in case of supplies made by persons other than those on ATL and the companies shall deduct 5 percent of gross value of supplies on supplies by such persons. This aims at promoting return filing and documentation culture in the country.

  • Car sales dip by 8 percent in July 2020

    Car sales dip by 8 percent in July 2020

    KARACHI: Domestic car sales have registered 8 percent decline to 11,501 units in July 2020 as compared with 12,482 units in the same month of the last year.

    Pak Suzuki Motors registered 40 percent decline in its sales to 4,991 units in July 2020 as against 8,375 units sold in the same month of the last year.

    However, Indus Motors and Honda Cars posted growth of 68 percent and 48 percent, respectively during the month under review.

    Analysts at Topline Securities said that Kia Lucky Motors (non-member of PAMA) continued to perform well. The company recorded car sales of around 1,500 units in July 2020.

    Moreover, car sales increased by 36 percent MoM in July 2020 as COVID-19 lockdowns eased with car assemblers ramping up production levels to meet pent-up demand of consumers, which is evident from 1-3 months of delivery time from the date of booking.

    All three main car assemblers reported MoM increases, with INDU reporting the highest increase of 60 percent MoM, followed by PSMC (+28 percent MoM) and HCAR (+23 percent MoM).

    Atlas Honda (ATLH) recorded motorbike sales of 94,003 units in Jul-2020, up 17 percent YoY and 4 percent MoM.

    The analysts said demand for cars to grow stronger as lower interest rates for auto financing has revived demand for new cars.

  • Bank holiday announced

    Bank holiday announced

    KARACHI: State Bank of Pakistan (SBP) on Tuesday announced that the central bank will remain closed on Friday August 14, 2020 on account of Independence Day as declared by the government.

    In a circular issued to the presidents and chief executives of all banks, development financial institutions and microfinance banks, the SBP informed about the bank holiday.

  • Stock market gains 644 points as energy sector dominates

    Stock market gains 644 points as energy sector dominates

    KARACHI: The stock market gained 644 points on Tuesday owing to positive activity seen in energy sector.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,559 points as against 39,915 points showing an increase of 644 points.

    Analysts at Arif Habib Limited said that the market opened on a positive note today with +135 points.

    Banks, E&P, OMCs, Cement and Fertilizer stocks helped the index stage recovery from selling that was observed in the past couple of sessions.

    The real head turner today happened to be HUBC and KAPCO, of which both hit upper circuit on anticipation of resolution of issues with GOP, as indicated by Advisor to PM on Finance. International crude oil prices remained on the upside, which made E&P stocks post price gains.

    Increase in fertilizer prices also contributed to buying activity in Fertilizer sector. Among O&GMCs, SSGC and HASCOL hit upper circuits. O&GMCs posted the most volume with 94.6 million shares, followed by Cement (75.1 million) and Power (72.4 million).

    Among scrips, HASCOL topped the volumes with 65.4 million, followed by KEL (36 million) and TRG (31.2 million).

    Sectors contributing to the performance include Power (+166 points), E&P (+147 points), Banks (+107 points), Cement (+81 points) and O&GMCs (+64 points).

    Volumes increased from 576.5 million shares to 600.0 million shares (+4 percent DoD). Average traded value however, increased by 42 percent to reach US$ 147.7 million as against US$ 104.1 million.

    Stocks that contributed significantly to the volumes include HASCOL, KEL, TRG, UNITYR2 and UNITY, which formed 31 percent of total volumes.

    Stocks that contributed positively to the index include HUBC (+128 points), PPL (+81 points), UBL (+45 points), LUCK (+43 points) and OGDC (+39 points). Stocks that contributed negatively include TRG (-18 points), BAHL (-15 points), MTL (-10 points), INDU (-9 points) and HCAR (-6 points).

  • Sindh allows people to check number of vehicles registered on CNIC

    Sindh allows people to check number of vehicles registered on CNIC

    KARACHI: Sindh Excise and Taxation Department has introduced online facility for the citizens to check number of vehicles registered with their Computerized National Identity Card (CNIC).

    The facility has been introduced in order to curb misuse of identity and assuring people for having ownership of the vehicles.

    Provincial Minister for Excise & Taxation and Narcotics Control & Parliamentary Affairs Mukesh Kumar announced the facility. He said that the facility has been introduced for the convenience of the people under which any person can now know the number of vehicles registered on his CNIC number and for this purpose, one should log on to the website www.excise.gos.pk.

    He added that the facility would be provided soon via SMS.

    The provincial minister said that people should avail this facility. “Facilitating the people is the top priority of the Sindh Excise Department,” he concluded.