ISLAMABAD: The Federal Board of Revenue (FBR) is contemplating the imposition of charges for customs clearance services, a move empowered by Section 18D of the Customs Act, 1969.
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FBR, Pakistan’s national tax collecting agency, plays a crucial role in the country’s economy. Pakistan Revenue is committed to providing readers with the latest updates and developments regarding FBR activities.
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Customs duty rates under international treaties
Section 18C of Customs Act, 1969 determined rate of duties in Pakistan under international treaties.
The FBR issued updated Customs Act, 1969 up to June 30, 2021. The act has been updated by making amendments brought through Finance Act, 2021.
Following is the text of section 18C of the Customs Act, 1969:
18C. Rates of duty and taxes and determination of origin under trade agreements.- (1) Where under a trade agreement between the Government of Pakistan and the Government of a foreign country or territory, duty at a rate lower than that specified in the First Schedule is to be charged on articles which are the produce or manufacture of such foreign country or territory, the Federal Government may, by notification in the official Gazette, make rules for determining if any article is the produce or manufacture of such foreign country or territory and for requiring the owner to make a claim at the time of importation, supported by such evidence as may be prescribed in the said rules, for assessment at the appropriate lower rate under such agreement.
(2) Where in respect of any article, a preferential rate of duty is specified in the First Schedule, or is admissible by virtue of a notification under sub-section (1), the duty to be levied and collected shall be at the standard rate unless the owner of the article claims at the time of importation that it is chargeable with a preferential rate of duty, being the produce or manufacture of such preferential or free trade area, as is notified under sub-section (3) and the article is determined, in accordance with the rules made under sub-section (1) to be such produce or manufacture.
(3) For the purposes of this section and the First Schedule ―preferential area or free trade area‖ means any country or territory which the Federal Government may, by notification in the official Gazette, declare to be such area.
(4) Notwithstanding anything contained in sub-sections (1) and (2), where the Federal Government is satisfied that, in the interests of trade including promotion of exports, it is necessary to take immediate action for discontinuing the preferential rate or increasing the preferential rate to a rate not exceeding the standard rate, or decreasing the preferential rate, in respect of an article specified in the First Schedule, the Federal Government may, by notification in the official Gazette, direct discontinuation of, or increase or decrease, as the case may be, the preferential rate.
(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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FBR may impose additional custom duty on imports
The Federal Board of Revenue (FBR) has been empowered to impose additional custom duty on import of goods under Section 18A of Customs Act, 1969.
The FBR issued updated Customs Act, 1969 up to June 30, 2021. The act has been updated by making amendments brought through Finance Act, 2021.
Following is the text of section 18A of the Customs Act, 1969:
18A. Special customs duty on imported goods.- The Federal Government may, by notification in the official Gazette, levy a special customs duty on the importation of such of the goods specified in the First Schedule as are of the same kind as goods produced or manufactured in Pakistan, at a rate not exceeding the rate of duty of excise leviable under the Federal Excise Act, 2005, on the goods produced or manufactured in Pakistan:
Provided that the exemption of any goods from the whole or any part of the duty of excise for the time being in force shall not prevent the Federal Government from levying a special customs duty on the importation of goods of the same kind:
Provided further that, for the purposes of the Sales Tax Act 1990 (VII of 1990), the special customs duty shall not constitute a part of the value of supply.
(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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Rate of customs duty in Pakistan on imports
Section 18 of Customs Act, 1969 has defined rate of customs duty in Pakistan on import of goods.
The Federal Board of Revenue (FBR) issued updated Customs Act, 1969 up to June 30, 2021. The act has been updated by making amendments brought through Finance Act, 2021.
Following is the text of section 18 of the Customs Act, 1969:
18. Goods dutiable.- (1) Except as hereinafter provided, customs duties shall be levied at such rates as are prescribed in the First Schedule or under any other law for the time being in force on,-
(a) goods imported into Pakistan;
(b) goods brought from any foreign country to any customs station, and without payment of duty there, transshipped or transported for, or thence carried to, and imported at any other customs-station; and
(c) goods brought in bond from one customs station to another.
105(1A) Notwithstanding anything contained in sub-section (1), customs duties shall be levied at such rates on import of goods or class of goods as are prescribed in the Fifth Schedule, subject to such conditions, limitations and restrictions as prescribed therein.
(2) No export duty shall be levied on the goods exported from Pakistan.
(3) The Federal Government may, by notification in the official Gazette, levy, subject to such conditions, limitations or restrictions as it may deem fit to impose, a regulatory duty on all or any of the goods imported or exported, as specified in the First Schedule at a rate not exceeding one hundred per cent of the value of such goods as determined under section 25 or, as the case may be, section 25A.
(4) The regulatory duty levied under sub-section (3) shall –
(a) be in addition to any duty imposed under sub-section (1) or under any other law for the time being in force; and
(b) be leviable on and from the day specified in the notification issued under that sub-section, notwithstanding the fact that the issue of the official Gazette in which such notification appears is published at any time after that day.
(5) The Federal Government may, by notification in the official Gazette, levy an additional customs-duty on such imported goods as are specified in the First Schedule, at a rate not exceeding thirty-five per cent of value of such goods as determined under section 25 or, as the case may be, section 25A:
Provided that the cumulative incidence of customs-duties leviable under sub-sections (1) and (5) shall not exceed the rates agreed to by the Government of Pakistan under multilateral trade agreements.
(6) The additional customs-duty levied under sub-section (5) shall be,-
(a) in addition to any duty imposed under sub-sections (1) and (3) or under any other law for the time being in force; and
(b) leviable on and from the day specified in the notification issued under that sub-section, notwithstanding the fact that the official Gazette in which such notification appears is published at any time after that day.
(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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FBR extends working hours on May 30 – 31 for tax collection
ISLAMABAD: The Federal Board of Revenue (FBR) on Saturday directed the offices of Inland Revenue to observe extended working hours to facilitate taxpayers in payment of duties and taxes.
The FBR in an office memorandum directed all Large Taxpayers Offices (LTOs)/ Medium Tax Office (MTO)/ Corporate Tax Offices (CTOs)/ Regional Tax Offices (RTOs) to open and observed extended working hours till 20:00 hrs on Monday May 30, 2022 and till 22:00 hrs on Tuesday, May 31, 2022 to facilitate the taxpayers in payment of duties and taxes.
READ MORE: FBR to install more scanners for customs clearance
The FBR asked chief commissioners of Inland Revenue to establish liaison with the State Bank of Pakistan (SBP) and authorized branches of National bank of Pakistan (SBP) to ensure transfer of tax collected by these branches to the respective branches of the SBP on the same date to account for the same towards collection for the month of May 2022.
READ MORE: FBR promotes Customs officers to BS-19
The SBP has also issued a statement in regard. The central bank said that in order to facilitate the collection of government receipts / duties / taxes, it has been decided that the field offices of SBP Banking Services Corporation (SBP-BSC) and authorized branches of National Bank of Pakistan (NBP) will observe extended banking hours till 8:00 P.M. and 10:00 P.M. on 30th and 31st May, 2022 respectively.
READ MORE: FBR drafts ID evidence rules to subscribe Pakistan Single Window
Accordingly NIFT has been advised to arrange a special clearing at 8:00 P.M. on 31st May, 2022 (Tuesday) for same day clearing of payment instruments.
All banks are advised to keep their concerned branches open on 31st May, 2022 (Tuesday) till such time that is necessary to facilitate the special clearing for Government transactions by the NIFT.
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Detention of goods violating customs act
Section 17 of Customs Act, 1969 explains detention, seizure and confiscation of goods imported in violation of section 15 or section 16.
The Federal Board of Revenue (FBR) issued updated Customs Act, 1969 up to June 30, 2021. The act has been updated by making amendments brought through Finance Act, 2021.
Following is the text of section 17 of the Customs Act, 1969:
17. Detention, seizure and confiscation of goods imported in violation of section 15 or section 16.- Where any goods are imported into, or attempted to be exported out of, Pakistan in violation of the provisions of section 15 or of a notification under section 16, such goods shall, without prejudice to any other penalty to which the offender may be liable under this Act or the rules made there under or any other law, be liable to detention, for seizure or confiscation subject to approval of an officer not below the rank of an Assistant Collector of Customs, and seizure for confiscation through adjudication, if required :
Provided that the period of detention shall not exceed fifteen days which may be extended by the Chief Collector or Director General for a period not exceeding fifteen days.
(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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KCCI proposes sales tax exemption to solar panels, inverters
Karachi Chamber of Commerce and Industry (KCCI) has proposed restoration of sales tax exemption on supply of solar panels and inverters.
The KCCI in its proposals for budget 2022/2023 submitted to the Federal Board of Revenue (FBR), stated that solar panels and inverters were earlier granted zero rated of sales tax.
READ MORE: FBR suggested automatic GD filing extension on system failure
The exemption from sales tax on supply of solar panels and inverters were withdrawn through supplementary finance bill 2021 thus imposing 17 per cent sales tax.
The chamber said that imposition of 17 per cent sales tax increased the cost for consumer and discourage use of alternative sources of energy.
Every household, commercial establishments and industries are opting for alternate sources of energy to reduce their expenditure and cost of doing business. Solar energy is now widely being used in Pakistan and helping to reduce dependence on costly thermal power.
READ MORE: KCCI proposes sales tax exemption to e-commerce
Every Household and commercial sector has been affected by exorbitant cost of electricity.
With imposition of 17 per cent sales tax, cost of solar panels and inverters will increase and discourage substitution.
It is proposed that exemption of sales tax on solar panel and inverters through Supplementary Finance Bill 2021 should be restored.
READ MORE: Withholding tax on raw material import should be adjustable
Giving rationale, the chamber said that the proposal would reduce prices for consumers for saving the electricity and gas for local industries and oil imports. It is Import substantial for the country. Expansion of an industry which has good potential for growth.
The Karachi Chamber highlighted the issued on indenting agents stating that such agents have to pay 5 per cent withholding tax on inward remittances of commission while the indenting agents based in Sindh also have to pay Sindh Sales Tax on Services at 13 per cent.
READ MORE: KCCI suggests VAT removal for commercial importers
To avoid such rates of taxation, indenters now mostly retain the commission outside Pakistan and book import orders on Proforma Invoices or Contracts from suppliers. This results in loss of foreign exchange to the country.
In the online meeting with KCCI on June03, 2021, the Minister for Finance and Revenue agreed to the proposal that indenting commission should be treated as export proceeds and taken out of the purview of provincial service taxes. Indenting agents serve all of Pakistan and should therefore remain in Export regime just as IT and other service providers. The proposal may therefore be incorporated in budget.
Encourage remittance of foreign exchange and documentation.
READ MORE: FPCCI demands CNIC condition withdrawal
The chamber in another issue stated that large amounts of refund of Drawback of Local Taxes and Levies (DLTL) pertaining to exporters are delayed and remain unpaid for months.
Exporters face liquidity crunch due to blocked funds and blocked refunds have a negative impact on exports.
In the meeting with KCCI delegation in Islamabad on September 20, Minister for Finance and Revenue had assured the KCCI delegation that DLTL will continue and pending refunds will be expedited.
KCCI therefore submits that payments of DLTL should be released and backlog be cleared.
Improve liquidity for exporters and help to enhance exports.
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FBR to install more scanners for customs clearance
KARACHI: The Federal Board of Revenue (FBR) will add more scanners for digitization of customs clearance, said Wajid Ali, Chief Collector, MCC Appraisement (South) Karachi.
Addressing at Federation of Pakistan Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Friday, he said that more container scanners will added on a regular basis and customs is moving towards best-practices in digitalization; however, accepted that more work needs to be done to facilitate the traders.
READ MORE: FBR promotes Customs officers to BS-19
Agreeing to the top demand of FPCCI, Wajid Ali promised that the online complaint mechanism will be launched at Federation House to address all the issues, concerns and complaints of the business community pertaining to customs.
It will not only promote the liaison between the customs department and the business community; but, will also expedite the complaints resolution process.
The Chief Collector informed the session that Input/Output Co-efficient Organization (IOCO) has determined the quotas for the erstwhile FATA and PATA region; hence, its misuse will be eliminated.
He also committed that refunds will be swiftly processed to facilitate the traders. He added that National Single Window (NSW) will contain HS Codes in 12 digits.
READ MORE: FBR drafts ID evidence rules to subscribe Pakistan Single Window
Wajid Ali has asked FPCCI to propose the inclusion of its representative into the classification committee and apprised that Alternative Dispute Resolution Committee (ADRC) will also be refreshed.
He also welcomed the recommendations of appointing a focal person for FPCCI for the greater good of business community; more proactive 90-day advanced rulings and effective implementation of protections covered under SRO 598 to already issued Bill of Lading and Letter of Credit.
Earlier, Irfan Iqbal Sheikh, President FPCCI, discussed the issues and anomalies endured by the business community with top customs officials in a detailed session at Federation House.
He enlisted that lack of regulation of container terminals; misuse of erstwhile FATA and PATA exemptions; delay in refunds processing; unfair demurrages charges; insufficient investment into digitalization & container scanners; inadequate diversification in HS and PCT Codes; overlooking cascading principle on raw materials and irregular consultative process with the trading community’s stakeholders are the top impediments in the smooth functioning of the customs operations.
READ MORE: Trade Information Portal of Pakistan
Sheikh demanded formation of a regulatory authority for container terminals for a better working environment between traders and container terminals.
He also expressed his profound concerns over misuse of erstwhile FATA and PATA exemptions as the phenomenon has disturbed the even-playing-field.
Sheikh also expressed his dismay over paying technology upgradation and container scanner charges since the year 2005; but, no wide-scale upgradation has taken place as yet. He also called upon customs authorities to adopt 16-digit HS Codes to cater to the diverse imports.
Engr. M. A. Jabbar, Vice President FPCCI, pointed out that tariff rationalization should be an ongoing process to adapt to the ever-changing trade & industry environment and proposed that member policy of FBR should keep consulting the stakeholders.
READ MORE: PSW to link 27 banks for trade facilitation
Shabbir Hassan Mansha, VP FPCCI, demanded a focal person for FPCCI and also apprised the session that the business community faces delays in refunds as the pay orders are encashed without informing the traders; and, critical working capital is blocked due to the practice.
Saqib Fayyaz Maggo, Convener Customs FPCCI, highlighted the lack of uniformity in the disposal of cases under Sections 81, 25A, 25D; on top of the excessive adjudication cases and ever-increasing demurrages charges.
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FBR suggested automatic GD filing extension on system failure
KARACHI: The Federal Board of Revenue (FBR) has been urged to allow automatic extension for filing Goods Declaration (GDs) where traders unable to file due to system glitches.
Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2022/2023 informed the FBR that due to malfunctioning of the online filing system, Importers are unable to file GDs in time.
READ MORE: KCCI proposes sales tax exemption to e-commerce
Consequently clearance of cargo is delayed and importers have to bear heavy demurrage and detention charges.
Similarly the filing of sales tax return is also delayed frequently due to software errors or disruption of the system resulting in expiry of deadline.
READ MORE: Withholding tax on raw material import should be adjustable
Due to these reasons, taxpayers are often penalized for delay in filing the sales tax returns within due date due to malfunction of the portal. Registered persons are held responsible for failure of the system which is not their fault.
READ MORE: KCCI suggests VAT removal for commercial importers
The chamber recommended adequate provisions shall be inserted in Customs Act 1969 and Sales Tax Act 1990, and necessary modification in the software be made which automatically condone any delay in Filing of GDs and filing of Sales Tax returns. System should allow waiver of demurrage and detention charges for the number of days during which system was down.
READ MORE: FPCCI demands CNIC condition withdrawal
It further recommended that delays in filing of Sales Tax Returns which occur due to failure/malfunction in the system should be automatically condoned without recourse to tax authorities and no penalty should be imposed for the delay in filing.
Giving rationale to the proposal, the KCCI said it would alleviate the hardships faced by importers and sales tax registered persons. It will also enhance confidence of tax-payers in the system and encourage compliance. Save the importers and registered persons from unjust charges and cost of doing business.
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FBR’s officers found non-compliant in filing asset declaration
ISLAMABAD: The Federal Board of Revenue (FBR) has detected a number of officers in BS-19 and BS-20 are non-compliant in filing mandatory declaration of assets.
The FBR on Friday issued a circular instructing officers of Inland Revenue Service (IRS) and Pakistan Customs Service (PCS) in BS-19 and BS-20 to submit their declaration of assets and Performance Evaluation Reports (PERs) by May 31, 2022.
READ MORE: FBR promotes Customs officers to BS-19
The FBR said that the Establishment Division had informed that a meeting of Central Selection Board (CSB) for promotion of IRS/PCS from BS-20 to BS-21 and BS-19 to BS-20 posts, was scheduled to be held shortly and cases for promotion would be submitted to the Establishment Division for CSB by June 01, 2022.
“It has been observed that PERs of the officers of IRS/PCS, who are in the promotion zone, have not yet been received despite reminders,” the FBR said.
READ MORE: FBR transfers BS-20 officers of Pakistan Customs Service
All BS-19 and BS-20 officers of IRS/PCS, who are in the promotion zone have been asked to ensure that their PERs and declaration of assets up to June 30, 2021 are submitted to the FBR latest by May 31, 2022.
Completion of PERs and submission of declaration of assets are the prerequisites for promotion to selection grades under Civil Servants Promotion (BS-18 to BS-21) Rules, 2019. The FBR is trying hard to ensure that all eligible officers should be considered for promotion in the forthcoming CSB meeting.
READ MORE: FBR promotes nine IRS officers to BS-19
The FBR warned that any officer failing to furnish the documents by the due date of May 31, 2022, will himself/herself be responsible for non-consideration / deferment / supersession. The reporting/countersigning officers are also advised to immediately forward PERs of the officers to the Board without any delay.