In a bid to bolster trade and facilitate economic activities, the Federal Board of Revenue (FBR) has expanded its powers to authorize the delivery of certain goods without the requirement of immediate tax payment.
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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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Tax paid on stocks acquired before registration
Section 59 of Sales Tax Act, 1990 has described tax paid on stocks acquired before registration.
The Federal Board of Revenue (FBR) issued the Sales Tax Act, 1990 updated up to June 30, 2021. The Act incorporated amendments brought through Finance Act, 2021.
Following is the text of section 59 of the Sales Tax Act, 1990:
59. Tax paid on stocks acquired before registration.– The tax paid on goods purchased by a person who is subsequently required to be registered under section 14 due to new liabilities or levies or gets voluntary registration under this Act or the rules made thereunder, shall be treated as input tax, provided that such goods were purchased by him from a registered person against an invoice issued under section 23 during a period of thirty days before making an application for registration and constitute his verifiable unsold stock on the date of compulsory registration or on the date of application for registration or for voluntary registration:
Provided that where a person imports goods, the tax paid by him thereon during a period of ninety days before making an application for registration shall be treated as an input tax subject to the condition that he holds the bill of entry relating to such goods and also that these are verifiable unsold or un-consumed stocks on the date of compulsory registration or on the date of application for registration or for voluntary registration.
(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 collects Rs11 bn income tax on prize bond winning
ISLAMABAD: The Federal Board of Revenue (FBR) has collected around Rs11 billion as income tax on the amount paid from winning of prize bonds during fiscal year 2020/2021, according to official data released on Monday.
The collection of income tax grew by only one per cent during the fiscal year 2020/2021 as compared with Rs10.89 billion in the preceding fiscal year.
READ MORE: SBP directs banks to accept bearer prize bonds
On the other hand, the income tax collection on winning from prizes, raffles, or lottery has increased by 97 per cent to Rs518 million during the fiscal year 2020/2021 as compared with Rs263.7 million in the preceding fiscal year.
The FBR collects income tax under Section 156 of the Income Tax Ordinance, 2001.
According to the FBR, every person paying prize on a prize bond, or winnings from a raffle, lottery, prize on winning a quiz, the prize offered by companies for promotion of the 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.
READ MORE: History of Prize Bonds in Pakistan
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.
The tax-deductible under sub-section (1) or collected under sub-section (2) shall be a final tax on the income from prizes or winnings referred to in the said sub-sections.
READ MORE: Income tax on prize bonds, lottery winning
The tax rate for Tax Year 2022 is:
(1) The rate of tax to be deducted under section 156 on a prize on prize bond or cross-word puzzle shall be 15 per cent 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, a prize offered by a company for promotion of the sale, shall be 20 per cent of the gross amount paid.
The total income tax collection under Section 156 of the Income Tax Ordinance, 2001 during the fiscal year 2020-2021 was Rs11.42 billion as compared with Rs11.16 billion in the preceding fiscal year.
READ MORE: 4th draw of Rs25,000 premium prize bonds announced
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Liability and obligations of representatives
Section 58B of Sales Tax Act, 1990 has described liability and obligations of representatives.
The Federal Board of Revenue (FBR) issued the Sales Tax Act, 1990 updated up to June 30, 2021. The Act incorporated amendments brought through Finance Act, 2021.
Following is the text of section 58B of the Sales Tax Act, 1990:
58B. Liability and obligations of representatives.– (1) Every representative of a person shall be responsible for performing any duties or obligations imposed by or under this Act on the person, including the payment of tax.
(2) Subject to section 58 and sub-section (5) of this section, any tax that, by virtue of sub-section (1), is payable by a representative of a registered person shall be recoverable from the representative only to the extent of any assets of the registered person that are in the possession or under the control of the representative.
(3) Every representative of a registered person who pays any tax owing by the registered person shall be entitled to recover the amount so paid from the registered person or to retain the amount so paid out of any moneys of the registered person that are in the representative’s possession or under the representative’s control.
(4) Any representative, or any person who apprehends that he may be assessed as a representative, may retain out of any money payable by him to the person on whose behalf he is liable to pay tax (hereinafter in this section referred to as the “principal”), a sum equal to his estimated liability under this Act, and in the event of disagreement between the principal and such a representative or a person as to the amount to be so retained, such representative or person may obtain from the Commissioner a certificate stating the amount to be so retained pending final determination of the tax liability, and the certificate so obtained shall be his authority for retaining that amount.
(5) Every representative shall be personally liable for the payment of any tax due by the representative in a representative capacity if, while the amount remains unpaid, the representative: –
(a) alienates, charges or disposes of any moneys received or accrued in respect of which the tax is payable; or
(b) disposes of or parts with any moneys or funds belonging to the person that is in the possession of the representative or which comes to the representative after the tax is payable, if such tax could legally have been paid from or out of such moneys or funds.
(6) Nothing in this section shall relieve any person from performing any duties imposed by or under this Act on the person which the representative of the person has failed to perform.
(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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Customs duty collection from imported vehicles surges by 95%
Official data released on Monday indicates a remarkable upswing in the collection of customs duty from imported vehicles during the fiscal year 2020/2021, reflecting a staggering 95 percent growth, reaching Rs111 billion. This surge is in stark contrast to the Rs56.85 billion recorded in the preceding year.
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FBR launches sales tax return filing through single portal
ISLAMABAD: The Federal Board of Revenue (FBR) on Monday said the sales tax return for the month of December 2021 will be filed through single portal.
The FBR in a memorandum said that sales tax return for the tax period of December 2021, which is scheduled to be filed in January 2022, will be filed through the Single Sales Tax Portal.
READ MORE: Power of the Board and Commissioner to call for records
In order to allow the registered persons to familiarize themselves with the new system, the uploading of sales tax invoice of December 2021 has been enabled, the FBR said. The old sales tax return will not be available for filing the return for December 2021, it added.
Therefore, all sales tax registered persons and their representatives have been advised to familiarize themselves with the single sales tax portal.
READ MORE: Inland Revenue officers promoted to BS-20
The single portal for sales tax returns has been launched to facilitate taxpayers, promote ease of doing business and reduce compliance cost.
The FBR said that through this portal, sales tax registered persons shall be able to file a single sales tax return instead of having to file separate returns to the FBR and each of the different provincial sales tax authorities.
READ MORE: PM to launch single sales tax portal this month
By filing sales tax on the portal, it will save time and effort besides simplifying the return filing process, the FBR added.
The portal will minimize data entry and address the issue of data and calculation errors. It will also automatically apportion input tax adjustment as well as payments across the sales tax authorities, eliminating the need for reconciliation and payment transfers.
The single portal will encourage harmonization of tax procedures, definitions and principals between the federal and provincial governments, which will promote national unity, the FBR said.
READ MORE: Single sales tax portal to start functioning by month-end
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Taxpayers allowed to nominate representatives
Section 58A of Sales Tax Act, 1990 has described taxpayers allowed to nominate representatives.
The Federal Board of Revenue (FBR) issued the Sales Tax Act, 1990 updated up to June 30, 2021. The Act incorporated amendments brought through Finance Act, 2021.
Following is the text of section 58A of the Sales Tax Act, 1990:
58A. Representatives.– (1) For the purpose of this Act and subject to sub-sections (2) and (3), the expression “representative” in respect of a registered person, means: –
(a) where the person is an individual under a legal disability, the guardian or manager who receives or is entitled to receive income on behalf, or for the benefit of the individual;
(b) where the person is a company (other than a trust, a Provincial Government, or local authority in Pakistan), a director or a manager or secretary or agent or accountant or any similar officer of the company;
(c) where the person is a trust declared by a duly executed instrument in writing whether testamentary or otherwise, any trustee of the trust;
(d) where the person is a Provincial Government, or local authority in Pakistan, any individual responsible for accounting for the receipt and payment of money or funds on behalf of the Provincial Government or local authority;
(e) where the person is an association of persons, a director or a manager or secretary or agent or accountant or any similar officer of the association or, in the case of a firm, any partner in the firm;
(f) where the person is the Federal Government, any individual responsible for accounting for the receipt and payment of moneys or funds on behalf of the Federal Government; or
(g) where the person is a public international organization, or a foreign government or political sub-division of a foreign government, any individual responsible for accounting for the receipt and payment of moneys or funds in Pakistan on behalf of the organization, government, or political subdivision of the government.
(2) Where the Court of Wards, the Administrator General, the Official Trustee, or any receiver or manager appointed by, or under, any order of a Court receives or is entitled to receive income on behalf, or for the benefit of any person, such Court of Wards, Administrator General, Official Trustee, receiver, or manager shall be the representative of the person for the purposes of this Act.
(3) subject to sub-section (4), where a person is a non-resident person, the representative of the said person for the purpose of this Act,
for a financial year in which the relevant tax period falls, shall be any person in Pakistan: – –
(a) who is employed by, or on behalf of, the non-resident person;
(b) who has any business connection with the non-resident person;
(c) from or through whom the non-resident person is in receipt of any income, whether directly or indirectly;
(d) who holds, or controls the receipt or disposal of any money belonging to the non-resident person;
(e) who is the trustee of the non-resident person; or
(f) who is declared by the Commissioner by an order in writing to be the representative of the non-resident person.
Explanation.– For the purposes of this sub-section, non-resident person shall have the same meaning assigned thereto under the Income Tax Ordinance, 2001 (XLIX of 2001).
(4) No person shall be declared as the representative of a non-resident person unless the person has been given an opportunity by the Commissioner of being heard.
(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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Tax liability of winding company
Section 58 of Sales Tax Act, 1990 has explained liability for payment of tax in case of private companies or business enterprises.
The Federal Board of Revenue (FBR) issued the Sales Tax Act, 1990 updated up to June 30, 2021. The Act incorporated amendments brought through Finance Act, 2021.
Following is the text of section 58 of the Sales Tax Act, 1990:
58. Liability for payment of tax in case of private companies or business enterprises.–(1) Notwithstanding anything contained in the Companies Act, 2017 (XIX of 2017), where any private company or business enterprise is wound up and any tax chargeable on the company or business enterprise, whether before, or in the course, or after its liquidation, in respect of any tax period cannot be recovered from the company or business enterprise, every person who was an owner of, or partner in, or director of, or a shareholder, owning not less than ten per cent of the paid-up capital, in the company or business enterprise, as the case may be, during the relevant period shall jointly and severally with such persons, be liable for the payment of such tax.
(2) Any director or partner who pays tax under sub-section (1) shall be entitled to recover the tax paid from the company or a share of the tax from any other director or partner, as the case may be.
(3) A shareholder who pays tax under sub-section (1) shall be entitled to recover the tax paid from the company or from any other shareholder, owning not less than ten percent of the paid up capital, in proportion to the shares owned by that other shareholder.”; and
(4) The provisions of this Act shall apply to any amount due under this section as if it were tax due under an order for assessment made under this Act.
(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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Rectification of mistake in order made by IR officer
An officer of Inland Revenue (IR) or a commissioner IR by an order in writing can amend any order passed by him to rectify any mistake apparent from the record under Section 57 of the Sales Tax Act, 1990.
The Federal Board of Revenue (FBR) issued the Sales Tax Act, 1990 (STA) updated up to June 30, 2021. The Act incorporated amendments brought through Finance Act, 2021.
Following is the text of section 57 of the Sales Tax Act, 1990:
57. Rectification of Mistake.– (1) The officer of Inland Revenue, Commissioner, the Commissioner (Appeals) or the Appellate Tribunal may, by an order in writing, amend any order passed by him to rectify any mistake apparent from the record on his or its own motion or any mistake brought to his or its notice by a taxpayer or, in the case of the Commissioner (Appeals) or the Appellate Tribunal, the Commissioner.
(2) No order under sub section (1) which has the effect of increasing an assessment, reducing a refund or otherwise applying adversely to the taxpayer shall be made unless the taxpayer has been given a reasonable opportunity of being heard.
(3) Where a mistake apparent on the record is brought to the notice of the officer of Inland Revenue, Commissioner or Commissioner (Appeals), as the case may be, and no order has been made under sub section (1), before the expiration of the Financial year next following the date on which the mistake was brought to their notice, the mistake shall be treated as rectified and all the provisions of this Act shall have effect accordingly.
(4) No order under sub-section (1) shall be made after five years from the date of the order sought to be rectified.
(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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Prize scheme on invoices issued by retailers
ISLAMABAD: The Federal Board of Revenue (FBR) is empowered to introduce prize schemes on invoices issued by retailers under Section 56C of the Sales Tax Act, 1990.
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