Tag: FBR

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.

FBR to pay additional amount on delayed sales tax refund

Federal Board of Revenue (FBR) is liable to pay an additional amount on a sales tax refund that is paid after a specified time under Sales Tax Act, 1990.

A procedure for the payment of an additional amount against delayed sales tax refund has been laid down under Section 67 of the Sales Tax Act, 1990.

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 67 of the Sales Tax Act, 1990:

67. Delayed Refund.– Where a refund due under section 10 is not made within the time specified in section 10 from the date of filling of refund claim, there shall be paid to the claimant in addition to the amount of refund due to him, a further sum equal to KIBOR per annum of the amount of refund due, from the date following the expiry of the time specified as aforesaid, to the day preceding the day of payment of refund:

Provided that where there is reason to believe that a person has claimed the refund which is not admissible to him, the provision regarding the payment of such additional amount shall not apply till the investigation of the claim is completed and the claim is either accepted or rejected:

Provided further that where a refund due in the consequence of any order passed under section 66 is not made within forty five days of date of such order, there shall be paid to the claimant in addition to the amount of the refund due to him, a further sum equal to KIBOR per annum of the amount of refund, due from the date of the refund order.

(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.)

READ MORE: Refund to be claimed within one year

January 4, 2022
FBR raises sales tax on all petroleum products

ISLAMABAD: The Federal Board of Revenue (FBR) on Monday notified an increase in sales tax on all the petroleum products.

The FBR issued SRO 01(I)/2022 to notify increase in sales tax rates on petroleum products. The FBR amended the rates of sales tax, which were issued previously through SRO 1604(I)/2021 on December 16, 2021.

READ MORE: Prices of all POL products increased to wish New Year

According to the latest notification enhanced the sales tax on petrol from 1.63 per cent to 4.77 per cent.

The sales tax rate on high-speed diesel has been increased to 9.08 per cent from 7.37 per cent.

The FBR enhanced the sales tax on kerosene oil to 8.30 per cent from 8.19 per cent. Likewise, the sales tax on light diesel has been increased to 2.70 per cent from 0.46 per cent.

The government on December 31, 2021 increased prices of all petroleum products effective from January 01, 2022.

READ MORE: Petrol price reduces to Rs140.82 per liter

The prices have been increased across the board around Rs4 per liter on all the products.

According to a notification issued by the finance division, the new price of petrol has been increased by Rs4 to Rs144.82 per liter from Rs140.82. The rate of high-speed diesel (HSD) has been increased by Rs4 to Rs141.62 per liter from Rs137.62. Similarly, the price of kerosene has been increased by Rs3.95 to Rs113.53 per liter from Rs109.53. Likewise, the price of light diesel oil has been increased by Rs4.15 to Rs111.06 per liter from Rs107.06.

READ MORE: SBP revises manual on remittances for petroleum sector

The notification stated that in the fortnightly review of petroleum products prices, the prime minister had rejected the proposal of Oil and Gas Regulatory Authority (OGRA) for an increase in prices of petroleum products and advised to increase only Rs4 per liter to meet the petroleum levy target agreed with the International Monetary Fund (IMF).

“Sales tax on petrol and diesel has been adjusted downwards as compared to December 16, 2021, to keep the prices lower,” the notification stated.

January 3, 2022
FBR extends digital payment system till January 31

ISLAMABAD: The Federal Board of Revenue (FBR) has deferred the implementation of a digital mode of payment for another month i.e. January 31, 2022.

The digital mode of payment has been made mandatory for the corporate sector, which was to be implemented from January 01, 2021.

The FBR issued circular No. 11 of 2021-22 on Monday to allow further extension till January 31, 2021.

“In exercise of the powers conferred under Section 214A of the Income Tax Ordinance, 2001 (hereinafter “the Ordinance”) and taking cognizance of various representations filed by the taxpayers, the Federal Board of Revenue is pleased to extend the deadline for digital payments by Corporate Sector stipulated in Section 21(1a) of the Ordinance up to January 31, 2022.”

Previously, the FBR issued Circular No. 09 of 2021-22 to allow an extension in the deadline for implementation of digital mode of payment up to November 30, 2021.

The new provision was introduced through Tax Laws (Third Amendment) Ordinance, 2021.

The FBR in its explanation through Circular No. 07 dated September 23, 2021 said: to improve documentation, a new clause (la) has been inserted in section 21 of the Ordinance.

The Pakistan Tax Bar Association (PTBA) in a letter to the FBR chairman stated that the implementation of digital payment was not practical at the moment.

January 3, 2022
Tax collection from property transactions surges to Rs61 billion

ISLAMABAD: The annual collection of withholding tax from transactions of immovable properties has surged by 98 per cent to Rs61.06 billion during fiscal year 2020/2021.

According to official statistics made available to PkRevenue.com, the collection from sales and purchase of immovable properties was Rs30.77 billion during fiscal year 2019/2020.

Sources in the Federal Board of Revenue (FBR) attributed the increase in revenue collection to enhanced activities during the fiscal year due ease in restrictions related to coronavirus.

READ MORE: Advance tax on purchase of immovable property

They said that the first case of coronavirus was identified in February 2019, and then the government resorted to strict lockdown, which stalled the economic activities.

However, in the subsequent year the government decided to relax the corona restrictions and brought the economic activities to normal.

The FBR collects withholding tax under section 236C of the Income tax Ordinance, 2001 on sale and transfer of immovable properties.

READ MORE: Advance tax on sale or transfer of immovable property

Furthermore, the FBR collect withholding tax under Section 236K of the Income Tax Ordinance, 2001 on purchase of immovable properties.

The collection of withholding tax on sale or transfer of immovable properties registered a growth of 76 per cent to Rs7 billion during fiscal year 2020/2021 as compared with Rs12.2 billion in the preceding fiscal year.

The collection of withholding tax on purchase of immovable properties registered an unprecedented growth of 105 per cent to Rs49 billion during fiscal year 2020/2021 as compared with Rs24 billion in the preceding fiscal year.

READ MORE: FBR issues new, revised tables of property valuation

The FBR sources said that the collection during the fiscal year 2021/2022 would increase significantly due to change in valuation tables for the purpose of withholding tax collection from transactions of immovable properties.

The FBR on December 01, 2021 issued fresh and revised valuation of immovable properties for various cities of the country.

However, the implementation of the fresh valuation table will be applicable from January 16, 2021.

READ MORE: FBR postpones property valuation implementation

January 3, 2022
FBR decides to manage, display gifts received by officials

ISLAMABAD: The Federal Board of Revenue (FBR) has decided to manage and display gifts received during official meetings, a statement said on Monday.

The Board in Council of the FBR in its meeting on January 01, 2022, discussed various agenda items and made some very important decisions.

READ MORE: Tax payment with return drops to Rs54 billion in FY21

For the first time ever in the organization’s history, the council unanimously agreed to establish Toshakhana under the relevant rules and guidelines of the Cabinet Division.

The council also discussed the existing rules regarding the acceptance and disposal of gifts.

After thorough deliberations, it was decided to notify procedures with regards to inventory management and display of the gifts received from dignitaries/guests during official meetings and visits.

READ MORE: Pak-Afghan 2nd round talks on DTA concludes

It was further decided that all officers of FBR would voluntarily declare and deposit gifts received by them. The minimum threshold for gifts has been determined to be Rs. 10,000 for FBR instead of Rs. 30,000, currently fixed for the other divisions of the Federal Government.

The only exception to these rules is applicable on shields and gifts that have an individual’s name engraved. It was also agreed that gifts so far declared will be disposed of as per applicable rules and regulations.

READ MORE: New rates of FED on local, imported motor vehicles

Furthermore, the BIC also approved the new nomenclature for FATE Wing which will now be known as Public Relations Wing.

Likewise, the two training directorates of Inland Revenue Service and Pakistan Customs, FBR have got their new names, IRS Academy and Pakistan Customs Academy, respectively.

READ MORE: Mini-budget: FBR to generate Rs4.5bn through tax rate increase on cellular services

January 3, 2022
Tax payment with return drops to Rs54 billion in FY21

ISLAMABAD: The voluntary payment along with annual income tax return has dropped to Rs54.09 billion during the fiscal year 2020/2021, according to official data made available to PkRevenue.com

The tax payment with return was Rs56.5 billion during the fiscal year 2019/2020, according to data compiled by the Federal Board of Revenue (FBR).

READ MORE: Requirement of filing income tax return by persons

The primary reason for the decline in voluntary payment in the fiscal year 2020/2021 was a bulk amount was paid along with the returns under the head of the amnesty scheme during the fiscal year 2019/2020.

An amount of Rs19.8 billion under the amnesty scheme was paid with the returns during the fiscal year 2019/2020.

READ MORE: Action against concealed, unexplained income or assets

On the other hand, the collection of tax under Section 137 of the Income Tax Ordinance, 2001 surged to Rs52.62 billion during the fiscal year 2020/2021 as compared with Rs36.23 billion in the preceding fiscal year.

READ MORE: What is due date for tax payment?

Furthermore, the collection under Section 113A of the Income Tax Ordinance, 2001, from small retailers also recorded significant growth to Rs1.43 billion during the fiscal year 2020/2021 when compared with Rs418 million in the preceding fiscal year.

Income Tax Ordinance, 2001 updated till June 30, 2021

January 3, 2022
Refund to be claimed within one year

Section 66 of Sales Tax Act, 1990 has described refund to be claimed within one year.

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 66 of the Sales Tax Act, 1990:

66. Refund to be claimed within one year.– No refund of tax claimed to have been paid or over paid through inadvertence, error or misconstruction or refund on account of input adjustment not claimed within the relevant tax period, shall be allowed, unless the claim is made within one year of the date of payment:

Provided that in a case where a registered person did not deduct input tax within the relevant tax period, the Commissioner may, after satisfying himself that input tax adjustment is due and admissible, allow the registered person to take such adjustment in the tax period as specified by the Commissioner:

Provided further that in a case where the refund has become due on account of any decision or judgement of any officer of Inland Revenue or court or the Tribunal, the period of one year shall be reckoned from the date of judgement or decision of such officer, court or Tribunal:

Provided further that the application or claim filed under this section shall be disposed of within a period not exceeding ninety days from the date of filing of such application or claim.

Provided also that no refund shall be admissible under this section if incidence of tax has been passed directly or indirectly to the consumer.

(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.)

Exemption of tax not or short levied

January 2, 2022
Exemption of tax not or short levied

Section 65 of Sales Tax Act, 1990 has explained exemption of tax not levied or short levied as a result of general practice.

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 65 of the Sales Tax Act, 1990:

65. Exemption of tax not levied or short levied as a result of general practice.– Notwithstanding anything contained in this Act, if in respect of any supply the Federal Government is satisfied that inadvertently and as a general practice: –

(a) tax has not been charged in any area on any supply which was otherwise taxable, or according to the said practice the amount charged was less than the amount that should have actually been charged;

(b) the registered person did not recover any tax prior to the date it was discovered that the supply was liable to tax; and (c) the registered person started paying the tax from the date when it was found that the supply was chargeable to tax;

It may, by a notification in the official Gazette, direct that the tax not levied or short levied as a result of that inadvertent practice, shall not be required to be paid for the period prior to the discovery of such inadvertent practice.

(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.)

FBR may prohibit drawback in case of foreign territory

January 2, 2022
FBR may prohibit drawback in case of foreign territory

In a move that could have significant implications for exporters, the Federal Board of Revenue (FBR) is contemplating the prohibition of drawback against goods exported to specified foreign territories.
(more…)

January 2, 2022
New rates of FED on local, imported motor vehicles

ISLAMABAD: The federal government has proposed enhancement in federal excise duty (FED) on imported and locally assembled vehicles through mini-budget.

The government on December 30, 2021 presented Finance (Supplementary) Bill, 2021 to take tax measures to generate additional revenue for improve fiscal situation of the country. One of the major revenue measure is increasing the FED on imported and locally manufactured motor vehicles.

READ MORE: Mini-budget: FBR to generate Rs4.5bn through tax rate increase on cellular services

Sources said that the Federal Board of Revenue (FBR) had estimated to generate additional Rs6.5 billion through the changes.

According to the changes proposed, the FED on imported completely built unit (CBU) up to 1,000 CC the rate shall be unchanged at 2.5 per cent ad valorem.

READ MORE: Mini-budget: income tax rates proposed for foreign TV dramas

However, CBU imported vehicles between 1001CC to 1799CC the FED has been proposed to enhance to 10 per cent from 5 per cent.

Similarly, the CBU imported motor vehicles between 1800CC to 3000CC the FED has been increased to 30 per cent from 25 per cent.

Likewise, the motor vehicles above 3000CC, the FED has been enhanced to 40 per cent from 30 per cent.

READ MORE: Tax exemptions worth Rs343 billion withdrawn through mini-budget

The FED on locally manufactured motor vehicles has been kept unchanged at zero per cent for engine capacity up to 1000CC.

However, motor vehicles with engine capacity between 1000CC to 2000CC and exceeding 2000CC, the FED has been enhanced to 5 per cent from 2.5 per cent and enhanced to 10 per cent from 5 per cent, respectively.

The Federal Board of Revenue (FBR) said that the FED has been announced to increase to 30 per cent from existing rate of 25 per cent on import of double cabin (4X4) pick-up vehicles.

Similarly, the FED on locally manufactured double cabin (4X4) has been increased to 10 per cent from existing rate of 7.5 per cent.

READ MORE: Mini-budget: Advance tax on motor vehicles doubles

January 1, 2022