Pkrevenue.com

Tag: FBR

Get the latest FBR news, tax updates, income tax, sales tax, customs, notifications, and policies from the Federal Board of Revenue.

  • Penalty up to Rs3 million for failure to integrate business

    Penalty up to Rs3 million for failure to integrate business

    ISLAMABAD: The Federal Board of Revenue (FBR) may impose up to Rs3 million as a monetary penalty upon persons for failure to integrate their businesses with the online system under Sales Tax Act, 1990.

    An important amendment has been made through Tax Laws (Third Amendment) Ordinance, 2021, which was promulgated on September 15, 2021 through a presidential order.

    Serial No. 25A has been added to Section 33 of the Sales Tax Act, 1990 to prescribe penalty for non-integration of businesses under the sales tax regime.

    Text of the newly added Serial No. 25A of the Section 33 is:

    25A.  A person required to integrate his business as stipulated under sub-section (9A) of section 3, who fails to get himself registered under the Sales Tax Act,1990 and if registered, fails to integrate in the manner as required under the law and rules made thereunder.

    Such person shall be liable to pay

    (i) penalty of five hundred thousand rupees for first default;

    (ii) penalty of one million rupees for second default after fifteen days of order for first default;

    (iii) penalty of two million rupees for third default after fifteen days of order for second default;

    (iv) penalty of three million rupees for fourth default after fifteen days of order for third default:

    Provided that if such person fails to integrate his business within fifteen days of imposition of penalty for fourth default, his business premises shall be sealed till such time he integrates his business in the manner as stipulated under sub-section (9A) of section 3:

    Provided further that if the retailer integrates his business with the Board [FBR]’s computerized system before imposition of penalty for second default, penalty for first default shall be waived by the Commissioner.”

    The condition of making mandatory the integration of businesses has been introduced through sub-section 9A of the Section 3 of Sales Tax Act, 1990.

    Text of the sub-section 9A of Section 3 is:

    “(9A) Notwithstanding anything contained in this Act, Tier-1 retailers shall pay sales tax at the rate as applicable to the goods sold under relevant provisions of this Act or a notification issued thereunder:

    Provided further that from such date, and in such mode and manner, as prescribed by the Board, all Tier-1 retailers shall integrate their retail outlets with Board’s computerized system for real-time reporting of sales.”

    FBR to stop gas, electricity of unregistered persons
  • FBR to stop gas, electricity of unregistered persons

    FBR to stop gas, electricity of unregistered persons

    ISLAMABAD: Federal Board of Revenue (FBR) has been empowered to discontinue gas and electricity connections of any person who is making taxable supplies but not registered for sales tax.

    (more…)
  • Operator of online market place to withhold sales tax

    Operator of online market place to withhold sales tax

    ISLAMABAD: The operator of the online market place has been made liable to withholding sales tax on sales of goods.

    An important amendment has been made through Tax Laws (Third Amendment) Ordinance, 2001, which was promulgated on September 15, 2021 through a presidential order.

    A new proviso has been inserted to Section 3 of the Sales Tax Act, 1990 to make an operator of market place to withhold sales tax.

    The text of the new proviso is:

    “Provided that in case of the online market place facilitating the sale of third party goods, the liability to withhold tax on taxable supplies of such party at the rates specified in column (4) against S. No. 8 of the Eleventh Schedule to this Act, shall be on the operator of such market place.”

    According to the Eleventh Schedule of the Sales Tax Act, 1990, the online market place shall collect from persons other than active taxpayers the withholding sales tax at the rate of 2 per cent of gross value of supplies:

    Provided that the provisions of this entry shall be effective from the date as notified by the Board [Federal Board of Revenue].

    A new clause 18A was inserted to Section 2 of the Sales Tax Act, 1990 through Finance Act, 2021 to bring online market place under sales tax ambit.

    The text of clause 18A is:

    “(18A) online market place: includes an electronic interface such as a market place, e-commerce platform, portal or similar means which facilitate sale of goods, including third party sale, in any of the following manner, namely:–

    (a) by controlling the terms and conditions of the sale;

    (b) authorizing the charge to the customers in respect of the payment for the supply; or

    (c) ordering or delivering the goods.”

    Provisional valuation disallowed on existing VR
  • Exemption from penalty and default surcharge

    Exemption from penalty and default surcharge

    In a move aimed at providing flexibility and mitigating financial burdens for taxpayers, Section 183 of the Income Tax Ordinance, 2001 grants the Federal Board of Revenue (FBR) and the Commissioner Inland Revenue (IR) the authority to exempt individuals or classes of persons from penalties and default surcharges.

    (more…)
  • Returns filed after due date not to get ATL status

    Returns filed after due date not to get ATL status

    Section 182A of Income Tax Ordinance, 2001 describes that a person failed to file the income tax return by the due date will not get status of Active Taxpayers’ List (ATL) until the payment default surcharge.

    (more…)
  • Sales tax on high speed diesel reduced by 31.5%

    Sales tax on high speed diesel reduced by 31.5%

    ISLAMABAD: The federal government has announced a reduction of sales tax rate by 31.5 per cent on supply of High Speed Diesel (HSD). The rate sales tax on HSD has been reduced in order to lower the impact of higher prices pass on to the consumer.

    The Federal Board of Revenue (FBR) issued SRO 1225(I)/2021 dated September 18, 2021 to notify the reduction in sales tax on HSD.

    According to the SRO the sales tax rate on HSD has been reduced to 11.64 per cent from previous level of 17.00 per cent.

    Previously, the FBR issued SRO 1072(I)/2021 dated August 26, 2021 to revise the sales tax on petroleum products.

    In the latest SRO only sales tax rate on HSD has been reduced. The sales tax rates on other petroleum products have been kept unchanged. The sales tax rates on petroleum products are: Petrol 10.54 per cent; HSD 11.64 per cent; Kerosene oil 6.70 per cent; Light Diesel Oil 0.20 per cent.

    It is worth mentioning that the federal government on September 15, 2021 announced an increase in the prices of petroleum products.

    With the announcement the petrol prices have gone up to the all-time high level. However, it is even more important that the sales tax rates are on the lowest side when compared with the rates applicable during year 2015.

    The government has increased latest prices owing to fluctuations in petroleum prices in the international market and exchange rate variation.

    Following are the rates of petroleum products, which will take effect from September 16, 2021:

    The rate of petrol has been increased by Rs5 to Rs123.30 per liter from Rs118.30.

    The rate of high-speed diesel has been increased by Rs5.01 to Rs120.04 per liter from Rs115.03.

    The rate of kerosene oil has been increased by Rs5.46 to Rs92.26 per liter from Rs86.80.

    The rate of light diesel oil has been increased by Rs5.92 to Rs90.69 from Rs84.77.

    In the latest SRO 1225(I)/2021 dated September 18, 2021, the sales tax rates on petroleum products are: Petrol 10.54 per cent; HSD 11.64 per cent; Kerosene oil 6.70 per cent; Light Diesel Oil 0.20 per cent.

    The present sales tax rates on petroleum products are much lower when compared with sales tax rates prevailed about six years ago. The FBR issued SRO 963(I)/2015 dated September 30, 2015. The sales tax rates under this SRO are: Petrol 26 per cent; Kerosene 30 per cent; High Speed Diesel 50 per cent; Light Diesel Oil 29.50 per cent.

    Petrol price increased to all-time high at Rs123.30/liter
  • Penalty amount doubles for non-filer salaried persons

    Penalty amount doubles for non-filer salaried persons

    ISLAMABAD: The Federal Board of Revenue (FBR) will recover a minimum amount of Rs10,000 as a penalty from salaried persons, who failed to file an income tax return during a tax year.

    The minimum penalty has been increased from Rs5,000 to Rs10,000.

    The changes have been brought through Tax Laws (Third Amendment) Ordinance, 2021, which was promulgated through Presidential order on September 15, 2021. The amendment has been introduced to Section 182(1) of the Income Tax Ordinance, 2001.

    According to the amendment, where any person fails to furnish a return of income as required under Section 114 within the due date:

    “Such person shall pay a penalty equal to higher of –

    (a) 0.1 per cent of the tax payable in respect of that tax year for each day of default; or

    (b) rupees one thousand for each day of default:

    Provided that minimum penalty shall be —

    (a) rupees ten thousand in case of individual having seventy-five percent or more income from salary; or

    (b) rupees fifty thousand in all other cases:

    Provided further that maximum penalty shall not exceed two hundred percent of tax payable by the person in a tax year:

    Provided also that the amount of penalty shall be reduced by 75 per cent, 50 per cent and 25 per cent if the return is filed within one, two and three months respectively after the due date or extended due date of filing of return as prescribed under the law;

    Explanation.— For the purposes of this entry, it is declared that the expression “tax payable” means tax chargeable on the taxable income on the basis of assessment made or treated to have been made under sections 120, 121, 122 or 122D.

    The following link provides previous penalty amount for not furnishing returns:

    Penalty for non-filing tax return and wealth statement

  • Domestic electricity consumers to pay 35% additional AIT

    Domestic electricity consumers to pay 35% additional AIT

    The federal government of Pakistan has introduced an additional advance income tax (AIT) of up to 35% on the consumption of electricity by individuals not appearing on the Active Taxpayers List (ATL).

    (more…)
  • NADRA to compute indicative income, tax liability

    NADRA to compute indicative income, tax liability

    ISLAMABAD: National Database and Registration Authority (NADRA) has been empowered to compute indicative income and tax liability of persons using artificial intelligence and other modes.

    (more…)
  • FBR to block mobile phones of non-filers

    FBR to block mobile phones of non-filers

    ISLAMABAD: The Federal Board of Revenue (FBR) has been empowered under income tax statute to block mobile phones or mobile phone SIMs of persons who have taxable income but remained non-filer of annual return.

    The government promulgated Tax Laws (Third Amendment) Ordinance, 2021, and made major amendments to the Income Tax Ordinance, 2001.

    As per the amendments, the FBR has been empowered to take strict actions against non-filers, including blocking mobile phones or mobile phone SIMs. Besides, the tax authorities have also powers to give orders to utility companies for discontinuations of electricity connection and gas connection of non-filer.

    Section 114B has been introduced through the Tax Law to the Income Tax Ordinance, 2001.

    Following is the text of the new Section:

    “114B. Powers to enforce filing of returns. — (1) Notwithstanding anything contained in any other law for the time being in force, the Board shall have the powers to issue income tax general order in respect of persons who are not appearing on Active Taxpayers List (ATL) but are liable to file return under  the provisions of this Ordinance.

    (2) The income tax general order issued under sub-section (1) may entail any or all of the following consequences for the persons mentioned therein, namely:-

    — disabling of mobile phones or mobile phone sims;

    — discontinuance of electricity connection; and

    — discontinuance of gas connection.

    (3) The Board or the Commissioner having jurisdiction over the person mentioned in the income tax general order may order restoration of mobile phones, mobile phone sims and connections of electricity and gas, in cases where he is satisfied that —

    (a) the return has been filed; or

    (b) person was not liable to file return under the provisions of this Ordinance.

    (4) No person shall be included in the general order under sub-section (1) unless following conditions have been met with, namely:-

    (a) notice under sub-section (4) of section 114 has been issued;

    (b) date of compliance of the notice under sub-section (4) of section 114 has elapsed; and

    (c) the person has not filed the return.

    (5) The action under this section shall not preclude any other action provided under the provisions of this Ordinance.

    Businesses require displaying NTN