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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.

  • Updated rates of regulatory duty on import of motor vehicles into Pakistan

    Updated rates of regulatory duty on import of motor vehicles into Pakistan

    The Federal Board of Revenue (FBR) has issued latest rates of regulatory duty applicable on import of motor vehicles into Pakistan. The rates are applicable from July 01, 2021.

    In order to apply the rates of the regulatory duty the FBR issued SRO 840(I)/2021 dated June 30, 2021.

    Following are the rates of regulatory duty on motor vehicles, along with HS Code, description and rate of regulatory duty:

    8703.2193 New 4×4 vehicles in completely built unit (CBU):  15 per cent

    8703.2195 New Mini vans (CBU): 15 per cent

    8703.2199 Other (New): 15 per cent

    8703.2220 New Vehicles of a cylinder capacity exceeding 1000cc but not exceeding 1300cc: 15 per cent

    8703.2240 New Mini vans (CBU): 15 per cent

    8703.2260 New Sport utility vehicles: 15 per cent

    8703.2290 Other (New): 15 per cent

    8703.2313 New Sport utility vehicles: 15 per cent

    8703.2319 Other (New): 15 per cent

    8703.2323 New Sport utility vehicles (SUVs 4×4): 90 per cent

    8703.2323 Old and used sport utility vehicles 1801cc to 3000cc: 70 per cent

    8703.2329 Other (New): 90 per cent

    8703.2329 Old and used cars and Jeeps 1801 cc to 3000cc: 70 per cent

    8703.2490 Other (New): 90 per cent

    8703.2490 Old and used cars and jeeps above 3000 cc: 70 per cent

    8703.3129 Other (New): 15 per cent

    8703.3139 Other (New): 15 per cent

    8703.3219 Other (New): 15 per cent

    8703.3223 New Sport utility vehicles (SUVs 4×4): 90 per cent

    8703.3223 Old and used sport utility vehicles above 2000cc: 70 per cent

    8703.3225 New All-terrain vehicles (4×4): 90 per cent

    8703.3225 Old and used All terrain vehicles (CBU): 70 per cent

    8703.3229 Other (New): 90 per cent

    8703.3229 Old and used cars and jeeps above 2000 cc: 70 per cent.

  • Taxpayers require to declare assets, income along with annual return

    Taxpayers require to declare assets, income along with annual return

    ISLAMABAD: A statement of wealth is mandatory for filing annual income tax return, which should include details of total assets and liabilities.

    The FBR has opened the IRIS portal for filing income tax return for tax year 2021 for taxpayers including salaried persons, business individuals, Association of Persons (AOPs) and companies have special tax year. The last date for filing the tax return for such taxpayers is September 30, 2021.

    Officials in the FBR said that the taxpayers are required to file wealth statement as well along with the annual return of income for tax year 2021.

    According to Section 116 of Income Tax Ordinance, 2001, the wealth statement is a must document to complete the income tax return.

    The section stated as:

    Wealth statement.— (1) The Commissioner may, by notice in writing, require any person being an individual to furnish, on the date specified in the notice, a statement (hereinafter referred to as the “wealth statement”) in the prescribed form and verified in the prescribed manner giving particulars of —

    (a) the person’s total assets and liabilities as on the date or dates specified in such notice;

    (b) the total assets and liabilities of the person’s spouse, minor children, and other dependents as on the date or dates specified in such notice;

    (c) any assets transferred by the person to any other person during the period or periods specified in such notice and the consideration for the transfer;

    (d) the total expenditures incurred by the person, and the person’s spouse, minor children, and other dependents during the period or periods specified in the notice and the details of such expenditures; and

    (e) the reconciliation statement of wealth.

    (2) Every resident taxpayer being an individual filing a return of income for any tax year shall furnish a wealth statement and wealth reconciliation statement for that year along with such return:

    Provided that every member of an association of persons shall also furnish wealth statement and wealth reconciliation statement for the year along with return of income of the association.

    (3) Where a person, who has furnished a wealth statement, discovers any omission or wrong statement therein, he may, without prejudice to any liability incurred by him under any provision of this Ordinance, furnish a revised wealth statement along with the revised wealth reconciliation and the reasons for filing revised wealth statement, under intimation to the Commissioner in the prescribed form and manner, at any time before the receipt of notice under sub-section (9) of section 122, for the tax year to which it relates:

    Provided that where the Commissioner is of the opinion that the revision under this sub-section is not for the purpose of correcting a bona fide omission or wrong statement, he may declare such revision as void through an order in writing after providing an opportunity of being heard.

    Explanation.- For the removal of doubt it is clarified that wealth statement cannot be revised after the expiry of five years from the due date of filing of return of income for that tax year.

  • FBR constitutes committee for penalty on non-compliance of invoice, packing lists

    FBR constitutes committee for penalty on non-compliance of invoice, packing lists

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday constituted a committee to formulate parameters for imposing penalties against non-compliance of invoice and packing list.

    A spokesman said that the Federal Board of Revenue (FBR) has constituted a committee of senior Customs officers to formulate rules to implement Section 156(I) of the Customs Act, 1969, which was amended through the Finance Act, 2021.

    The spokesman said that provision of law prescribes certain penalties for not placing invoice, packing list inside the container or failure to attach or upload mandatory documents with the goods declaration (GD).

    The committee will formulate rules to develop parameters to specify the person and circumstances in which the penalty prescribed for non-placement of invoice and packing list shall be imposed.

    The committee will also identity different types of GDs and prescribe documents that are considered mandatory for submission along with those GDs.

    FBR has explained that the rules will be notified in due course of time and till framing of rules, no action shall be taken in this matter.

    FBR has assured the trade bodies that the subject provisions will be applicable only after notification of rules by FBR.

    Meanwhile the earlier practice will be continued by the Customs field formations. Moreover, after submission of draft rules by the committee, FBR will publish these draft rules on the FBR website for seeking input from all stakeholders before implementing the same.

  • Regulatory duty on exports reduced

    Regulatory duty on exports reduced

    KARACHI: The Federal Board of Revenue (FBR) has slashed regulatory duty up to half on export of goods.

    The FBR issued SRO 843(I)/2021 dated June 30, 2021 to amend the SRO 645(I)/2018 dated May 24, 2018, which is related to regulatory duty on export of goods.

    According to the latest SRO the regulatory duty on export of hides and skins has been reduced to 10 per cent from 20 per cent.

    Similarly, the regulatory duty on export of molasses has been reduced to 10 per cent from 15 per cent.

  • Additional customs duty at 7% slapped on imports under tariff slab of 30% and above

    Additional customs duty at 7% slapped on imports under tariff slab of 30% and above

    The Federal Board of Revenue (FBR) has announced the imposition of additional customs duty (ACD) ranging from 2% to 7% on specific imports falling under various tariff slabs, with the new rates taking effect from July 1, 2021.

    (more…)
  • Sales tax rate on petrol slashed

    Sales tax rate on petrol slashed

    ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday reduced sales tax to 16.40 per cent ad valorem on supply of petrol.

    The FBR issued SRO 860(I)/2021 to reduce the sales tax on petrol.

    Through the SRO the sales tax rate on petrol has been reduced to 16.40 per cent ad valorem from 17 per cent.

    The sales tax rates on kerosene oil and light diesel are 6.7 per cent and 0.20 per cent, respectively.

    The FBR kept the sales tax rate at 17 per cent unchanged for high speed diesel oil.

    The rates of sales tax on petroleum products have been reduced so the government absorbs the high prices in the international markets and pass on the lesser effect to the consumers.

  • FBR directs car manufacturers to pay KIBOR+3% on late delivery

    FBR directs car manufacturers to pay KIBOR+3% on late delivery

    KARACHI: In order to avail concessionary rate of duty and taxes, the Federal Board of Revenue (FBR) has made it mandatory for car manufacturers to pay KIBOR+3 on late delivery of motor vehicles.

    In order to implement the decision, the FBR issued SRO 837(I)/2021. The FBR said: “The concessionary customs duty for various models of new entrants under Automotive Development Policy (ADP) 2016-21 to continue for five years from date of first manufacturing certificate of respective various issued by the Engineering Development Board (EDP) or up to June 30, 2026, whichever is earlier.

    “The importer-cum-assembler or Original Equipment Manufacturer (OEM) shall pay KIBOR+3 per cent per annum to the customer against late delivery exceeding 60 days of initial booking on the whole of the deposited amount. Statement/details of reimbursement at KIBOR+3 per cent against deliveries beyond 60 days shall be submitted to EDB or Input-output Coefficient Organization (IOCO) bi-annually.”

  • FBR prescribes minimum output of steel products for sales tax payment

    FBR prescribes minimum output of steel products for sales tax payment

    ISLAMABAD: The Federal Board of Revenue (FBR) has prescribed minimum production of steel products for payment of sales tax under Thirteenth Schedule of Sales Tax Act, 1990.

    According to Finance Act, 2021 an amendment has been made to Section 3 of the Sales Tax Act, 1990 in respect of goods, specified in the Thirteenth Schedule, the minimum production for a month shall be determined on the basis of a single or more inputs as consumed in the production process as per criterion specified in the Thirteenth Schedule and if minimum production so determined exceeds the actual supplies for the month, such minimum production shall be treated as quantity supplied during the month and the liability to pay tax shall be discharged accordingly.

    In the Thirteenth Schedule following has been inserted:

    Minimum production of steel products.—

    The minimum production for steel products shall be determined as per criterion specified against each in the Table below:

    S. No.ProductProduction criteria
    (1)(2)(3)
    1.Steel billets and ingotsOne metric ton per 700 kwh of electricity consumed
    2.Steel bars and other re-rolled long profiles of steelOne metric ton per 110 kwh of electricity consumed
    3.Ship plates and other re-rollable scrap85% of the weight of the vessel imported for breaking”; and

    Procedure and conditions:—

    (i) both actual and minimum production and the local supplies shall be declared in the monthly return. In case, the minimum production exceeds actual supplies for the month, the liability to pay tax shall be discharged on the basis of minimum production:

    Provided that in case, in a subsequent month, the actual supplies exceed the minimum production, the registered person shall be entitled to get adjustment of excess tax on account of excess of minimum production over actual supplies:

    Provided further that in a full year, as per financial year of the company or registered person, or period starting from July to June of next year, in other cases, the tax actually paid shall not be less than the liability determined on the basis of minimum production for that year and in case of excess payment no refund shall be admissible:

    Provided also that in case of ship-breaking, the liability against minimum production, or actual supplies, whichever is higher, shall be deposited on monthly basis on proportionate basis depending upon the time required to break the vessel;

    (ii) the payment of tax on ship plates in aforesaid manner does not absolve ship breakers of any tax liability in respect of items other than ship plates obtained by ship-breaking;

    (iii) the melters and re-rollers employing self-generated power shall install a tamperproof meter for measuring their consumption. Such meter shall be duly locked in room with keys in the custody of a nominee of the Commissioner Inland Revenue having jurisdiction.

    The officers Inland Revenue having jurisdiction shall have full access to such meter;

    (iv) the minimum production of industrial units employing both distributed power and self-generated power shall be determined on the basis of total electricity consumption.

  • Online market places to collect 2% withholding sales tax

    Online market places to collect 2% withholding sales tax

    ISLAMABAD: The online market places have been brought into the tax net as through the Finance Act, 2021 the owner of online market place has been made withholding agent and made responsible for collecting withholding tax at two per cent on sales made through digital platform.

    A new definition has been including in the Sales Tax Act, 1990 through the Finance Act, 2021, which stated: 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.

    In the Eleventh Schedule of the Sales Tax Act, 1990, the owner of online market place shall collect two per cent of gross value of supplies from persons other than active taxpayers.

    However, the law explained that the provision of this entry would be effective from the date as notified by the FBR.

  • Income tax exemption granted to international buying houses

    Income tax exemption granted to international buying houses

    ISLAMABAD: Federal Board of Revenue (FBR) has said that international buying house act as facilitator for exports from Pakistan to their principals abroad.

    “In order to reduce disputes the amount remitted in foreign exchange to meet the expense of these buying houses by their principals has been exempted from tax,” the FBR said while explaining the major changes to Income Tax Ordinance, 2001 through Finance Act, 2021.

    Moreover, the salary of non-resident foreign experts employed/ engaged by international buying houses has been exempted from tax if such experts perform duties for these international buying houses. These exemptions have been incorporated in clause (149) of Part I of the Second Schedule to the Ordinance.

    According to amended clause 149:

    Any sum—

    (i) remitted to Pakistan through banking channels in foreign currency received by an international buying house from its non-resident principal to meet its expenses in Pakistan; and

    (ii) chargeable under the head “Salary” received by a person who, not being a citizen or resident of Pakistan, is engaged as an expert by an international buying house.

    Explanation.—For the purpose of this clause international buying house means persons acting as buying offices, buyers’ agents, or representatives of international buyers for facilitating exports from Pakistan and are registered as liaison offices with Board of Investment or companies registered with SECP. Provided that such buying houses act as cost centers with the sole purpose to bring export orders to Pakistan on behalf of their principals and do not enter into any local business transactions in Pakistan and their expenses are remitted to Pakistan.