ISLAMABAD: Customs authorities have been empowered to confiscate properties that are acquired through proceeds of smuggling.
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Customs Rules tightened for International Transshipment
ISLAMABAD: Federal Board of Revenue (FBR) has tightened the monitoring of international transshipment of imported cargo from gateway port to a foreign port.
The FBR issued SRO 03(I)/2021 to amend Customs Rules, 2001.
The FBR amend Rule 510A regarding transshipment of imported cargo from gateway port to a foreign port and made it mandatory the weight, seal number and container number for international transshipment cargo.
The following procedure has been prescribed for the movement of the International Transshipment cargo other than LCL cargo through any sea port in Pakistan, which shall be distinctly manifested as such in the IGM or carrier declaration uploaded electronically in the Customs Computerized System by the shipping line (VOCCs/NVOCCs) having valid shipping agent licenses. Such manifest shall necessarily include the following information, namely:
(a) Port of loading;
(b) Via port (name of the transshipment port of Pakistan);
(c) Port of destination (final port of discharge at foreign destination);
(d) Bill of lading (B/L) No.;
(e) Name of foreign exporter;
(f) Name of foreign importer;
(g) Weight;
(h) Seal No.; and
(i) Container No.
The FBR made amendment to rule 510B and stated that the Terminal Operator (TO) after unloading shall store International Transshipment containers at a place earmarked for them in the notified premises of a seaport. Further, a complete trail of IT containers including the time, location where they are placed and subsequent movements shall be electronically reported and updated in the Customs Computerized System by the Terminal Operator so that the location of the said containers is traceable at any given point in time.
Further, the terminal operator shall deploy enough manpower to verify the shipper seals against the manifested seals and in case, a container is found without seal or with a different seal or any broken seal, such container shall be re-sealed and immediately released with the Customs seal in the presence of the custodian and same shall be recorded. The new seal number will be entered into the system before stacking of the container.
Rule 510D regarding delay in clearance of transshipment goods has been substituted. Following is the text of the substituted rule:
(1) The International Transshipment goods shall not be subject to payment of import or export duties and taxes provided the activities are in conformity with these rules.
(2) If the goods stores for transshipment are not transshipment within thirty days of their arrival, a notice shall be sent to the shipping line or its agent on the address given in the shipping documents for transshipment of goods from the port. An extension of up to thirty days may be granted for the storage of such goods once a written request mentioning the reasons for delay in removal of goods in submitted to the concerned assistant collector of customs and such a request is approved by him.
(3) If goods still remain on the port after sixty days of their arrival, the shipping line shall be responsible to remove them immediately unless the delay is attributed to the port authorities. The goods shall only be allowed for auction or destruction by approval of the concerned collector of customs who shall only allow in extraordinary conditions where the shipping line shows its complete inability to ship them out. The said reasons shall be recorded in writing.
(4) In case of any hazardous material left at the port, the concerned shipping line shall have the responsibility to take the cargo back to the port of origin.
The Rule 510E has also be amended and substituted the following text:
“Execution of bond by shipping line: Shipping lines engaged in the business of international transshipment of containers and bulk cargo shall execute an indemnity bond for ensuring to follow customs rules and regulations.”
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FBR sets up cell for registration of manufacturers for concessionary power, gas tariff
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday established a cell for registration of manufacturers in export-oriented sector to allow concessionary tariff on supply of electricity and gas.
The FBR issued an office order to set up Export-oriented Sector Registration Cell (ESRC) for manufacturers of export-oriented sectors (erstwhile zero-rated sector) to process requests for concessionary tariff rates on supply of electricity and gas.
The FBR deputed officers to the cell, who are included: Khalid Mehmood, Second Secretary (ST-L&P), Imran Ullah Khan, Senior Auditor (ST-L&P) and Majid Hussain Abbasi, Inspector (ST-L&P).
The functions of the ESRC are to:
Examine the particulars and recommendations of the respective associations and counter-verify particulars of the taxpayer including declarations in the registration profile etc. as required, and forward the case to the ministry of commerce for further necessary action.
Liaise with Inland Revenue field formations for ground-check, report and recommendations, in case any discrepancies in the verification report and data available with the FBR are spotted.
Earlier in a notification issued on December 30, 2020, the FBR said that the economic coordination committee of the cabinet had approved the reduced rate to manufacturers on supply of electricity and gas in a meeting held on December 12, 2020. The ECC also directed the FBR, ministry of commerce and other stakeholders to devise a standard operating procedure (SOP) for enrollment of registered persons under the export-oriented sectors (erstwhile zero-rated sectors) to quality concessionary regime of electricity, RLNG and gas tariff.
Accordingly, a meeting was held in FBR on December 22, 2020 and as a result of thorough deliberations amongst all stakeholders the requisite SOP has been agreed upon and being rolled onto.
The FBR said the following SOP adopted for enrollment of manufacturers for grant of reduced tariff rate:
(i) For new registration of manufacturers for concessionary tariff rates, applicants may apply respective representative association.
(ii) The Association concerned, after verifying the particulars on the prescribed format, may forward the application along with its element recommendations, duly signed by its chairman/president, to the export oriented sector registration cell (ESRC) of the FBR.
(iii) The ESRC shall examine the particulars and recommendations of the respective associations and counter-verify particulars of the taxpayer including declarations in the registration profile etc. as required, and forward the case to the ministry of commerce for allowing concessionary tariff through respective Distribution Companies (DISCOs)/Gas companies.
(iv) In case the ESRC spots any discrepancies in the verification report and data available with the FBR, the matter will be referred to Inland Revenue field formations for ground-check, report and recommendations.
(v) The newly enrolled taxpayers shall be entitled to avail concessionary tariff prospectively.
(vi) The DISCOs/gas companies shall ensure that the taxpayers are active on FBR’s (Sales Tax) Active Taxpayers List (ATL) as shared with DISCOs/gas companies each month before generating the monthly utility bills. In case the taxpayer is found non-active on the ATL, standard utility tariff shall apply on supply of utilities for the relevant period.
(vii) Any taxpayer aspiring to avail concessionary utility rates and who is not registered with the respective sector association, may approach the Inland Revenue field formation concerned for verification of its business particulars and onward submission of report on the prescribed format to the RSRC within 15 days of the submission of the application.
The procedure for the registration of new entrants in export oriented sectors shall become applicable with effect from January 01, 2021.
Following is the list of export oriented sectors associations:
01. All Pakistan Textile Mills Association (APTMA)
02. Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA)
03. Pakistan Hosiery Manufacturers Association (PHMA)
04. Pakistan Textile Exporters Association (PTEA)
05. Pakistan Leather Garments Manufacturers & Exporters Association (PLGMEA)
06. Pakistan Sports Goods Manufacturers & Exporters Association
07. Surgical Instruments Manufacturing Association of Pakistan
08. Pakistan Denim Manufacturers and Exporters Association
09. All Pakistan Textile Processing Mills Association (APTPMA)
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Javed Ghani assumes charge as 30th FBR chairman
ISLAMABAD: Muhammad Javed Ghani, a BS-22 officer of Pakistan Customs Service, has assumed the charge as regular chairman of Federal Board of Revenue (FBR) after serving on the same post as additional charge for almost six months.
He is 30th chairman of the organization including the tenure of additional charge from July 07, 2020 to January 03, 2021.
A notification issued by the revenue body stated that Muhammad Javed Ghani relinquished the charge of the post of Member (Customs-Policy), FBR on January 04, 2021 and assumed the charge of the post of chairman, FBR, Islamabad on the same date.
Javed Ghani is an expert in Customs and Tax Matters, Tax and Trade Law, Procedures and Trade Facilitation.
Earlier worked on various senior and mid level policy making as well as operational positions at the Federal Board of Revenue Headquarters and across the country at various ports, airports and border customs offices including Karachi and Islamabad airports and Gawadar Sea Port, Sost (border with China), Chaman (border with Afghanistan), Taftan (border with Iran), Karachi Sea Port, Quetta, Lahore, Rawalpindi and Sialkot Inland Ports, with responsibility to suggest legal changes and oversee implementation of customs and trade laws as well as cross border trade.
He holds Master of Laws Degree in International Economic Law, with Distinction, from the Warwick University, United Kingdom, and Masters Degree in Economics, with Distinction, from the Government College (Punjab University), Lahore, Pakistan.
Articles and research papers include, “Developing Web of International Economic Corridors & Pakistan”, “Review of Afghanistan Pakistan Transit Trade”, “WTO, Trade Facilitation and Pakistan Customs”, “Trade Facilitation Negotiations in the WTO, the divisions, crucial elements and the best way forward”, “The definition of Geographical Indications in the TRIPS (Trade Related Aspects of Intellectual Property Rights) Agreement in relation to the ongoing debate in the WTO on expanding the scope of Article 23”, and “Electronic Filing of the Goods Declarations in One-Customs and the Legal Gaps”.
Javed Ghani attended various international conferences and training courses in countries including Bangladesh, Belgium, Canada, China, France, Japan, Kazakhstan, Phillippines, Russia, South Korea, Tajikistan, Thailand, Turkey, United Kingdom, and the United States.
In the existing setup, the Chairman, FBR/Secretary Revenue Division, being the executive head of the Board and has the responsibility for:
(i) formulation and administration of fiscal policies,
(ii) levy and collection of federal taxes and
(iii) quasi-judicial function of hearing of appeals.Chairman responsibilities also involve interaction with the offices of the President, the Prime Minister, all economic Ministries as well as trade and industry.
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Chief Commissioners to appoint officials of BS-1 to BS-15 in field offices
ISLAMABAD: Federal Board of Revenue (FBR) has authorized Chief Commissioners of Inland Revenue to appoint officials of BS-1 to BS-15 in field offices, sources said on Wednesday.
According to the sources the FBR chairman has designated officers to exercise powers of appointing authority.
The FBR chairman being the secretary, revenue division is authorized to appoint officials for the post in basic pay scales 17 to 19 or equivalent.
Members FBR have been designated as appointing authority for the post of basic pay scales 16 or equivalent in FBR Headquarters and field offices.
The sources said that the Chief Commissioners in BS-20/21, Director Generals BS20/21, chief collectors of Pakistan Customs BS-20/21 and Collectors of Pakistan Customs BS-20 have been authorized to appoint officials in BS-1 to 15 of field offices of the FBR.
Further, Chief (HRM-IR) has been designated to appoint officials for the post in basic pay scales 8 to 15 or equivalent in FBR (HQ).
Meanwhile, Chief (Admin & Finance) has been authorized to appoint officials for the post in basic pay scales 1 to 7 or equivalent in FBR (HQ).
The sources said that the officers have been given the powers of authority under the Civil Servants (Efficiency & Discipline) Rules, 2020.
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FBR to impose 100 percent penalty for not mentioning money in tax returns
ISLAMABAD: Federal Board of Revenue (FBR) has started examination of income tax returns filed for tax year 2020 and directed tax offices to identify undisclosed income / amount for imposing 100 percent penalty.
According to sources in the FBR the tax authorities had started examination of tax returns filed for the tax year 2020 and were cross matching with the information of database where details of transactions made by taxpayers had been stored.
The sources said that those taxpayers, who had failed to provide details of those transactions already available to the FBR through third party information, would pay tax at normal rate along with payment of penalty equal to payable tax detected as undisclosed.
The last date for filing the income tax return for tax year 2020 was December 08, 2020 and the FBR for the first time had not extended the date beyond the deadline. The number of return filers by due date was 1.768 million. However, enforcement measures through issuance of hundreds of thousands notices to non filers the number of return filers increased to 2.316 million January 04, 2021.
The sources said that the tax offices were examining tax returns with all aspects of Income Tax Ordinance, 2001. However, undeclared income or assets in the returns will be treated as concealment of income/assets.
Under Section 182 of the Income Tax Ordinance, 2001, where a person has concealed income or furnished inaccurate particulars of such income, including but not limited to the suppression of any income or amount chargeable to tax, the claiming of any deduction for any expenditure not actually incurred or any act referred to in sub-section (1) of section 111, in the course of any proceeding under this Ordinance before any Income Tax authority or the appellate tribunal.
“Such person shall pay a penalty of one hundred thousand rupees or an amount equal to the tax which the person sought to evade whichever is higher. However, no penalty shall be payable on mere disallowance of a claim of exemption from tax of any income or amount declared by a person or mere disallowance of any expenditure declared by a person to be deductible, unless it is proved that the person made the claim knowing it to be wrong.”
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FBR to issue ATL 2020 on March 01
ISLAMABAD: Federal Board of Revenue (FBR) will issued Active Taxpayers List (ATL) for tax year 2020 on March 01, 2021 which will contain names of those taxpayers who file their returns by due date or file return after due date with fine and penalty.
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Inland Revenue examines persons buying motor vehicles through customs auction
KARACHI: The office of Inland Revenue (IR) of Federal Board of Revenue (FBR) has launched examination of persons who purchased large number of vehicles through customs auctions.
Sources in IR said on Monday that the probe had been initiated on the directives of the Federal Tax Ombudsman (FTO) regarding some bidders were frequently indulged in participating in bidding and buying large number of vehicles.
The FTO in a case of stuck up motor vehicles at ports, which were brought into Pakistan through personal baggage, transfer of residence or under gift schemes in violation of SRO 52(I)/2019 dated January 15, 2019 issued by the ministry of commerce.
As per details till November 25, 2020 the number of stuck up vehicles were 587 at the MCC East and West. Around 167 vehicles were auctioned till the date under review.
During the investigation of the case the FTO was told that a small number of so-call professional bidders purchased large number of vehicles regularly and then sell the same on huge profit in the open market.
“One of the reasons of purchase of vehicles by these bidders is that many interested persons from the general public either do not possess NTN or they don’t want to bring their names on record due to various reasons including subsequent taxation, hence, they prefer to purchase goods or vehicles through these bidders,” the FTO was informed.
The FTO was further informed that 62 bidders had purchased 167 vehicles auctioned during the period from July to November 2020, which 20 bidders purchased 117 vehicles.
The sources said that the FTO was told that an e-auction was to be introduced by the FBR and in this regard SRO 1174(I)/2020 dated October 26, 2020 was already issued.
However, date for implementation of e-auction rules would not be notified by the FBR later on as the e-auction module is still under development.
Customs authorities assured the FTO stating that after implementation of e-auction, the goods ripe for auction would be disposed of without delay, besides, the mafia of professional bidders would be addressed, resulting in improvement in revenue realization.
The findings of the FTO revealed: “During investigation, another aspect came to surface i.e. whether the bidders who participate in the auction proceedings declare their economic activities in their income tax returns.
“It is most probable that these economic activities may not be monitored by the IRS Wing, which if monitored carefully with due diligence may enhance legitimate revenue of the government.
“Thus, there is a need to share data/information with the concerned field formations of Inland Revenue so that this sector is brought into the tax net.”
The FTO recommended that the Collector, MCC Appraisement and Facilitation East and West, Karachi to pass on information about the bidders who participated in auctions on regular basis to respective IRS field formations.
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FBR directs issuing exemption certificates to gratuity, provident funds
ISLAMABAD: Federal Board of Revenue (FBR) has issued directives for grant of income tax exemption to gratuity and provident funds.
Through an office order, the FBR issued directives on complaints received from taxpayers that tax offices were refusing to grant income tax exemption against gratuity funds/ provident funds.
The FBR expressed concern on the treatment being given by some field formations on the provident funds/ gratuity funds requests for exemption certificates under section 159/150/151 of the Income Tax Ordinance, 2001.
The FBR said that the taxpayers had pointed out the exemption granted to the funds prior to tax year 2013, the tax offices were refusing the request for exemption certificates.
The tax offices were asking the taxpayers to move fresh applications for recognition of the funds on the pretext that the fact of their approval is not available/evident in the FBR’s system IRIS.
The FBR clarified the position by stating that the exemption requests of recognized provident/gratuity funds cannot be refused. Therefore, the revenue body directed the tax offices to process the exemption certificate requests of all the provident / gratuity funds who produce evidence of recognition under the relevant rules framed under the Income Tax Ordinance, 2001 or repealed law Income Tax Ordinance, 1979.
“Further, asking for fresh applications for recognition merely on the pretext that such recognition is not available on the system is not a valid excuse,” the FBR directed.
However, the FBR cautioned the tax offices: “Mere issuance of exemption certificate under section 159 of the Income Tax Ordinance, 2001 does not foreclose the possibility of reviewing/recalling such action in case it is later-on discovered that the taxpayer produced some incorrect/invalid or wrong evidence for obtaining the favor.”
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Sales tax recovery: movable, immovable property may be sold without attachment
ISLAMABAD: Sales tax laws have given immense powers to officers of Inland Revenue and they can recover due sales tax by selling movable or immovable property without attachment.
Sources in Federal Board of Revenue (FBR) told PkRevenue.com that under Section 48 of the Sales Tax Act, 1990 a mechanism for recovery of arrears of tax has been defined.
For the purpose of recovery of tax, penalty or any other demand raised under this Sales Tax Act, 1990, the officer of Inland Revenue shall have the same powers which under the Code of Civil Procedure 1908 (V of 1908), a Civil Court has for the purpose of recovery of an amount due under a decree.
They said that Section 48(1)(b)(c) clearly mentioned that tax officials may attach and sell or sell without attachment any movable or immovable property of the registered person from whom tax is due.
The tax officers are also empowered to recover the sales tax amount from a person whose amount is stuck up with other tax authorities.
“[The tax officers may] deduct the amount from any money owing to person from whom such amount is recoverable and which may be at the disposal or in the control of such officer or any officer of Income Tax, Customs or Central Excise Department,” according to the law.
The officers of Inland Revenue can order any person who holds money of a person in default, besides the officers can also:
“Stop removal of any goods from the business premises of such person till such time the amount of tax is paid or recovered in full;
“require by a notice in writing any person to stop clearance of imported goods or manufactured goods or attach bank accounts;
“seal the business premises till such time the amount of tax is paid or recovered in full;
“recover such amount by attachment and sale of any movable or immovable property of the guarantor, person, company, bank or financial institution, where a guarantor or any other person, company, bank or financial institutions fail to make payment under such guarantee, bond or instrument.”
Provided that the Commissioner Inland Revenue or any officer of Inland Revenue shall not issue notice under this section or the rules made thereunder for recovery of any tax due from a taxpayer if the said taxpayer has filed an appeal under section 45B in respect of the order under which the tax sought to be recovered has become payable and the appeal has not been decided by the Commissioner (Appeals), subject to the condition that ten per cent of the amount of tax due has been paid by the taxpayer.
“If any arrears of tax, default surcharge, penalty or any other amount which is adjudged or payable by any person and which cannot be recovered in the manner prescribed above, the Board or any officer authorized by the Board, may, write off the arrears in the manner as may be prescribed by the Board, the FBR said.