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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.

  • FBR promotes 49 Inland Revenue Officers to Assistant Commissioner BS-17

    FBR promotes 49 Inland Revenue Officers to Assistant Commissioner BS-17

    ISLAMABAD: Federal Board of Revenue (FBR) o Wednesday promoted 49 officers of Inland Revenue from BS-16 to the post of Assistant Commissioner Inland Revenue (BS-17) with immediate effect.

    Following are the officers, who are promoted by the FBR:

    01. Farrukh Rehman, Regional Tax Office (RTO), Faisalabad

    02. Amjad Ali Khan, Corporate RTO, Lahore

    03. Kanwar Abdul Rahim, RTO Multan

    04. Muhammad Akbar, RTO Multan

    05. Iftikhar Ahmad Lali, RTO Faisalabad

    06. Malik Muhammad Arshad, Corporate RTO, Lahore

    07. Mehrur Rehman, RTO Peshawar,

    08. Abid Hussain, RTO Peshawar

    09. Fazl-e-Amin, RTO Peshawar

    10. Asim Sana Naik, Corporate RTO Lahore

    11. Khuda Bux Abbasi, RTO Sukkur

    12. Tafukhur Zahoor, Directorate of Internal Audit (IR), Lahore

    13. Muhammad Pervez Khan, Large Taxpayers Unit (LTU) Karachi

    14. Darshan Lal, Corporate RTO Karachi

    15. Muhammad Khan, Corporate RTO Lahore

    16. Tauheed Raziq Khan, RTO Multan

    17. Muhammad Humayun, RTO Peshawar

    18. Aslam Pervez, RTO Peshawar

    19. Qaisar Khan, RTO Peshawar

    20. Mazhar Javed, RTO Sahiwal

    21. Muhammad Zafar Iqbal, RTO Multan

    22. Muhammad Mazhar Ejaz, RTO Faisalabad

    23. Ashfaq Ahmed, LTU Karachi

    24. Muhammad Yaqub Malik, RTO Islamabad

    25. Akbar Ali Shad, Internal Audit (IR) Islamabad

    26. Muhammad Mohsin, RTO-II Islamabad

    27. Farasat Yar Khan, Corporate RTO Karachi

    28. Ejaz Iqbal Raja, RTO Rawalpindi

    29. Muhammad Asghar, RTO Faisalabad

    30. Azizur Rehman Awan, RTO Quetta

    31. Saleem Raza, RTO Sargodha

    32. Abdul Qayyum, LTU Islamabad

    33. Ansar Hussain, Internal Audit IR Rawalpindi

    34. Zia Ahmad Butt, LTU Islamabad

    35. Muhammad Rafiq Awan, LTU Karachi

    36. Khalid Ali Siddiqui, LTU II Karachi

    37. Muhammad Irfan Siddiqui, LTU Karachi

    38. Mustafa Tayyab Ali, Corporate RTO Karachi

    39. Muhammad Naeem Sialvi, RTO II Lahore

    40. Aftab Ahmad Nasir, RTO Faisalabad

    41. Javed Iqbal, RTO Faisalabad

    42. Muhammad Altaf Anjum, RTO Faisalabad

    43. Jamshed Khan, Directorate of Intelligence and Investigation, IR, Peshawar

    44. Muhammad Zafar, RTO Islamabad

    45. Ishtiaq Ahmed, RTO Gujranwala

    46. Mehboob Ahmed, RTO Gujranwala

    47. Mehboob Ahmad, RTO Gujranwala

    48. Noor Muhammad Baloch, RTO III Karachi

    49. Muhammad Shahzad, Corporate RTO Karachi

    The FBR said that the promotion would take effect from the date of their joining, subject to the

    conditions that no disciplinary proceedings are pending against them.

  • Sales Tax Act 1990: refund of input tax payable in 45 days

    Sales Tax Act 1990: refund of input tax payable in 45 days

    KARACHI: Federal Board of Revenue (FBR) is required to pay sales tax refunds to the taxpayers in 45 days from the date of filing claim.

    According to recently updated Sales Tax Act, 1990 issued by the FBR, the Section 10 explained the refund of input tax.

    Section 10: Refund of input tax

    Sub-Section (1): If the input tax paid by a registered person on taxable purchases made during a tax period exceeds the output tax on account of zero rated local supplies or export made during that tax period, the excess amount of input tax shall be refunded to the registered person not later than forty-five days of filing of refund claim in such manner and subject to such conditions as the Board may, by notification in the official Gazette specify:

    Provided that in case of excess input tax against supplies other than zero-rated or exports, such excess input tax may be carried forward to the next tax period, along with the input tax as is not adjustable in terms of sub-section (1) of section 8B, and shall be treated as input tax for that period and the Board may, subject to such conditions and restrictions as it may impose, by notification in the official Gazette, prescribe the procedure for refund of such excess input tax.

    Provided further that the Board may, from such date and subject to such conditions and restrictions as it may impose, by notification in the official Gazette, direct that refund of input tax against exports shall be paid along with duty drawback at the rates notified in the such notification.

    Sub-Section (2): If a registered person is liable to pay any tax, default surcharge or penalty payable under any law administered by the Board, the refund of input tax shall be made after adjustment of unpaid outstanding amount of tax or, as the case may, default surcharge and penalty.

    Sub-Section (3): Where there is reason to believe that a person has claimed input tax credit or refund which was not admissible to him, the proceedings against him shall be completed within sixty days. For the purposes of enquiry or audit or investigation regarding admissibility of the refund claim, the period of sixty days may be extended up to one hundred and twenty days by an officer not below the rank of an Additional Commissioner Inland Revenue and the Board may, for reasons to be recorded in writing, extend the aforesaid period which shall in no case exceed nine months.

  • FBR waives penalty on overstayed consignments

    FBR waives penalty on overstayed consignments

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday waived penal surcharges on overstayed consignments to facilitate trade community.

    The FBR said that the waiver had been granted in pursuance to decision taken at the Economic Coordination Committee (ECC) of the Cabinet held on March 27, 2019 to waive penal surcharges on the overstayed cargoes at ports.

    The FBR said that the time to stay of the cargo has been extended up to April 13 the period for which warehoused goods may remain in the warehouse.

    Further the government also directed to remit penal surcharges in the case of goods which are cleared from the warehouse within the period starting on April 08, 2019 and ending April 13, 2019.

    The FBR said that the decision would not apply to the goods which had since been abandoned or auctioned under the rules.

  • FBR empowered to use third-party information for identifying tax dodgers: MTEF

    FBR empowered to use third-party information for identifying tax dodgers: MTEF

    ISLAMABAD: Federal Board of Revenue (FBR) has been empowered for using third-party information to identify tax dodgers.

    The Medium-Term Economic Framework (MTEF), which was launched on Monday by the Finance Minister Asad Umar, the government had promulgated a law so as to allow FBR to access third-party data bases.

    The MTEF pointed out building data analytics capacity to utilize available information. “This involves identifying and identifying and pursuing individuals falling outside the tax net through the use of third-party information on consumption patterns utilizing data from income, income tax returns and expenditure data from various sources such as travel, bank account, car ownership, property ownership, children studying abroad, children studying in expensive schools etc.”

    Since FBR does not have adequate capacity to utilize these data using latest techniques available, it would be necessary to collaborate with researchers and experts to develop efficient and effective analytical tools.

    The government has evolved measures to strengthening tax enforcement and tax audits

    The framework said that tax enforcement has remained one of the weakest areas of tax administration.

    The government intends to overcome this shortcoming by building enforcement capabilities within FBR through staff training and an intensive use of information technology.

    In this regard, priority is being given to putting in place a track-and-trace system and strengthening the risk-based tax audits.

    The government also planned harmonizing the tax codes. The MTEF said that the government is well aware that some tax issues (e.g. non-harmonized sales tax rates across tiers of government, taxation of real estate, etc.) adds to the cost of doing business by requiring multiple tax returns to be filed in a single tax year.

    While working with the provincial governments in the National Finance Commission (NFC) framework, the federal government intends to harmonize the tax code and integrate tax processes through digitization and process automation.

    In addition, it intends to establish a mechanism to fast-track resolution of tax disputes, thus reducing compliance cost.

    This will reduce the cost of doing business to some extent and make it harder for taxpayers to play the tax administrations off against each other to evade taxes.

    An NFC sub-group has already been tasked with formulating recommendations to simplify payment of taxes to enhance ease of doing business in taxation area.

  • Active taxpayers list shows 1.88 million return filers

    Active taxpayers list shows 1.88 million return filers

    KARACHI: The number of active taxpayers has surged to 1.88 million for the tax year 2018 as of April 07, 2019, according to an official document released on Monday. This marks a significant increase from the previous year, reflecting a growing compliance among taxpayers in Pakistan.

    (more…)
  • Sales Tax Act 1990: buyer, seller jointly responsible for unpaid tax

    Sales Tax Act 1990: buyer, seller jointly responsible for unpaid tax

    KARACHI: Where an amount of tax unpaid in supply chain then registered buyer and seller are both responsible for paying to national exchequer.

    According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), the Section 8A explained joint and several liability regarding unpaid tax.

    Section 8A: Joint and several liability of registered persons in supply chain where tax unpaid.

    Where a registered person receiving a taxable supply from another registered person is in the knowledge or has reasonable grounds to suspect that some or all of the tax payable in respect of that supply or any previous or subsequent supply of the goods supplied would go unpaid, of which the burden to prove shall be on the department such person as well as the person making the taxable supply shall be jointly and severally liable for payment of such unpaid amount of tax:

    Provided that the Board may by notification in the official gazette, exempt any transaction or transactions from the provisions of this section.

    Section 8B: Adjustable input tax.

    Sub-Section (1): Notwithstanding anything contained in this Act, in relation to a tax period, a registered person shall not be allowed to adjust input tax in excess of ninety per cent of the output tax for that tax period:

    Provided that the restriction on the adjustment of input tax in excess of ninety percent of the output tax, shall not apply in case of fixed assets or Capital goods:

    Provided further that the Board may by notification in the official Gazette, exclude any person or class of persons from the purview of sub-section (1).

    Sub-Section (2): A registered person, subject to sub-section (1), may be allowed adjustment or refund] of input tax not allowed under sub-section (1) subject to the following conditions, namely:

    (i) in the case of registered persons, whose accounts are subject to audit under the Companies Ordinance, 1984, upon furnishing a statement along with annual audited accounts, duly certified by the auditors, showing value additions less than the limit prescribed under sub-section (1) above; or

    (ii) in case of other registered persons, subject to the conditions and restrictions as may be specified by the Board by notification in the official Gazette.

    Sub-Section (3): The adjustment or refund of input tax mentioned in sub-sections (2), if any, shall be made on yearly basis in the second month following the end of the financial year of the registered person.

    Sub-Section (4): Notwithstanding anything contained in sub-sections (1) and (2), the Board may, by notification in the official Gazette, prescribe any other limit of input tax adjustment for any person or class of persons.

    Sub-Section (5): Any auditor found guilty of misconduct in furnishing the certificate mentioned in sub-section (2) shall be referred to the Council for disciplinary action under section 20D of Chartered Accountants, Ordinance, 1961 (X of 1961).

  • Accountability framework for FBR officials suggested to make tax audit transparent

    Accountability framework for FBR officials suggested to make tax audit transparent

    KARACHI: Pakistan Tax Bar Association (PTBA) has said that there should be accountability framework for tax officers in order to make audit transparent.

    Abdul Qadir Memon, President, PTBA in a message to PTBA Tax Journal outlined eight-point recommendations to tax authorities for making audit system more transparent in order to boost confidence of taxpayers on the authorities.

    Memon said that the accountability framework and service standards should be introduced for the employees of Federal Board of Revenue (FBR), more particularly for the revenue officers in respect of quality of assessment order and standing of their orders in the test of appeal including but not limited to final revenue generated by the exchequer.

    The PTBA said that laws should be formulated in such a manner that there is a clarity, certainty and finality of an assessment, which has been universally recognized as hallmark of audit and an assessment.

    Following are suggestions for effective audit selection mechanism and amendment of assessment based on cogent, honest, justifiable with reasoning and intelligible nexus with the tax affairs of the taxpayers and capacity to pay tax:

    — To place sophisticated tax intelligence system to gather data from withholding collection of taxes and third party information collected on the basis of transactions conducted through computerized national identity cards (CNICs).

    — Cases are selected by the FBR only on the basis of defined risk areas or red flags trigger tax audit. The field forces are restricted to conduct audit of only such cases.

    — The amendment of assessment is framed by the field forces under the following circumstances guided the rules of justice, equity and judicial conscious:

    i. Any income chargeable to tax or sales has escaped assessment, under assessed, assessed at low rate or has been misclassified on the basis of definite information.

    ii. The deemed assessment is erroneous in so far as it is prejudicial to the interest of revenue.

    — In line with global practice (USA, UK, New Zealand, Australia, Canada) to provide a more supportive legislative and administrative environment for existing self-assessment arrangements and to make the taxation system fairer and more certain, it is imperative that a system of Binding Public and Private Ruling for Resident and Non-Residents be introduced.

    — The commissioner should not be empowered to amend the assessment as many times as may be necessary on the same issue or point, which has already been subject matter of reassessment or further assessment proceedings.

    — The time limit for amendment of assessment should be reduced to two years from the end of the financial years in which the commissioner has issued the original order to the taxpayer and one year in case of amended assessment; whichever is later.

    — Relevant laws under the provisions of Direct and Indirect Taxes should be amended in a manner that:

    i. Once the audit for any tax year is conducted/completed under Section 177 read with Section 214C of Income Tax Ordinance, 2001; there should not be any audit of monitoring of withholding/collection of taxes and amendment of assessment unless ‘definite information’ comes into the possession of the commissioner.

    ii. Once the sales tax audit for any year is conducted in respect of registered taxpayer under the Section 72B there should not be audit under Section 25 of the Sales Tax Act, 1990.

  • Sales Tax Act 1990: tax credit not allowed under various conditions

    Sales Tax Act 1990: tax credit not allowed under various conditions

    KARACHI: A registered sales tax person is not allowed to entitle to reclaim or deduct input tax paid on various activities of manufacturing / supplies.

    The Section 8 of updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR) explained where tax credit is not allowed.

    Section 8: Tax credit not allowed

    Sub-Section (1): Notwithstanding anything contained in this Act, a registered person shall not be entitled to reclaim or deduct input tax paid on –

    (a) the goods or services used or to be used for any purpose other for taxable supplies made or to be made by him;

    (b) any other goods or services which the Federal Government may, by a notification in the official Gazette, specify;

    (c)] the goods under sub-section (5) of section 3:

    (ca) the goods or services in respect of which sales tax has not been deposited in the Government treasury by the respective supplier;

    (caa) purchases, in respect of which a discrepancy is indicated by CREST or input tax of which is not verifiable in the supply chain;

    (d) fake invoices;

    (e) purchases made by such registered person, in case he fails to furnish the information required by the Board through a notification issued under sub-section (5) of section;

    (f) goods and services not related to the taxable supplies made by the registered person.

    (g) goods and services acquired for personal or non-business consumption;

    (h) goods used in, or permanently attached to, immoveable property, such as building and construction materials, paints, electrical and sanitary fittings, pipes, wires and cables, but excluding pre-fabricated buildings and such goods acquired for sale or re-sale or for direct use in the production or manufacture of taxable goods;

    (i) vehicles falling in Chapter 87 of the First Schedule to the Customs Act, 1969 (IV of 1969), parts of such vehicles, electrical and gas appliances, furniture furnishings, office equipment (excluding electronic cash registers), but excluding such goods acquired for sale or re-sale;

    (j) services in respect of which input tax adjustment is barred under the respective provincial sales tax law;

    (k) import or purchase of agricultural machinery or equipment subject to sales tax at the rate of 7 percent under Eighth Schedule to this Act;

    (l) from the date to be notified by the Board, such goods and services which, at the time of filing of return by the buyer, have not been declared by the supplier in his return or he has not paid amount of tax due as indicated in his return; and

    (m) import of scrap of compressors falling under PCT heading 7204.4940.

    Sub-Section (2): If a registered person deals in taxable and non-taxable supplies, he can reclaim only such proportion of the input tax as is attributable to taxable supplies in such manner as may be specified by the Board.

    Sub-Section (3): No person other than a registered person shall make any deduction or reclaim input tax in respect of taxable supplies made or to be made by him.

    Sub-Section (4): omitted

    Sub-Section (5): Notwithstanding anything contained in any other law for the time being in force or any decision of any Court, for the purposes of this section, no input tax credit shall be allowed to the persons who paid fixed tax under any provisions of this Act as it existed at any time prior to the first day of December, 1998.

    Sub-Section (6): Notwithstanding anything contained in any other law for the time being in force or any provision of this Act, the Federal Government may, by notification in the official Gazette, specify any goods or class of goods which a registered person cannot supply to any person who is not registered under this Act.

    Sub-Section (7): Omitted.

  • FBR issues notices to 350 Sindh bureaucrats for non-filing

    FBR issues notices to 350 Sindh bureaucrats for non-filing

    KARACHI: Federal Board of Revenue (FBR) has issued notices to 350 senior bureaucrats of Sindh government for non-filing of income tax returns.

    The notices have been issued by Regional Tax Office (RTO) –II Karachi on identification of expenditures through various sources by those provincial government officers.

    The FBR sources said that these government officers had never filed their annual income tax returns and asset declarations with the income tax departments.

    They said that the expenditures details had been obtained through their air travels, banking transactions, purchase of property purchase etc.

    The information of those provincial government officers were obtained from their salary disbursements.

    They said that the tax department would first enforce income tax returns and then would initiate proceedings of concealment.

    The sources said that besides taking action against bureaucrats of Sindh government the RTO –II Karachi was also taking action against 3,000 more salary persons in the private sector to bring them into tax net.

    The sources said that many of these salary persons had never filed income tax returns despite having taxable income as well as other source of income.

  • Sales Tax Act 1990: deduction of input tax by registered persons

    Sales Tax Act 1990: deduction of input tax by registered persons

    KARACHI: A sales tax registered person is allowed to deduct input tax against output tax for determination of taxable supplies made during a period.

    According to updated Sales Tax Act 1990 issued by Federal Board of Revenue (FBR), Section 7 explained the procedure of deduction of input tax by sales tax registered persons.

    Section 7: Determination of tax liability.

    Sub-Section (1): Subject to the provisions of section 8 and, for the purpose of determining his tax liability in respect of taxable supplies made during a tax period, a registered person shall, subject to the provisions of section 73, be entitled to deduct input tax paid or payable during the tax period for the purpose of taxable supplies made, or to be made, by him from the output tax excluding the amount of further tax under sub-section (1A) of section 3 that is due from him in respect of that tax period and to make such other adjustments as are specified in Section 9:

    Provided that where a registered person did not deduct input tax within the relevant period, he may claim such tax in the return for any of the six succeeding tax periods.

    Sub-Section (2): A registered person shall not be entitled to deduct input tax from output tax unless,-

    (i) in case of a claim for input tax in respect of a taxable supply made, he holds a tax invoice in his name and bearing his registration number in respect of such supply for which a return is furnished:

    Provided that from the date to be notified by the Board in this respect, in addition to above, if the supplier has not declared such supply in his return or he has not paid amount of tax due as indicated in his return;

    (ii) in case of goods imported into Pakistan, he holds bill of entry or goods declaration in his name and showing his sales tax registration number, duly cleared by the customs under section 79, section 81 or section 104 of the Customs Act, 1969 (IV of 1969);

    (iii) in case of goods purchased in auction, he holds a treasury challan, in his name and bearing his registration number, showing payment of sales tax;

    Sub-Section (3): Notwithstanding anything in sub-sections (1) and (2), the Federal Government may, by a special order, subject to such conditions, limitations or restrictions as may be specified therein allow a registered person to deduct input tax paid by him from the output tax determined or to be determined as due from him under this Act.

    Sub-Section (4): Notwithstanding anything contained in this Act or rules made there under, the Federal Government may, by notification in the official Gazette, subject to such conditions, limitations or restrictions as may be specified therein, allow a registered person or class of persons to deduct such amount of input tax from the output tax as may be specified in the said notification.