KARACHI: Karachi Tax Bar Association (KTBA) has asked Federal Board of Revenue (FBR) to issue clarification regarding filing withholding tax statement following amendment made through Finance Supplementary (Second Amendment) Act, 2019.
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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.
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Sales Tax Act 1990: rate in force to apply at time of supply
KARACHI: Any change in the rate of sales tax shall apply at the time of supply or clearance of imported goods, as clarified by Section 5 of the Sales Tax Act, 1990, updated by the Federal Board of Revenue (FBR). This section outlines the specific rules for applying sales tax when rates are adjusted and provides detailed guidelines for taxable supplies and imports.
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FBR excludes salary persons from audit selection
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday issued Audit Policy 2018 and excluded salary persons from selection of audit.
The following exclusions have been identified and approved by the Board under relevant rules where selection for audit by the Board is not required.
Income Tax
i. All cases already selected for audit by the Commissioners Inland Revenue or Director I&I (IR) under section 177 of the Income Tax Ordinance for any of the preceding three Tax Years i.e 2014, 2015, 2016
ii. All cases already selected for audit under section 214D of the Income Tax Ordinance, 2001, for any of the preceding three Tax Years i.e 2014, 2015, 2016
iii. All cases where income chargeable to tax under the head salary exceeds 50% of taxable income, except cases having business income. Directors of companies do not qualify for this exclusion.
iv. All cases where entire income is covered under Final Tax Regime (FTR)
Sales Tax
All cases already selected under section 25 and 38 of Sales Tax Act, 1990 by the Commissioner Inland Revenue or Director I&I (IR) for tax periods corresponding to the accounting period adopted for the purpose of return of income under the Income Tax Ordinance, 2001 for Tax Year 2016
Provided that where only a part of the said accounting period had been audited already, the relevant authority may select the remaining period for audit.
ii. All cases already selected for audit under section 72B through computer ballot held under Taxpayers’ Audit Policy, 2017
iii. All cases of Steel Melters and Steel Re-rollers who are paying sales tax under the Sales Tax Special Procedure Rules, 2007.
iv. Federal, Provincial and Local Government Departments.
Federal Excise
i. All cases already selected under section 46 of the Federal Excise Act, 2005 by the Commissioner Inland Revenue or Director I&I (IR) for tax periods corresponding to the accounting period adopted for the purpose of return of income under the Income Tax Ordinance, 2001 for tax year 2016.
Provided that where only a part of the said accounting period had been audited already, the relevant authority may select the remaining period for audit.
ii. All cases already selected for audit under section 42B through computer ballot held under Taxpayers’ Audit Policy, 2017
iii. Federal, Provincial and Local Government Department.
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FBR selects 14,164 audit cases through computerized balloting
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday selected total 14,164 audit cases through computerized balloting in income tax, sales tax and federal excise duty cases.
The FBR selected 10,982 audit cases under Section 214C of Income Tax Ordinance, 2001.
The revenue body selected around 3,126 sales tax cases under Section 72B of Sales Tax Act, 1990.
Further, 56 cases have been selected under Section 42B of Federal Excise Act, 2005.
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Sales Tax Act 1990: zero rating on export, supply of goods
KARACHI: The sales tax laws have allowed zero rating of sales tax on exports or supply of goods.
According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR), the Section 4 of the Act explained the zero rating.
Section 4: Zero rating
Notwithstanding the provisions of section 3 except those of sub-section (1A), the following goods shall be charged to tax at the rate of zero per cent:
(a) goods exported, or the goods specified in the Fifth Schedule;
(b) supply of stores and provisions for consumption aboard a conveyance proceeding to a destination outside Pakistan as specified in section 24 of the Customs Act, 1969 (IV of 1969);
(c) such other goods as the Federal Government may, by notification in the Gazette, specify:
Provided that nothing in this section shall apply in respect of a supply of goods which –
(i) are exported, but have been or are intended to be re-imported into Pakistan; or
(ii) have been entered for export under Section 131 of the Customs Act, 1969 (IV of 1969), but are not exported; or
(iii) have been exported to a country specified by the Federal Government, by Notification in the official Gazette:
Provided further that the Federal Government may by a notification in the official Gazette, restrict the amount of credit for input tax actually paid and claimed by a person making a zero-rated supply of goods otherwise chargeable to sales tax.
(d) such other goods as may be specified by the Federal Board of Revenue through a general order as are supplied to a registered person or class of registered persons engaged in the manufacture and supply of goods supplied at reduced rate of sales tax.
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Amnesty scheme will not for public office holder: Asad Umar
ISLAMABAD: Finance Minister Asad Umar on Wednesday said that if the government introduces any tax amnesty scheme then it will not applicable for public office holders.
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FBR to conduct balloting for audit selection
ISLAMABAD: Federal Board of Revenue (FBR) to conduct balloting for selection of audit cases on Thursday, April 04, 2019.
The balloting will be conducting for audit selection of income tax returns filed for tax year 2017.
Around 1.84 million tax returns were filed for the tax year 2017 by salary persons, business individuals, Association of Persons and corporate entities.
The audit selection would be made in income tax, sales tax and federal excise duty.
The FBR conduct balloting to select audit cases under Section 214C of Income Tax Ordinance, 2001.
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FBR extends suspension period of two customs officers
ISLAMABAD: Federal Board of Revenue (FBR) has extended in suspension period of two customs officers posted in Karachi for further three months.
In a notification issued on Wednesday, the FBR extended the suspension period of Sultan Aurangzeb, Principal Officer (BS-17), Model Customs Collectorate of Port Muhammad Qasim, Karachi for a period of three months effective from March 31, 2019.
The FBR suspended Sultan Aurangzeb on December 31, 2019 while taking disciplinary action against the officer.
In another notification, the FBR extended in suspension period of Muhammad Sarfaraz Hayat, Preventive Officer (BS-16), Model Customs Collectorate of Preventive, Karachi for a period of three months effective from March 31, 2019.
The FBR suspended Muhammad Sarfaraz Hayat on December 31, 2019 while taking disciplinary action against the officer.
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Sales Tax Act, 1990: collection of excess sales tax
KARACHI: A person is required to pay sales tax, which was collected under misapprehension of any provision of the act and was not collectable or in excess of tax.
The FBR recently updated Sales Tax Act, 1990 and its Section 3B explained the collection of excess sales tax.
Section 3B: Collection of excess sales tax etc
Sub-Section (1): Any person who has collected or collects any tax or charge, whether under misapprehension of any provision of this Act or otherwise, which was not payable as tax or charge or which is in excess of the tax or charge actually payable and the incidence of which has been passed on to the consumer, shall pay the amount of tax or charge so collected to the Federal Government.
Sub-Section (2): Notwithstanding anything contained in any law or judgement of a court, including the Supreme court and a High court, any amount payable to the Federal Government under sub-section (1) shall be deemed to be an arrear of tax or charge payable under this Act and shall be recoverable accordingly and any claim for refund in respect of such amount shall neither be admissible to the registered person nor payable to any court of law or to any person under direction of the court.
Sub-Section (3): The burden of proof that the incidence of tax or charge referred to in sub-section (1) has been or has not been passed to the consumer shall be on the person collecting the tax or charge.
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FBR notifies Benami zones for initiating cases across country
In a significant move to combat Benami transactions, the Federal Board of Revenue (FBR) has announced the establishment of three dedicated zones in major cities across the country.
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