In a move to enhance flexibility and adaptability within the tax framework, Section 71 of the Sales Tax Act, 1990, grants authority to the Federal Board of Revenue (FBR) to prescribe special procedures for the payment and submission of documents.
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Computation of limitation period
ISLAMABAD – A recent amendment to the Sales Tax Act, 1990, introduced through the Finance Act, 2021, sheds light on the computation of the limitation period for appeals or applications.
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Taxpayers can obtain duplicate sales tax documents
In a move aimed at providing convenience to taxpayers, the Federal Board of Revenue (FBR) has announced that individuals can now obtain duplicate documents of their sales tax affairs.
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Liability of the registered person for the acts of his agent
Section 68 of the Sales Tax Act, 1990, delves into the legal framework surrounding the liability of a registered person for the actions undertaken by their appointed agent.
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Provision to pay sales tax refunds through bonds
A provision has been added to Section 67A of the Sales Tax Act, 1990, which empowered the Federal Board of Revenue (FBR) to pay sales tax refund through bonds.
The Federal Board of Revenue (FBR) issued the Sales Tax Act, 1990 updated up to June 30, 2021. The Act incorporated amendments brought through Finance Act, 2021.
Following is the text of section 67A of the Sales Tax Act, 1990:
67A. Payment of refund through sales tax refund bonds.— (1) Notwithstanding anything contained in section 67, the sales tax refunds payable under this Act may also be paid through sales tax refund bonds to be issued by FBR Refund Settlement Company Limited, in book-entry form through an establishment licensed by the Securities and Exchange Commission of Pakistan as a central depository under the Securities Act, 2015, (111 of 2015), in lieu of payment to be made through issuance of cheques or bank debit advice.
READ MORE: SBP urged to direct banks for accepting sales tax refund bonds
(2) The Board shall issue a promissory note to FBR Refund Settlement Company Limited, hereinafter referred to as the company, incorporating the details of refund claimants and the amount of refund determined as payable to each for issuance of sales tax refund bonds, hereinafter referred to as the bonds, of the same amount.
(3) The bonds shall be issued in values in multiples of one hundred thousand rupees.
(4) The bonds so issued shall have a maturity period of three years and shall bear annual simple profit at ten per cent.
(5) The bonds shall be traded freely in the country’s secondary markets.
(6) The bonds shall be approved security for calculating the statutory liquidity reserve.
(7) The bonds shall be accepted by the banks as collateral.
(8) There shall be no compulsory deduction of Zakat against the bonds and Sahib-e-Nisab may pay Zakat voluntarily according to Shariah.
(9) After period of maturity, the company shall return the promissory note to the Board and the Board shall make the payment of amount due under the bonds, along with profit due, to the bond holders.
(10) The bonds shall be redeemable in the manner as in the preceding sub-section before maturity only at the option of the Board along with simple profit payable at the time of redemption in the light of general or specific policy to be formulated by the Board.
(11) The refund under sub-section (1) shall be paid in the aforesaid manner to the claimants who opt for payment in such manner.
(12) The Board, with the approval of the Federal Minister-in-charge, may notify procedure to regulate the issuance, redemption and other matters relating to the bonds, as may be required.
(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
READ MORE: FBR to pay additional amount on delayed sales tax refund
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FBR to pay additional amount on delayed sales tax refund
Federal Board of Revenue (FBR) is liable to pay an additional amount on a sales tax refund that is paid after a specified time under Sales Tax Act, 1990.
A procedure for the payment of an additional amount against delayed sales tax refund has been laid down under Section 67 of the Sales Tax Act, 1990.
The Federal Board of Revenue (FBR) issued the Sales Tax Act, 1990 updated up to June 30, 2021. The Act incorporated amendments brought through Finance Act, 2021.
Following is the text of section 67 of the Sales Tax Act, 1990:
67. Delayed Refund.– Where a refund due under section 10 is not made within the time specified in section 10 from the date of filling of refund claim, there shall be paid to the claimant in addition to the amount of refund due to him, a further sum equal to KIBOR per annum of the amount of refund due, from the date following the expiry of the time specified as aforesaid, to the day preceding the day of payment of refund:
Provided that where there is reason to believe that a person has claimed the refund which is not admissible to him, the provision regarding the payment of such additional amount shall not apply till the investigation of the claim is completed and the claim is either accepted or rejected:
Provided further that where a refund due in the consequence of any order passed under section 66 is not made within forty five days of date of such order, there shall be paid to the claimant in addition to the amount of the refund due to him, a further sum equal to KIBOR per annum of the amount of refund, due from the date of the refund order.
(Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)
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FBR raises sales tax on all petroleum products
ISLAMABAD: The Federal Board of Revenue (FBR) on Monday notified an increase in sales tax on all the petroleum products.
The FBR issued SRO 01(I)/2022 to notify increase in sales tax rates on petroleum products. The FBR amended the rates of sales tax, which were issued previously through SRO 1604(I)/2021 on December 16, 2021.
READ MORE: Prices of all POL products increased to wish New Year
According to the latest notification enhanced the sales tax on petrol from 1.63 per cent to 4.77 per cent.
The sales tax rate on high-speed diesel has been increased to 9.08 per cent from 7.37 per cent.
The FBR enhanced the sales tax on kerosene oil to 8.30 per cent from 8.19 per cent. Likewise, the sales tax on light diesel has been increased to 2.70 per cent from 0.46 per cent.
The government on December 31, 2021 increased prices of all petroleum products effective from January 01, 2022.
READ MORE: Petrol price reduces to Rs140.82 per liter
The prices have been increased across the board around Rs4 per liter on all the products.
According to a notification issued by the finance division, the new price of petrol has been increased by Rs4 to Rs144.82 per liter from Rs140.82. The rate of high-speed diesel (HSD) has been increased by Rs4 to Rs141.62 per liter from Rs137.62. Similarly, the price of kerosene has been increased by Rs3.95 to Rs113.53 per liter from Rs109.53. Likewise, the price of light diesel oil has been increased by Rs4.15 to Rs111.06 per liter from Rs107.06.
READ MORE: SBP revises manual on remittances for petroleum sector
The notification stated that in the fortnightly review of petroleum products prices, the prime minister had rejected the proposal of Oil and Gas Regulatory Authority (OGRA) for an increase in prices of petroleum products and advised to increase only Rs4 per liter to meet the petroleum levy target agreed with the International Monetary Fund (IMF).
“Sales tax on petrol and diesel has been adjusted downwards as compared to December 16, 2021, to keep the prices lower,” the notification stated.
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FBR extends digital payment system till January 31
ISLAMABAD: The Federal Board of Revenue (FBR) has deferred the implementation of a digital mode of payment for another month i.e. January 31, 2022.
The digital mode of payment has been made mandatory for the corporate sector, which was to be implemented from January 01, 2021.
The FBR issued circular No. 11 of 2021-22 on Monday to allow further extension till January 31, 2021.
“In exercise of the powers conferred under Section 214A of the Income Tax Ordinance, 2001 (hereinafter “the Ordinance”) and taking cognizance of various representations filed by the taxpayers, the Federal Board of Revenue is pleased to extend the deadline for digital payments by Corporate Sector stipulated in Section 21(1a) of the Ordinance up to January 31, 2022.”
Previously, the FBR issued Circular No. 09 of 2021-22 to allow an extension in the deadline for implementation of digital mode of payment up to November 30, 2021.
The new provision was introduced through Tax Laws (Third Amendment) Ordinance, 2021.
The FBR in its explanation through Circular No. 07 dated September 23, 2021 said: to improve documentation, a new clause (la) has been inserted in section 21 of the Ordinance.
The Pakistan Tax Bar Association (PTBA) in a letter to the FBR chairman stated that the implementation of digital payment was not practical at the moment.
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Tax collection from property transactions surges to Rs61 billion
ISLAMABAD: The annual collection of withholding tax from transactions of immovable properties has surged by 98 per cent to Rs61.06 billion during fiscal year 2020/2021.
According to official statistics made available to PkRevenue.com, the collection from sales and purchase of immovable properties was Rs30.77 billion during fiscal year 2019/2020.
Sources in the Federal Board of Revenue (FBR) attributed the increase in revenue collection to enhanced activities during the fiscal year due ease in restrictions related to coronavirus.
READ MORE: Advance tax on purchase of immovable property
They said that the first case of coronavirus was identified in February 2019, and then the government resorted to strict lockdown, which stalled the economic activities.
However, in the subsequent year the government decided to relax the corona restrictions and brought the economic activities to normal.
The FBR collects withholding tax under section 236C of the Income tax Ordinance, 2001 on sale and transfer of immovable properties.
READ MORE: Advance tax on sale or transfer of immovable property
Furthermore, the FBR collect withholding tax under Section 236K of the Income Tax Ordinance, 2001 on purchase of immovable properties.
The collection of withholding tax on sale or transfer of immovable properties registered a growth of 76 per cent to Rs7 billion during fiscal year 2020/2021 as compared with Rs12.2 billion in the preceding fiscal year.
The collection of withholding tax on purchase of immovable properties registered an unprecedented growth of 105 per cent to Rs49 billion during fiscal year 2020/2021 as compared with Rs24 billion in the preceding fiscal year.
READ MORE: FBR issues new, revised tables of property valuation
The FBR sources said that the collection during the fiscal year 2021/2022 would increase significantly due to change in valuation tables for the purpose of withholding tax collection from transactions of immovable properties.
The FBR on December 01, 2021 issued fresh and revised valuation of immovable properties for various cities of the country.
However, the implementation of the fresh valuation table will be applicable from January 16, 2021.
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FBR decides to manage, display gifts received by officials
ISLAMABAD: The Federal Board of Revenue (FBR) has decided to manage and display gifts received during official meetings, a statement said on Monday.
The Board in Council of the FBR in its meeting on January 01, 2022, discussed various agenda items and made some very important decisions.
READ MORE: Tax payment with return drops to Rs54 billion in FY21
For the first time ever in the organization’s history, the council unanimously agreed to establish Toshakhana under the relevant rules and guidelines of the Cabinet Division.
The council also discussed the existing rules regarding the acceptance and disposal of gifts.
After thorough deliberations, it was decided to notify procedures with regards to inventory management and display of the gifts received from dignitaries/guests during official meetings and visits.
READ MORE: Pak-Afghan 2nd round talks on DTA concludes
It was further decided that all officers of FBR would voluntarily declare and deposit gifts received by them. The minimum threshold for gifts has been determined to be Rs. 10,000 for FBR instead of Rs. 30,000, currently fixed for the other divisions of the Federal Government.
The only exception to these rules is applicable on shields and gifts that have an individual’s name engraved. It was also agreed that gifts so far declared will be disposed of as per applicable rules and regulations.
READ MORE: New rates of FED on local, imported motor vehicles
Furthermore, the BIC also approved the new nomenclature for FATE Wing which will now be known as Public Relations Wing.
Likewise, the two training directorates of Inland Revenue Service and Pakistan Customs, FBR have got their new names, IRS Academy and Pakistan Customs Academy, respectively.
READ MORE: Mini-budget: FBR to generate Rs4.5bn through tax rate increase on cellular services