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Tag: Federal Board of Revenue

The Federal Board of Revenue is Pakistan’s apex tax agency, overseeing tax collection and policies. Pakistan Revenue is committed to providing timely updates on the Federal Board of Revenue to its readers.

  • FBR explains Pakistan source of income

    FBR explains Pakistan source of income

    ISLAMABAD: Federal Board of Revenue (FBR) has defined Pakistan source of income for collection of income tax.

    Pakistan source of income is defined in section 101 of the Income Tax Ordinance, 2001, which caters for Incomes under different heads and situations. Some of the common Pakistan source Incomes are as under: -Salary received or receivable from any employment exercised in Pakistan wherever paid;

    – Salary paid by, or on behalf of, the Federal Government, a Provincial Government, or a local Government in Pakistan, wherever the employment is exercised;

    – Dividend paid by Resident Company;

    – Profit on debt paid by a Resident Person;

    – Property or rental Income from the lease of immovable property in Pakistan;

    – Pension or annuity paid or payable by a Resident or permanent establishment of a Non-Resident.

    The FBR also defined foreign source Income as any Income, which is not a Pakistan source Income.

  • Measures for ease of doing business taken through Finance Act, 2021

    Measures for ease of doing business taken through Finance Act, 2021

    ISLAMABAD: Federal Board of Revenue (FBR) has explained amendments made through Finance Act, 2021 in Sales Tax Act, 1990 and Federal Excise Act, 2005 for ease of doing business.

    The FBR said that there are certain provisions in the Sales Tax Act, 1990 and Federal Excise Act, 2005, which required some corrections or streamlining, while some changes have been made for the purpose of ‘ease of doing business’ for registered persons.

    Further, some drafting errors have also been corrected.

    All such measures are listed below:

    1. Section 2(4AA) of Sales Tax Act, 1990: A new definition has been inserted to define Commissioner (Appeals).

    2. Section 2(5AB) of Sales Tax Act, 1990: Annual threshold for the cottage industry has been increased from Rs 3 million to Rs. 10 million by amending section 2(5AB).

    3. Section 2(18A) of Sales Tax Act, 1990: For the purpose of defining online market place, new clause (18A) has been inserted under section 2.

    4. Section 2(37) of Sales Tax Act, 1990: Drafting error has been corrected in clause (37) of section 2.

    5. Section 2 (4 3A) of Sales Tax Act, 1990: Definition of tier-1 retailer has been streamlined through insertion of a new clause, whereby a retailer who has acquired point of sale is also included therein.

    6. Section 2(44) of Sales Tax Act, 1990: Advance receipt of payment has been excluded from the purview of definition of time of supply.

    7. Section 3 of Sales Tax Act, 1990: Besides correcting drafting error and deleting proviso regarding cash back, new sub-section (9AA) has been inserted in section 3 for fixation of minimum production as per criteria specified in newly added Thirteenth Schedule.

    8. Section 8B of Sales Tax Act, 1990: In order to encourage listed corporate sector, Public limited Companies listed on Pakistan Stock Exchange have been excluded from the purview of section 8B of the Sales Tax Act, 1990. Moreover, in order to enhance cost of retailers not integrated with the FBR’s online system, disallowance of input tax adjustment by such retailers has been further enhanced to 60 per cent.

    9. Section 11 of Sales Tax Act, 1990: Sales tax returns are filed on monthly basis, while audit is carried out on annual basis. Hence, in order to streamline section 11, the words “relevant date” have been substituted with the words “end of the financial year in which the relevant date falls”.

    10. Section 22 of Sales Tax Act, 1990: Section 22 has been amended by inserting cash book and electronic version of record to strengthen and streamline the requirement of record keeping.

    11. Section 25AA of Sales Tax Act, 1990: A new sub-section has been added in section 25AA to provide enabling provision for prescribing rules for determining transfer pricing of taxable supplies between associates to reflect fair market value in arm’s length transactions.

    12. Section 26AB of Sales Tax Act, 1990: For the purpose of facilitation of the registered persons and in order to streamline the procedure for extension of time for furnishing of sales tax returns, new section 26AB has been inserted.

    13. Section 40D of Sales Tax Act, 1990: Border Sustenance Markets have been included in the tax exempt areas and accordingly supplies made from such areas to the taxable areas shall be chargeable to sales tax.

    14. Section 40E of Sales Tax Act, 1990 & Section 45AA of Federal Excise Act, 2005: New section has been added in both STA and FEA making it mandatory for manufacturers of the specified goods to obtain brand license for each separate brand or stock keeping unit (SKU) produced by them.

    15. Section 48 of Sales Tax Act, 1990 & Section 14 of Federal Excise Act, 2005: Enabling provision has been inserted in both STA and FEA regarding assistance in collection and recovery of taxes with other countries on mutual basis.

    16. Section 50 of Sales Tax Act, 1990: Procedure for publishing and placing the rules has been streamlined.

    17. Section 56A of Sales Tax Act, 1990 & Section 47A of Federal Excise Act, 2005: Enabling provisions regarding sharing of data with other ministries or divisions of Federal Government or Provincial Governments besides providing for mechanism for assistance in recovery of taxes with foreign countries on reciprocal basis have been inserted in section 56A of STA and 47A of FEA.

    18. Section 56C of Sales Tax Act, 1990: Enabling provision has been inserted in section 56C to monitor and regulate the invoices issued by tier-1 retailers by way of mystery shopping.

    19. Section 67 of Sales Tax Act, 1990: Benefit of additional payment has also been extended to those persons in whose case any order is passed under section 66 and refund is not issued within forty-five days of date of refund order.

    20. Section 73 of Sales Tax Act, 1990: For the purpose of promoting ease of doing business, the concept of constructive payment (setting off payables against receivables from the same registered person) has been introduced in section 73 by inserting a new proviso in sub-section (1).

    21. Section 76 of Sales Tax Act, 1990 & Section 49 of Federal Excise Act, 2005: Enabling provision has been inserted in in both STA and FEA for authorizing and prescribing the manner for utilizing the fees and service charges collected by the Board from taxpayers.

    22. S. Nos. 18, 19 & 20 of Table-II of the Sixth Schedule to Sales Tax Act, 1990: S. No. 18 of Table-ll of Sixth Schedule to STA, which grants exemption to marble and granite manufacturers having annual turnover less than Rs. 5 million, has been omitted, as the said exemption is already available under section 2(5AB) of STA. Moreover, exemptions on bricks and crush stones have already expired on 30th June, 2018; hence these serial numbers have been omitted, being redundant.

    23. Section 4 of Federal Excise Act, 2005: Provision for revision of return without seeking approval from the Commissioner has been incorporated in section 4 of the FEA.

    24. S. No. 56 of Table-1 of the First Schedule to Federal Excise Act, 2005: To correct drafting error, PCT heading for filter rod has been substituted.

  • Last date for filing annual tax return is September 30; no extension to be granted

    Last date for filing annual tax return is September 30; no extension to be granted

    KARACHI: The last date for filing income tax return for tax year 2021 is September 30, 2021. The FBR has decided not to extend the last date beyond the cutoff date.

    The FBR opened the IRIS portal on July 01, 2021 to start the income tax return filing for tax year 2021. As per law taxpayers should be given at least three months from launch of income tax return forms for the year. The FBR issued the income tax return forms on July 01, 2021, therefore this year the last date will match the date as prescribed in the lat.

    The taxpayers including salaried persons, business individuals, association of persons and corporate entities whose financial year ends between July 01 to December 31 are required to file their annual return for tax year 2021 by September 30, 2012.

    For further details watch our following video and subscribe to the channel for further informative videos:

  • FBR drafts rules for warehousing, export of POL products

    FBR drafts rules for warehousing, export of POL products

    ISLAMABAD: The Federal Board of Revenue (FBR) has drafted rules for bonded warehousing and export POL Products.

    The FBR issued SRO 872(I)/2021 on Friday and proposed amendments to Customs Rules, 2001. The FBR invited recommendations on the draft rules from stakeholders before finalizing the rules to make part of the law.

    Following new rule 363A has been suggested regarding bonded warehousing and export of POL products:

     (1) The owner may store any imported POL products in a warehouse and export the same in accordance with rules 363A to 363F.

    (2) At the time of arrival of goods at a port, the owner shall file goods declaration through WeBOC system for in-bonding of the imported POL products submitting the documents as required under the Act.

    (3) The securities in the shape of postdated cheques and indemnity bond furnished by the owner under section 86 of the Act, at the time of warehousing of POL products, shall continue to be in force notwithstanding the transfer of the goods to any other person or firm unless the warehoused POL products are exported by way of supply to conveyances as provisions and stores as provided in section 106 of the Customs Act, without payment of any duties, taxes or levies, as the case maybe.

    Explanation / Note: Since the POL products, to be imported under this scheme, will be shipped or supplied without foreign exchange remittances from Pakistan, on account of cost of goods at the time of their imports, therefore, no Electronic Import Form (EIF) shall be required at the time of filing of GD for their in-bonding. Similarly, no EIF shall be required at the time of export. The owner of any POL products, warehoused in accordance with the foregoing provisions of this rule, may export such POL products as provisions and stores for conveyances proceeding to any foreign territory including by way of direct sale or sale through a third party.

    Explanation / Note: ‘direct sale’ — means that owner makes a direct sale to the owner or charterer of the conveyance and deliver the POL products to such conveyance. ‘Sale through a third party’ — means that the owner will:

    (i) issue sales invoice to a foreign entity other than the owner or charterer of the conveyance; and

    (ii) deliver POL products to a conveyance on the instructions of such foreign entity.

  • 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.

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  • 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.