In a move to facilitate the import of essential commodities, the Federal Board of Revenue (FBR) issued a notification on Tuesday, exempting withholding income tax on the import of 300,000 metric tons of wheat.
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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.
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Law prohibits arrest of women, minors for tax recovery
ISLAMABAD: Income tax law has prohibited tax officials from arresting any woman or a minor for recovery of tax default amount, officials at Federal Board of Revenue (FBR) said on Monday.
They said that Commissioner Inland Revenue, having authority to recover tax amount by using various options defined under the law, has been prohibited to order the arrest of a woman or any person who, in his opinion, is a minor or of unsound mind.
The officials said that Income Tax Rules, 2002 has explained in detailed about the powers of Commissioner of Inland Revenue related to recovery of outstanding tax money.
The commissioner has an authority to ask officer incharge of the civil person for detention of the defaulter in civil prison under Rule 186(1) of the Income Tax Rules, 2002.
Rule 187 explains detention in and release from prison.-
(1) Every person detained in the civil prison in execution of a notice may be so detained-
(a) where the notice is for a demand of an amount exceeding twenty five thousands, for a period of six months, and
(b) in any other case for a period of six weeks:
Provided that he shall be released from such detention-
(i) on the amount mentioned in the warrant for his detention being paid to the Officer-in-charge of the civil prison, or
(ii) on the request of the Commissioner who has issued the notice or of the Commissioner on any ground other than the grounds mentioned in rules 193(1) and 196:
Provided further that where he is to be released on the request of the Commissioner, he shall not be released without the order of the Commissioner.
(2) A defaulter released from detention under this rule shall not, merely by reason of his release, be discharged from his liability for the arrears; but he shall liable to be re-arrested under the notice in execution of which he was detained in the civil prison.
Rule 188. Release.-
(1) The Commissioner may order the release of a defaulter who has been arrested in execution of a notice upon being satisfied that he has disclosed the whole of his property and has placed it at the disposal of Commissioner and that he has not committed any act in bad faith.
(2) If the Commissioner has ground for believing the disclosure made by the defaulter under sub-rule (1) to have been untrue, he may order the re-arrest of the defaulter in execution of the notice but the period of his detention in the prison shall not in the aggregate exceed that authorized by rule 187.
Rule 189. Release on ground of illness.-
(1) At any time after a warrant for the arrest of a defaulter has been issued, the Commissioner may cancel it on ground of the serious illness of the defaulter.
(2) Where a defaulter has been arrested, the Commissioner may release him if, in the opinion of the Commissioner of Tax, he is not in a fit state of mind to be detained in the civil prison.
(3) Where a defaulter has been committed to the civil prison, he may be, released therefrom by the Commissioner on the ground of the existence of any infectious or contagious disease or on the ground of his suffering from any illness.
(4) A defaulter released under this rule may be re-arrested, but the period of his detention in the civil prison shall not in the aggregate exceed that authorized by rule 164.
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FBR receives 3.06 million record high income tax returns for Tax Year 2019
ISLAMABAD: The Federal Board of Revenue (FBR) has achieved a record-breaking milestone by receiving 3.06 million income tax returns for the tax year 2019, as per the latest Active Taxpayers List (ATL) issued on Monday. This remarkable achievement reflects the FBR’s sustained efforts to enhance compliance and encourage taxpayers to fulfill their obligations.
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Sales tax value addition at 3 percent applicable on all imported goods
ISLAMABAD: Sales tax on account of minimum value addition at three percent is applicable on all imported goods subject to exclusions on import of various imported goods.
According to Sales Tax Act, 1990, all imported goods are subject to 3 percent ad valorem subject to exclusion as in conditions and procedure.
The government recently abolished three percent sales tax value addition on import of sugar to help in reducing domestic prices of the commodity.
The officials at the Federal Board of Revenue (FBR) said that under the Sales Tax Act, 1990 the procedure and conditions have been laid down for the levy of three percent value addition tax on imported goods.
(1) The sales tax on account of minimum value addition as payable under this Schedule (hereinafter referred to as value addition tax), shall be levied and collected at import stage from the importers on all taxable goods as are chargeable to tax under section 3 of the Act or any notification issued thereunder at the rate specified in the Table in addition to the tax chargeable under section 3 of the Act or a notification issued thereunder:
(2) The value addition tax under this Schedule shall not be charged on,—
(i) Raw materials and intermediary goods imported by a manufacturer for in-house consumption;
(ii) The petroleum products falling in Chapter 27 of Pakistan Customs Tariff as imported by a licensed Oil Marketing Company for sale in the country;
(iii) Registered service providers importing goods for their in-house business use for furtherance of their taxable activity and not intended for further supply;
(iv) Cellular mobile phones or satellite phones;
(v) LNG / RLNG;
(vi) Second hand and worn clothing or footwear (PCT Heading 6309.000);
(vii) Gold, in un-worked condition;
(viii) Silver, in un-worked condition;
(ix) The goods as specified in the Third Schedule on which tax is paid on retail price basis; and
(x) plant, machinery and equipment falling in Chapters 84 and 85 of the First Schedule to the Customs Act, 1969 (IV of 1969), as are imported by a manufacturer for in-house installation or use.
(3) The value addition tax paid at import stage shall form part of input tax, and the importer shall deduct the same from the output tax due for the tax period, subject to limitations and restrictions under the Act, for determining his net liability.
The excess of input tax over output tax shall be carried forwarded to the next tax period as provided in section 10 of the Act.
(4) The refund of excess input tax over output tax, which is attributable to tax paid under this Schedule, shall not be refunded to a registered person in any case, except that as used for making of zero-rated supplies.
(5) The registered person, if also dealing in goods other than imported goods, shall be entitled to file refund claim of excess carried forward input tax for a period as provided in section 10 or in a notification issued there under by the Board after deducting the amount attributable to the tax paid at import stage i.e. sum of amounts paid during the claim period and brought forward to claim period. Such deducted amount may be carried forward to subsequent tax period.
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Procedure for registration of FBR informer
ISLAMABAD: A person can share information of tax evasion and get monetary reward for the disclosure from Federal Board of Revenue (FBR) provided that the informer should be registered with a tax authority for the purpose.
According to Income Tax Rules, 2002 a procedure has be laid down for registration of an informer.
According to the rules, any person desirous of getting himself registered as an informer may make an application to the Chief Commissioner for registration.
The application shall be in the prescribed form and shall be verified in the prescribed manner.
The application shall be accompanied by the following documents, namely:
(a) copy of the Computerized National Identity Card of the applicant;
(b) copy of national tax number (NTN) certificate; and
(c) a duly sworn in affidavit stating therein that the information being provided is correct and nothing has been concealed there from and that in case any incorrect information is provided or any information is concealed he shall be liable to penal action under the laws for the time being in force.
The rules also explain the procedure for submission of information and further action thereupon.
An informer shall submit any information regarding concealment or evasion of tax leading to detection or collection of taxes, fraud, corruption or misconduct that is in his possession to the Chief Commissioner giving precise details of the alleged act along with all supporting evidences that are in his possession:
Provided that no information shall be entertained unless it gives precise details of the alleged act and is accompanied with the supporting evidences.
On receipt of the information, the Chief Commissioner shall scrutinize the information and forward it to the concerned Commissioner.
On receipt of the information from the Chief Commissioner, the concerned Commissioner shall conduct such further enquiry as he may deem fit and submit his report to the Chief Commissioner.
On completion of the enquiry, the concerned Commissioner shall take such further action as may be required under the tax laws or any other law for the time being in force, as may be necessary on the basis of the facts of the case, and furnish his report to the Chief Commissioner.
Notwithstanding anything contained in these rules, an informer, who −
(a) has knowingly provided false information under these rules; or
(b) has provided the information under these rules with the intention to intimidate or blackmail a person, or to bring him into disrepute, or to otherwise cause him financial loss, shall be liable to punishment and fine under the tax laws and other laws for the time being in force.
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FBR issues rules for rewarding informers, officials on recovery of tax evaded money
ISLAMABAD: Federal Board of Revenue (FBR) on Friday issued rules to reward tax officials and informers on detection and recovery of evaded amount.
The FBR issued SRO 78(I)/2021 and said that officers and staff deputed to exercise powers, enforce and/or perform functions and duties in designated entities under the specified statutes and informers or whistleblowers.
According to the rules, the officers / members of staff in Inland Revenue detecting the tax evasion shall be eligible for lesser of 20 percent of the tax sought to be evaded or two years’ salary at the time of detection/filing of the detection report.
Further, officer/member of staff completing the adjudication/assessment the reward shall be lesser of 20 percent of the tax sought to be evaded or two years’ salary as at the time of completion of adjudication / assessment.
The FBR said that if no appeal/revision has been filed against the assessment, the whole of the admissible reward shall be paid immediately after expiry of limitation for filing of appeal/revision.
In case an appeal has been filed against the assessment order the admissible reward claim would be processed as: 50 percent upon confirmation at first appeal forum; and 50 percent upon completion of appellate process on point of fact i.e. Appellate Tribunal Inland Revenue (ATIR).
The reward shall be paid only if the tax sought to be evaded has been recovered at least to the extent of 50 percent of the tax sought to be evaded.
In case detection and assessment have been made by the same officer, he shall be entitled to the reward of the lesser of 20 percent of the tax sought to be evaded or three years’ salary as at the time of detection / filing of the detection report.
In case there are more than one claimants of reward on account of detection or assessment, the reward would be apportioned as per the recommendation of the chief commissioner or director general concerned.
An informer / whistleblower in terms of clause (v) of rule 2 shall be entitled to a reward at the rate of 20 percent up to a maximum of Rs5 million of the tax sought to be evaded in a single case.
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Ordinance notified to extend tax amnesty for construction sector
ISLAMABAD: Federal Board of Revenue (FBR) on Friday notified changes made through presidential ordinance to tax amnesty scheme available to developers and builders.
The Presidential Ordinance has been promulgated on January 19, 2021, which is called as the Income Tax (Amendment) Ordinance, 2021 and it has been enforced from January 01, 2021.
Through the ordinance amendments have been made to Income Tax Ordinance, 2001.
According to this, amendment has been made to Section 100D of Income Tax Ordinance, 2001, the completion of project for availing amnesty on invested amount has been extended to September 30, 2023 from September 30, 2022.
The date has also been extended for the amnesty on investment made in a housing project up to June 30, 2021 from the date of December 31, 2020.
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SBP directs banks to facilitate taxpayers in e-payment of duty, taxes
KARACHI: The State Bank of Pakistan (SBP) on Thursday directed banks to facilitate taxpayers in their payments of duty and taxes through digital/electronic (e-payment) system.
The SBP said that the collection of Federal Board of Revenue (FBR) taxes and duties through Alternate Delivery Channels (ADC) was initiated in March 2018 in parallel to the traditional paper based manual system.
The ADC mechanism allowed the taxpayers to pay their taxes through internet/mobile banking, Automated Teller Machines (ATMs) or Over-the-Counter (OTC) of 16000 branches of commercial banks across the country.
It also enabled FBR and Government Accounting Bodies to realize the tax proceeds on almost real time basis and record the transactions in their accounting system electronically.
Considering the successful and smooth operations of ADC platform for over two years, FBR made it mandatory for Corporate Taxpayers to pay their taxes only through ADC mechanism from August 17, 2020.
The other two categories i.e. Association of Persons (AOPs) and individual taxpayers will also be gradually shifted to the ADC mechanism thus completely eliminating the traditional tax collection system.
As another step towards digitization of taxes and duties collections, the FBR and Pakistan Customs have decided that effective 20 January 2021, Custom Duties exceeding Rs.1 million will be collected through ADC mechanism only. FBR and SBP have conducted a number of webinars and awareness sessions for the business community to ensure a smooth transition to ADC mechanism.
The SBP appreciated the effective role and contribution of banks in making this initiative a huge success, there are still complaints and concerns by the taxpayers about low awareness of banks’ field staff about the ADC particularly the OTC mechanism.
It is therefore, advised and reiterated that following measures are taken on immediate priority:
i. The banks’ branches have a fully functional OTC system integrated with 1Link to collect the Government taxes and duties. The branch staff should have full understanding of the system and should facilitate the tax payers in payment of taxes.
ii. As the custom duty is dependent on exchange rate, it changes with the change in exchange rate. Thus, there may be cases where the taxpayer generates Payment Slip ID (PSID) on day 1 and approaches the bank for payment, the next day and thus the amount of duty reflected on the Taxpayer’s PSID is different from the one appearing on the bank’s terminal. In such cases if the Cheque presented is of lesser amount, the banks shall accept the additional amount in cash or Cheque as per the convenience of the taxpayer. Further, in case the Cheque amount is greater than the custom duty appearing on the bank’s terminal, the excess amount shall be credited in the tax payer’s account with the bank.
iii. There have been complaints that the banks’ branches do not accept the Cheque drawn on another branch of their bank for payment of taxes and ask the taxpayer to visit the branch on which the Cheque is drawn. As all bank branches are online, the taxpayer can pay the taxes in any branch of his/her bank. The banks shall ensure that all their branches are accepting the taxes and duties through ADC mechanism and that their customer can pay the tax in any branch of his/her bank.
iv. The banks shall send SMS or email messages to their clients informing them that “They can pay their taxes and custom duty through internet/mobile banking, ATMs or in any branch of their bank by submitting a Cheque of the tax/duty amount and PSID.”
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FBR proposes CPEC chapter in Customs Rules
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued draft customs rules for the introduction of a separate chapter on procedures for China Pakistan Economic Corridor (CPEC) related activities.
In this regard the FBR issued SRO 47(I)/2021 to make amendment in the Customs Rules, 2001.
Gwadar Tax Free Zone Rules have been introduced as a sub-chapter . According to these rules, an investor is required registration to operate under customs computerized system.
The FBR said that goods imported into a free zone shall be examined and assessed in accordance with the provisions of the Customs Act, 1969 and rules made thereunder. The exemption granted under the act and ordinance shall be applicable to plant, machinery, equipment, appratues and materials to be used solely within the limits of a free zone and to goods imported into the zone by the investors.
The FBR further said that entry of goods imported for free zone shall not be refused except when the goods are liable to restrictions or prohibitions imposed on grounds of public morality or order, public security, hygine or health or for sanitary or phyto-sanitary considerations, or relating to the protection of parents, trademarks, or intellectual property rights as envisaged in import policy order.
Hazardous goods may be allowed to be admitted to a free zone only when a safe area specially designed for its storage has been made available within the free zone to the satisfaction of the licensing authority and customs as well as such conditions under relevant national laws have been complied with.
The FBR said that duty and tax free vehicles shall be allowed to be imported by the concession holder and its operating company for construction, development and operating of Gwadar Port and free zone area under the regulatory mechanism. The regulatory mechanism for such vehicles, including the number and types importable, shall be devised by the ministry of Port and Shipping and FBR, in consultation with the provincial government if so required, and shall be notified by the FBR.
The FBR further said that goods, excluding petty items, from the tariff area shall be admitted into the zone upon completion of export formalities which are observed for export to foreign countries.
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FBR explains electronic payment for duty, taxes
ISLAMABAD: The Federal Board of Revenue (FBR) on Wednesday explained payment of duty and taxes through electronic mode to facilitate trade and industry.
The FBR today (Wednesday) initiated e-payment for duty and taxes of Rs 1 million and above.
The FBR answered following basic questions related to e-payment:
What is PSID?
Payment Slip ID (PSID) is a 17-digit unique number generated by WeBOC system for making payment of dues by the trader through internet banking, automated teller machines (ATM), bank’s mobile applications, Over the Counter (OTC), Easy Paisa, Jazz Cash etc.
When is a PSID generated?
Every time a payment is created against a particular GD after selecting E-Payment option, a PSID number will be generated. For every payment event (initial payment at the time of filing of GD and subsequent payment as a result of any reassessment) WeBOC system will generate a separate unique PSID.
What are the modes of E-Payment available to a WeBOC user?
— Bank’s internet portal
— ATMs
— Bank Mobile bill payment application
— Over the Counter E-Payment against PSID
— Easy Paisa, Jazz Cash etc.
Would there be an option to view a PSID generated against a particular B/L or GD?
Yes. A user will be able to see the PSID generated against a particular B/L or GD in the sub-menu of ‘View Generated PSIDs for E-Payment’ in the ‘Payment Management’ tab.
Would there be an option to view the PSIDs against which payments have already been made?
Yes. In sub-menu ‘Print Computer Generated Payment Receipt’ of the ‘Payment Management’ tab.
Can I make E-Payment if I do not have internet banking facility?
Yes. You can use the following options for making E-Payment against unique PSID generated by WeBOC system even if you do not use internet banking. 2
— ATMs
— Over the Counter E-Payment against PSID
— Easy Paisa, Jazz Cash etc.
Is there any facility to pay duty and taxes against a GD from multiple bank accounts available in E-Payment?
For a single PSID, it is mandatory to pay duty / taxes from a single bank account. However, for subsequent payment of duty / taxes for the same GD via a new PSID, payment can be made from a different bank account.
Is it possible to make payment of duty / taxes for a single GD through E-Payment as well as other payment modes such as pay order / cash?
For a single payment event, it is mandatory to pay duty / taxes from one payment mode. However, for subsequent payment of duty / taxes for the same GD, payment can be made from a different mode of payment.
What is the limit for payment through E-Payment mode?
There is no limit and any amount of leviable duty and taxes can be paid through E-Payment via ATM or internet banking or mobile application or OTC.
What if the trader account is debited but payment acknowledgement is not received by WeBOC system?
There is a Dispute Resolution mechanism available in E-Payment System. In such cases, the customer will first contact his bank and then the Collectorate concerned who will forward the matter to M/s. 1LINK. The trader can report such issues to WeBOC team on the following email / phone numbers:
— 021-99214237 or 021-99210395
— 051-111-772-772 Ext 2
What type of GD processes are covered under E-Payment?
All types of GD-related processes are covered under E-Payment.
In case of IGM de-blocking, the facility for payment through E-Payment is available?
Yes, IGM de-blocking payment can be made through E-Payment.
At what time exchange rate will be updated for E-Payment?
At 00:00 hours (midnight). It is therefore advisable to make E-Payment on the same day of generation of PSID to avoid the impact of exchange rate fluctuation.
Is it advisable to pay duty and taxes through E-Payment mode between 11:30 p.m. to 12:00 midnight?
No (due to change of exchange rate there could be an issue with reconciliation of transaction).
What if the GD is re-opened by the user after the PSID number has been generated?
In such cases, the PSID will be cancelled. The user will again select the payment mode
At the time of opting for E-Payment, what other modes-of-payment are available to the user?
— Bank (manual payment option through NBP)
— PD Account
— For E-Payment of Rs 1.0 million and above the option of bank counter of NBP shall not be available w.e.f 20.01.2021,
After the launch of E-Payment, would the option for payment through PD Account remain available?
E-Payment system is different from payment through PD account. The option to pay duty / taxes through PD account shall remain available.
Would there be an e-CPR (Electronic Payment Receipt) generated like through PD Account?
Yes, the WeBOC system shall generate e-CPR to the trader.
WeBOC Help Desk
— For payment related issues, contact your bank’s help desk.
— For WeBOC related issues, contact us at
email: [email protected]
Tel: 021-99214237 or 021-99210395
051-111-772-772 Ext 2