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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 withdraws sugar valuation for sales tax collection

    FBR withdraws sugar valuation for sales tax collection

    KARACHI: Federal Board of Revenue (FBR) has withdrawn valuation of sugar for the purpose of sales tax collection in order to ensure clearance at prevalent international rates.

    The FBR issued SRO 233(I)/2020 dated March 18, 2020 to amend SRO 812(I)/2016 dated September 02, 2016.

    The FBR had fixed valuation at $725 per metric ton through previous notification. However, the prices of the commodity witnessed sharp decline in international market over the time.

    Presently, the international sugar prices is being traded at $334.30 per metric tons. The prices fell by 21 percent during March 20, 2020 in international trade.

  • FBR extends date for filing sales tax returns

    FBR extends date for filing sales tax returns

    ISLAMABAD – The Federal Board of Revenue (FBR) has announced an extension in the deadline for filing sales tax and federal excise return for the month of February 2020.

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  • FBR decides online monitoring sale of petroleum products

    FBR decides online monitoring sale of petroleum products

    ISLAMABAD: Federal Board of Revenue (FBR) has decided online monitoring the sale of petroleum products in order to prevent tax evasion.

    In this regard the FBR issued SRO 23(I)/2020 dated March 16, 2020 to amend Sales Tax Rules, 2006. The amendment has been introduced in Rule 150ZF to include petroleum products in the list of specified items.

    As per the rule 150ZF, it shall apply to electronic monitoring, tracking and tracing of production, import and supply chain on real time basis.

    The FBR has already included items in the list for real-time monitoring of goods, which included: tobacco products; beverages; sugar; fertilizers; and cement.

    The FBR also clarified that specified goods including petroleum products, if brought from non-tariff area as define in the Federal Excise Act, 2005 shall be treated as imported goods.

    Through another amendment to rule 150ZG the FBR also redefined licensing committee as a committee comprising at least three members of Inland Revenue Officers not below the rank of BPS-20 of FBR Headquarters, assisted by technical or IT expert and any other officer or authority designated by the Board.

    Prior to the amendment, the licensing committee was defined as: a committee comprising Commissioner (Zone-1), LTU, Islamabad, Commissioner (Zone-1) LTU Karachi, Commissioner Mardan Zone, RTO Peshawar, Director, Intelligence and Investigation-IR, Islamabad, Chief-IR (Operations-1), FBR Headquarters, Islamabad and any other officer or authority designated by the Board.

  • FBR starts obtaining CNIC information on purchases above Rs50,000

    FBR starts obtaining CNIC information on purchases above Rs50,000

    KARACHI: Federal Board of Revenue (FBR) has started obtaining CNIC information of buyers making purchases above Rs50,000 in order to realize sales tax and for broadening of tax base.

    Sources in FBR said that sales tax registered persons would provide details of Computerized National Identity Card (CNIC) of buyers making purchases above Rs50,000.
    The registered persons will provide the details of CNIC through their monthly sales tax return that is due on March 18, 2020 for the month of February 2020.

    The FBR made it mandatory for sales tax registered persons to obtain CNIC details of unregistered buyers. In this regard an amendment was made to Section 23 of Sales Tax Act, 1990 through Finance Act, 2019.

    The condition was made mandatory on supplies from August 01, 2019. However, on the objections from stakeholders including small traders and shopkeepers the condition was deferred till January 31, 2020.

    The sources said that the sales tax registered persons are required to obtain CNIC details of buyers from February 01, 2020 and provide the same information to the FBR through monthly returns of February 2020, which is due on March 18, 2020.

    They said that the condition is not applicable on ordinary customers.

    For the purpose of this clause, ordinary consumer means a person who is buying the goods for his own consumption and not for the purpose of re-sale or processing.

    The sources said that in case seller was unable to obtain the CNIC information of buyer then in such case the registered person would be responsible.

    However, the FBR through Sales Tax General Order No. 106 dated October 04, 2019 issued clarification regarding CNIC condition.

    The FBR clarified that the CNIC/NTN of the buyer with respect to taxable supplies to an unregistered person shall be deemed to have been reported in good faith by the suppliers with conditions that the invoice should complies with statutory requirements.

    It is also mandatory that payment made by or on behalf of the unregistered purchaser of the amount of the tax invoice, inclusive of sales tax and applicable further tax, is deposited into the supplier’s declared business bank account.

    The CNIC provided by the purchaser is found authenticated by the National Data and Registration Authority (NADRA).

    The FBR also barred that CNIC/NTN provided was not of the employee of the seller or of his associates.

    The sources said that the tax authorities would impose penalty on registered persons on failure to comply with the requirement of obtaining CNIC.

  • FBR allows filing Annexure-H for July – October up to April 15

    FBR allows filing Annexure-H for July – October up to April 15

    ISLAMABAD: Federal Board of Revenue (FBR) has allowed taxpayers to submit their stock position for the period July – October 2019 up to April 15, 2020 in order to claim sales tax refunds under newly only verification and issuance system.

    In an official memorandum issued on Friday, the FBR condoned the time limit for filing of Annexure – H for the tax period July – October 2019 up to April 15, 2020.

    Annexure-H is a statement for providing stock position by taxpayers along with monthly sales tax return.

    The FBR from July 01, 2019 introduced expeditious payment of sales tax refunds within 72 hours subject to the true filing of Annexure – H.

    Recently, Karachi Tax Bar Association (KTBA) highlighted this issue and urged the tax authorities to resolve for facilitating exporters and manufacturers.

    The KTBA pointed out that as per the amendments made in Sales Tax Rules, 2006 vide SRO no. 918(I)/2019 dated August 7, 2019, mechanism for expeditious processing of refund claim has been devised only for manufacturers-cum- exporters.

    As per the Rules, refund will be treated as having been filed only after filing of Annexure H of the Sales Tax return, for which deadline of 120 days has been prescribed in the Rules and the same can be extended for a period of 60 days on the basis of approval from the Commissioner.

    However, the rules are silent about the mechanism for processing of Sales Tax refunds incase Annexure H has not been filed by manufacturer-cum-exporter for any reason. Considering the legal and legitimate right of the taxpayer to claim adjustment / refund of the input tax, either of the following two option be considered by the FBR for facilitation of exporters:

    Allow filing of Annexure H without any time limit [present time limit of 4 months be abolished and taxpayer be allowed to claim refund as and when required] ii. Incase present limit of 4 months cannot be abolished, registered persons be allowed at least to alternatively file refund on annual basis after the end of the tax year.

    Apart from the above, Annexure H is only being allowed to be filed to taxpayers who have filed the said Annexure from sales tax returns of July 2019 and onwards. Instead of claiming refund, some taxpayers have reported sales tax carried forward balance in their sales tax returns from July 2019 onwards. In case they now intend to file Annexure H from the current month,

    FBR’s online portal does not allow such taxpayers to enter opening balance of inventory / raw materials as the said field in blocked for editing. This limitation should be removed and taxpayers should be allowed to file Annexure H for any specific month, for which they intend to claim refund.

    From apparent mechanism being followed by the system, it appears that those taxpayers who have not filed Annexure H for the month of July 2019 will never be allowed to file Annexure H for any subsequent month. This apparent anomaly should be resolved at earliest.

  • FBR to launch online production monitoring of three major sectors

    FBR to launch online production monitoring of three major sectors

    ISLAMABAD: Federal Board of Revenue (FBR) to launch online monitoring of production in three major sectors for preventing tax evasion.

    The FBR has decided to launch real-time monitoring of production by cement, sugar and fertilizer sectors in order to prevent tax evasion.

    In this regard the FBR issued Invitation for Licence (IFL) for IT based solution for Electronic Monitoring (Trade and Trace System) of specified products i.e. cement, sugar and fertilizer.

    The FBR said that the trade and trace system established, maintained and operated must enable FBR to monitor production activities and to generate real-time information volumes produced at the manufacturing sites, including verification data of collection of applicable taxes relating to specified goods produced.

    The track and trace system must be able to provide FBR enforcement officials and delegated agencies with real-time information enabling them to monitor and control the movement of specified goods through the supply chain, including determination of the origin of the specified goods, as well as to determine their legal status.

    Foreign specified goods imported into Pakistan will have unique identification markings, applicable for Pakistan, already affixed or printed at the point of manufacture outside of country. Similarly, any specified goods produced in Pakistan for export shall be required to carry unique identification markings for intended destination markets.

    The licensee must guarantee to factor these requirements into the system to ensure readability for imported products and application for exported products as per Licensing Rules, 2019.

    The FBR said that though Large Scale Manufacturing (LSM), being the major and comparatively documented sector of our economy, contributes a sizeable chunk of revenue yet the real tax potential of LSM segments like Cigarette, Cement, Sugar, Beverages etc is yet to be realized.

    Currently across the globe Track and Trace technology offers the most feasible, reliable and straightforward solution.

    With minimum human interface Track and Trace technology if implemented in a proper transparent manner it can; a) Safeguard the interest of revenue by mapping and capturing unregistered segment; b) Act as anti-tax fraud tool entailing visible increase in revenue and dis-incentivizing under declaration and; c) Ensure level playing field to all in the aforesaid sectors.

    In order to prevent leakage of revenue, under-reporting of production and sales of specified goods and to ensure proper payment of duties/taxes on the manufacture and sale of specified goods, the FBR is mandated to licence the implementation of a track and trace system; which is to be developed, operated and maintained by the licensee for specified goods manufactured in and imported into Pakistan.

    To this end, the FBR is inviting applications for grant of licence to be issued under the Sales Tax Rules, 2006 (as amended Vide 250(I)/2019 dated 26.02.2019 and SRO. 918(I)/2019 dated 7th August, 2019) for the development, maintenance and operation of track and trace system in accordance with the provisions of the rules and the instructions.

  • No refund payment made on fake claims: FBR

    No refund payment made on fake claims: FBR

    KARACHI: Federal Board of Revenue (FBR) has said that it had never paid refunds against fake claims.

    In a statement issued on Thursday, the FBR clarified the news item about loss of revenue caused due to issuance of refund claims on fake registration by FBR published by some section of press and stated that no fake refund claim has been sanctioned or issued as mentioned in the news items.

    “As no fake refund payment has been made, therefore, the question of loss of government revenue does not arise,” FBR clarified.

    The FBR has initiated the fact finding on the basis of findings of Federal Tax Ombudsman and the report would be presented to FTO within the time limit as directed in the order passed on February 20, 2020.

  • Foreign transactions through debit, credit cards generate Rs670 million income tax

    Foreign transactions through debit, credit cards generate Rs670 million income tax

    KARACHI: The revenue authorities have collected Rs670 million as income tax from foreign transactions through debit or credit card during first eight months of current fiscal year.

    The tax was collected by Regional Tax Office (RTO)-II Karachi. The tax office collected only Rs83 million in the corresponding period of the last fiscal year.

    The collection of withholding tax was introduced through Finance Act, 2018 and it was second year of the collection under this head.

    Section 236Y was inserted to Income Tax Ordinance, 2001 through Finance Act, 2018.

    Under this provision, every banking company shall collect advance tax, at the time of transfer of any sum remitted outside Pakistan, on behalf of any person who has completed a credit card transaction, a debit card transaction, or a prepaid card transaction with a person outside Pakistan at the rate of one percent.

    However, this tax rate shall be 100 percent more in case the person making transactions is not on the Active Taxpayers List (ATL).

    The advance tax collected under this section shall be adjustable.

    Sources in the tax office said that the provision was introduced to check the outflows of remittances through debt and credit cards.

    They said that foreign payments increased phenomenally due to rise in quantum of foreign trade. People were using plastic money to make payments against their foreign purchases.

    The sources further said that many importers instead of opening letter of credit were engaged in direct purchases while making payment through credit cards.

    The FBR sources said that the purpose of introducing this provision was to check the transfer of money and its source. They said that the tax deducted on such transactions is adjustable.

    However, they said that the FBR is monitoring by obtaining information of persons making foreign transactions from banks issuing debit and credit cards.

  • FBR receives 20,000 tax returns in one week

    FBR receives 20,000 tax returns in one week

    ISLAMABAD: Around 20,000 taxpayers have filed their annual income tax returns during one week after expiry of filing date.

    According to latest Active Taxpayers List (ATL) the number of return filers increased to 2.55 million by March 08, 2020.

    There were around 2.53 million return filers when the Federal Board of Revenue (FBR) issued ATL for tax year 2019 on March 01, 2020.

    The last date for filing income tax returns for tax year 2019 was February 28, 2020.

    The return filers including salaried persons, business individuals, Association of Persons (AOPs) and companies can check their names on the ATL by visiting How to check ATL status?

    The filing of income tax return is mandatory for persons driving taxable income or specified under Section 114 of Income Tax Ordinance, 2001.

    The appearance of names on the ATL is only possible after filing income tax returns within due date. In case persons are not on the ATL then the rate of withholding tax shall be increased by 100 percent on various transactions.

    Persons fail to file their returns by due date but file after the date will also not qualify to enlist their name on the ATL until fine is not paid to the Federal Board of Revenue (FBR).

    Currently the ATL is in applicable on the basis of income tax returns filed for tax year 2018. The FBR will issue new ATL on the basis of returns filed for tax year 2019 on March 01, 2020.

    A taxpayer should check his/her status on the ATL before making transactions in order to avail reduced rate of tax rates.

  • Tax collection from rental income surges by 68% on better enforcement

    Tax collection from rental income surges by 68% on better enforcement

    The Regional Tax Office (RTO)-II Karachi has reported a remarkable surge in tax collection from property income during the first eight months (July-February) of the current fiscal year, marking a significant increase of 68 percent.

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