KARACHI: Dr Abdul Hafeez Shaikh, Adviser to the Prime Minister on Finance and Revenue on Thursday directed Federal Board of Revenue (FBR) to make payment of all income tax refunds of up to Rs 50 million in the next couple of weeks.
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FBR reorganizes DG transit trade; authorizes tracking of NATO, ISAF cargo
ISLAMABAD: Directorate General of Transit Trade has been authorized to track cargo movement of Afghan transit, NATO/ISAF and transshipment in order to avoid incidence of en-route goods slippage.
Federal Board of Revenue (FBR) on Wednesday issued SRO 609(I)/2020 for reorganization of the Directorate General of Transit Trade.
The FBR said that the directorate shall be based at Custom House, Karachi, assisted by Director, Directorate of transit Trade (HQ), Karachi.
The directorate general shall have its regional offices at Karachi, Gwadar, Quetta, Peshawar, Gilgit-Baltistan and Lahore. The director general shall report to the Member (Customs), FBR.
The directorate general of transit trade shall be responsible for enforcement of all the international agreements, treaties, conventions, domestic laws, rules and procedures relating to transit trade with reference to cross border movement of bonded cargo and domestic laws, rules and procedures relating to transshipment with reference to inland movement of bonded cargo and shall also be responsible for enforcement of laws, rules and procedures relating to international transshipment, through the respective directorates and collectorates.
The directorate general shall also supervise functioning of the directorates, furnish policy input to the FBR on matters relating to transit trade and transshipment and maintain liaison with all stakeholders.
The Director, Directorate of Transit Trade (HQ) Karachi shall have jurisdiction over all customs matters relating to transit, transshipment and allied functions in respect of the national territory of whole of Pakistan covering the following functions and customs matters:
(i) Project Director in terms of SRO 4139i0/2012 dated April 25, 2012.
(ii) Supervision of tracking and monitoring across the national territory through the Central Control Room (CCR), established at Custom House, Karachi, in coordination with Regional Control Rooms (RCRs) established at respective directorates of transit trade of the following cargo:
(a) Transit cargo;
(b) POL products exported to Afghanistan;
(c) US or NATO or ISAF cargo;
(d) Transshipment cargo;
(e) Safe transportation cargo;
(f) EPZ/SEZ/Free Zones cargo;
(g) Manufacturing bonds exports cargo;
(h) Export oriented units exports cargo;
(i) Transportation of imported liquid bulk cargo for exclusive use of ISAF/NATO forces in Afghanistan.
(iii) Administration, budgeting and supervision of the Mobile Enforcement Units (MEUs) deployed at Transit Monitoring Response Centers (TMRCs) across the country;
(iv) Sealing of cargo at Karachi sea ports and Port Qasim with respect to the following cargo:
(a) Transit cargo;
(b) POL products exported to Afghanistan;
(c) US or NATO or ISAF cargo;
(d) Transshipment cargo;
(e) Safe transportation cargo;
(f) EPZ/SEZ/Free Zones cargo
(g) Manufacturing bonds exports cargo;
(h) Export oriented units exports cargo;
(i) Transportation of imported liquid bulk cargo for exclusive use of ISAF / NATO forces in Afghanistan.
(v) Licensing of tracking companies in terms of SRO 413(I)/2012 dated April 25, 2012;
(vi) Development, supervision and maintenance of transit trade facilitation portal including coordination with the relevant stakeholders.
(vii) Development, supervision and updation of Risk Management System (RMS) through the local committee constituted for transit and transshipment RMS, including coordination with the relevant stakeholders;
(viii) Association in development, updation and enhancement of MIS function;
(ix) Personal management;
(x) Coordination with all stakeholders for operational purposes;
(xi) Business process re-engineering;
(xii) Transit trade facilitation and redressal of complaints; and
(xiii) Any other function assigned by the FBR from time to time.
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Pakistan, Hungary sign treaty for exchange of information
ISLAMABAD: Pakistan and Hungary have signed a treaty for exchange of information under newer version of protocol of avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, a statement issued by Federal Board of Revenue (FBR) said on Wednesday.
Hungarian Ambassador to Pakistan Istvan Szabo signed the Protocol on behalf of Government of Hungary, while Dr. Muhammad Ashfaq Ahmed, Member (Inland Revenue Operations)/Additional Secretary inked it on behalf of Pakistan.
The Article 27 of the Convention deals with Exchange of Information. Organization for Economic Cooperation and Development (OECD) approved changes in the Article on Exchange of Information in July 2012 to include provisions concerning cooperation between the tax administrations of the two Contracting States.
The present article embodies the rules under which information may be exchanged to the widest possible extent to include taxes other than the income tax.
Therefore, to incorporate the latest standard of administrative assistance in the extant Convention, Pakistan and Hungary decided to replace the Article on Exchange of Information with the new version through Protocol.
The new Article on exchange of information provides that the competent authorities of the Contracting States shall exchange such information that will not be restricted by Article 1 & 2 of the Convention and no state shall decline to provide information merely for the reason that such information is of no interest to it, or because the information is held by a bank, other financial institution or nominee or a person acting in an agency or fiduciary capacity.
According to the new version of the Article, the Contracting States shall exchange such information on request as is foreseeably relevant for carrying out of provisions of the convention or to the administration or enforcement of the domestic tax laws of the requesting state.
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FBR to prescribe valuation method for used vehicles
ISLAMABAD: Federal Board of Revenue (FBR) will prescribe method for valuation of used vehicles for the purpose of sales tax.
FBR sources said that amendment has been made to Sales Tax Act, 1990 through Finance Act, 2020 related to value of supply of used vehicles.
According to the amendment, in case of registered person who is engaged in purchasing used vehicles from general public on which sales tax had already been paid at the time of import or manufacturing, and which paid at the time of import or manufacturing, and which are, later on, sold in the open market after making certain value addition, value of supply will be difference between sale and purchase price of the said vehicles on the basis of the valuation method prescribed by the board [FBR].
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Procedure for alternate dispute resolution
ISLAMABAD: Federal Board of Revenue (FBR) has laid down procedure for alternate dispute resolution (ADR) in order to provide a platform to taxpayers for expeditious resolution of their cases.
A new section 134A has been introduced to Income Tax Ordinance, 2001 through Finance Act 2020.
Section 134A. Alternative dispute resolution.
(1) Notwithstanding any other provision of this Ordinance, or the rules made thereunder, an aggrieved person in connection with any dispute pending before a court of law or an appellate authority pertaining to—
(a) the liability of tax against the aggrieved person, or admissibility of refunds, as the case may be;
(b) the extent of waiver of default surcharge and penalty; or
(c) any other specific relief required to resolve the dispute, may apply to the Board for the appointment of a committee for the resolution of any hardship or dispute mentioned in detail in the application, which is under litigation in any court of law or an appellate authority, except where criminal proceedings have been initiated or where interpretation of question of law having effect on identical cases is involved having effect on other cases.
(2) The Board may, after examination of the application of an aggrieved person, appoint a committee, within sixty days of receipt of such application in the Board, comprising,—
(i) Chief Commissioner Inland Revenue having jurisdiction over the case;
(ii) two persons from a panel notified by the Board comprising of chartered accountants, cost and management accountants, advocates, having minimum of ten years’ experience in the field of taxation and reputable businessmen.
(3) The Board shall communicate the order of appointment of committee to the court of law or the appellate authority where the dispute is pending and the Commissioner.
(4) The Committee appointed under sub-section (2) shall examine the issue and may, if it deemed necessary, conduct inquiry, seek expert opinion, direct any officer of the Inland Revenue or any other person to conduct an audit and shall decide the dispute through consensus, within one hundred and twenty days of its appointment.
(5) The Committee may, in case of hardship, stay recovery of tax payable in respect of dispute pending before it for a period not exceeding one hundred and twenty days in aggregate or till the decision of the committee or its dissolution, whichever is earlier.
(6) The decision of the committee under sub-section (4) shall be binding on the Commissioner when the aggrieved person, being satisfied with the decision, has withdrawn the appeal pending before the court of law or any appellate authority and has communicated the order of withdrawal to the Commissioner:
Provided that if the order of withdrawal is not communicated to the Commissioner within sixty days of the service of decision of the committee upon the aggrieved person, the decision of the committee shall not be binding on the Commissioner.
(7) If the Committee fails to decide within the period of one hundred and twenty days under sub-section (4), the Board shall dissolve the committee by an order in writing and the matter shall be decided by the court of law or the appellate authority where the dispute is pending.
(8) The Board shall communicate the order of dissolution to the court of law or the appellate authority and the Commissioner.
(9) The aggrieved person, on receipt of the order of dissolution, shall communicate it to the court of law or the appellate authority, where the dispute is pending.
(10) The aggrieved person may make the payment of income tax and other taxes as decided by the committee under sub-section (4) and all decisions and orders made or passed shall stand modified to that extent.
(11) The Board may prescribe the amount to be paid as remuneration for the services of the members of the committee, other than the member appointed under clause (i) of sub-section (2).
(12) The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section.
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FBR extends warehousing period up to July 31
ISLAMABAD: The Federal Board of Revenue (FBR) has taken a significant step by extending the warehousing period for already in-bonded goods up to July 31, 2020.
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Taxpayers need to update profile to ensure active status
ISLAMABAD: Taxpayers are mandatorily required to update their profit in order to keep their name in the Active Taxpayers List (ATL), sources in Federal Board of Revenue (FBR) said.
Amendment has been made to Income Tax Ordinance, 2001 through Finance Act, 2020, which is approved by the National Assembly.
A new sub-section 2 has been included to Section 182A of the Ordinance, to make it mandatory for taxpayers to update their profile on the FBR’s online system in order to ensure their names are on the ATL.
The new sub-section is read as:
“(2) Where a person fails to furnish or update a taxpayer’s profile within due date or time specified in sub-section (3) of Section 114A or within the date as extended by the Board (FBR) under Section 214A, such person shall not be included in the active taxpayers’ list for the latest tax year ending prior to the aforesaid due date or extended date:
“Provided that without prejudice to any other liability under this ordinance, such person shall be included in the active taxpayers’ list upon filing the taxpayers’ profile after the due date or extended date, if the person pays surcharge at Rupees –
(a) twenty thousand in case of a company;
(b) ten thousand in case of an association of persons; and
(c) one thousand in case of an individual.”
Through the Finance Act, 2020 fine and penalty have also been prescribed:
Any person who is required to furnish or update a taxpayer’s profit but fails to furnish or update within the due date: such a person shall pay a penalty of Rs2500 for each day of default from the due date subject to a minimum penalty of Rs10,000.
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Period for filing withholding tax statement reduced
ISLAMABAD: Withholding agents are required to file statement of deduction and collection on quarterly basis instead bi-annual.
The change has been brought through Finance Act, 2020 by amending section 165 of the Income Tax Ordinance, 2001.
Sources in Federal Board of Revenue (FBR) said that the change was brought on the proposal of business community as submission of record bi-annual was creating difficulties.
The withholding statement was required to file on monthly basis. However, through Finance Supplementary (Second Amendment) Act, 2019 the relevant law was amendment and it was made on bi-annual basis.
And now it is again reduced to quarterly basis through Finance Act 2020.
The FBR sources said that the withholding statement is required to be submitted on:
(a) in respect of quarter ending on the 31st day of March, on or before the 20th day of April;
(b) in respect of quarter year ending on the 30th day of June, on or before the 20th day of July;
(c) in respect of quarter ending on the 30th day of September, on or before the 20th day of October; and
(d) in respect of quarter ending on or before the 31st day of December, on or before the 20th January.
The FBR sources said that the withholding agents would provide following details of persons whose tax were deducted along with the statement, which would include:
(a) the name, Computerized National Identity Card Number, National Tax Number and address of each person from whom tax has been collected under Division II of this Part or Chapter XII or the Tenth Schedule or to whom payments have been made from which tax has been deducted under Division III of this Part or Chapter XII or the Tenth Schedule in each quarter.
(b) the total amount of payments made to a person from which tax has been deducted under Division III of this Part or Chapter XII or the Tenth Schedule in each quarter.
(c) the total amount of tax collected from a person under Division II of this Part or Chapter XII or the Tenth Schedule or deducted from payments made to a person under Division III of this Part or Chapter XII or the Tenth Schedule in each quarter; and
(d) such other particulars as may be prescribed:
Provided that every person as provided in sub-section (1) shall be required to file withholding statement even where no withholding tax is collected or deducted during the period.
Explanation.— For the removal of doubt, it is clarified that this sub-section overrides all conflicting provisions contained in the Protection of Economic Reforms Act, 1992 (XII of 1992), the Banking Companies Ordinance, 1962 (LVII of 1962), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject, in so far as divulgence of information under section 165 is concerned.
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FBR promotes 29 officials to post of assistant private secretary
ISLAMABAD: Federal Board of Revenue (FBR) has notified promotions of 29 steno-typists (BS-14) to the post of Assistant Private Secretary (BS-16).
In a notification issued on Friday (July 10) the FBR notified promotions of following officials:
01. Aurangzeb, RTO, Peshawar
02. Waseem Iqbal, RTO, Islamabad
03. Sulaiman Ahmed, RTO, Islamabad
04. Allah Ditta, RTO, Rawalpindi
05. Syed Shafqat Abbas, RTO, Gujranwala
06. Iftikhar Ahmad Naseer, RTO, Gujranwala
07. Syed Riaz Ahmad, RTO, Gujranwala
08. Muhammad Abbas, RTO, Gujranwala
09. Shabbir Ahmed, CRTO, Lahore
10. Muhammad Yousaf, CRTO, Lahore
11. Bashir Ahmed, RTO, Sargodha
12. Muhammad Feroz, RTO, Sargodha
13. Zia Rasool, RTO, Multan
14. Saeed Ahmad, RTO, Bahawalpur
15. Muhammad Ahmed, RTO, Bahawalpur
16. Nasir Ali Khan, RTO, Hyderabad
17. Muhammad Shafique, RTO, Hyderabad
18. Muhammad Abid, CRTO, Karachi
19. Syed Ghufran Ahmed, CRTO, Karachi
20. Zuhair Ahmed, CRTO, Karachi
21. Abdul Shakoor Awan, CRTO, Karachi
22. Shafiq ur Rehman, CRTO, Karachi
23. Ms. Shahla Riaz, CRTO, Karachi
24. Syed Riffat Farid Nizami, CRTO, Karachi
25. Munawar Ali, CRTO, Karachi
26. Anisur Rehman, CRTO, Karachi
27. Ms. Kausar Jehan, CRTO, Karachi
28. Hussain Ahmed, CRTO, Karachi
29. Syed Qamar ul Hassan, CRTO, Karachi
The FBR said that the promotion would take effect from the date of their joining, subject to the condition that no disciplinary proceedings are pending against them.
The FBR further said that the officials would be on probation for a period of one year, extendable for further period not exceeding one year, provided that if no order is issued by the day following the termination of probationary period, the appointment shall be deemed to be held until further orders.
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FBR empowered to recover income tax on sectoral benchmark basis
ISLAMABAD: The officials of Federal Board of Revenue (FBR) have been authorized to recover income tax on sectoral benchmark ratio basis where a taxpayer fails to provide record or required details.
The concept of sectoral benchmark ratios has been introduced through Finance Act 2020 for making recovery of unexplained income by taxpayers. In this regard an amendment has been made to Section 177 of Income Tax Ordinance, 2001.
A new subsection 2AA has been introduced to Section 177, under which, where a taxpayer
(a) has not furnished record or documents including books of accounts;
(b) has furnished incomplete record or books of accounts; or
(c) is unable to provide sufficient explanation regarding the defects in records, documents or books of accounts,
Is shall be construed that taxable income has not been correctly declared and the commissioner shall determine taxable income on the basis of sectoral benchmark ratios prescribed by the FBR.
An explanation has been added to sub-section, stating that the expression ‘sectoral benchmark ratios’ means standard business sector ratios notified by the board on the basis of comparative cases and includes financial ratios, production ratios, gross profit ratio, net profit ratio, recovery ratio, wastage ratio and such other ratios in respect of such sectors as may be prescribed.