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 nominates 22 customs officers BS-18 for mandatory training course

ISLAMABAD: Federal Board of Revenue (FBR) on Friday nominated 22 officers of BS-18 Pakistan Customs Service (PCS) for training course, which is mandatory for promotion to next scale.

The FBR nominated the officers for 29th Mid Career Management Course (MCMC) that is commencing from February 03, 2020 to May 08, 2020 at National Institute of Management (NIM), Lahore, Karachi, Peshawar and Quetta.

The FBR directed all officers nominated to complete their performance evaluation reports (PERs) up to June 30, 2019 and submit their latest annual medical examination report to FBR by November 11, 2019. The FBR warned that in case any officer fails to do so next in order of seniority will be nominated/communicated to Establishment Division.

The training course is important because it is mandatory for promotion. If an officer is selected for mandatory training, declines to proceed on training for two consecutive training course, he/she would forfeit the right to be considered for promotion, provided that the Prime Minister may dispense with this provision (in any case) in public interest.

Following is the list of PCS/BS-18 officers for 29th MCMC:

01. Tauqeer Ahmed Dar, Deputy Collector, Model Customs Collectorate (MCC) Preventive, Lahore.

02. Muhammad Ali Asad Khan, Deputy Collector, Office of the Chief Collector Customs (Central), Lahore.

03. Tayyab Bukhari, Deputy Collector, MCC Appraisement, Lahore.

04. Asma Bashir, Deputy Collector, MCC AIIA Lahore.

05. Khaidun Ul Haq, Deputy Collector, MCC Gilgit-Baltistan.

06. Syed Babar Ali Shah, Deputy Collector, MCC Sialkot.

07. Fazil Shakoor, Deputy Director, Directorate of Intelligence and Investigation, FBR, Quetta.

08. Muhammad Faisal, Deputy Director, Directorate of Reforms and Automation (Customs), Karachi.

09. Zehra Tahir Naqvi, Deputy Collector, MCC Exports, Custom House, Karachi.

10. Shoukat Hayat, Deputy Director, Directorate General of Transit Trade, Karachi.

11. Shams-ur-Rehman, Deputy Collector, Model Customs Collectorate of Appraisement, Quetta.

12. Falik Shair, Deputy Collector, MCC Gwadar.

13. Ammar Ahmad Mir, Deputy Director, Directorate General of Training and Research (Customs), Karachi.

14. Yawar Nawaz, Deputy Collector, MCC Preventive, Peshawar.

15. Nausheen Riaz Khan, Deputy Director, Directorate of Risk Management, Karachi.

16. Mahwish Shah, Deputy Director, Directorate of Post Clearance Audit, Karachi.

17. Amna Naeem, Deputy Collector, MCC Preventive, Karachi.

18. Shah Faisal, Deputy Collector, MCC Appraisement, Quetta.

19. Abdul Mueed, Deputy Collector, Collectorate of Customs (Adjudication), Faisalabad.

20. Muhammad Rehan Akram, Deputy Collector, MCC Appraisement, Lahore.

21. Palwasha Syed, Deputy Collector, Collectorate of Customs (Adjudication), Lahore.

22. Syed Kareem Adil, Deputy Collector, MCC Hyderabad.

October 25, 2019
Withholding tax collection on profit from bank deposits surges by 194pc

KARACHI: The collection of withholding tax from profit on bank deposits registered unprecedented growth of 194 percent during first quarter of first fiscal year as the tax rates increased by 100 percent for persons not on the Active Taxpayers List (ATL).

Sources in Regional Tax Office (RTO) –II Karachi said that the withholding tax collection under Section 151(1)(b) of Income Tax Ordinance, 2001 increased to Rs14.56 billion during first quarter (July – September) of fiscal year 2019/2020 as compared with Rs4.95 billion in the corresponding period of the last fiscal year.

The sources explained that under Section 151(1)(b) withholding tax is collected on profit on debt paid by banking companies or financial institutions on account or deposit maintained.

Every banking company is required to collect 10 percent of the gross yield/profit paid up to Rs500,000 or 15 percent of the gross yield / profit paid exceeding amount Rs500,000 at the time the profit on debt is credited to the account of the recipient or is actually paid, whichever is earlier.

The sources said that it is mandatory for the banks to collect double the amount of withholding tax from those persons receiving profit on debt but not on the Active Taxpayers List (ATL).

The government through Finance Act, 2019 introduced 10th Schedule to the Income Tax Ordinance, 2001 to enhance the rate of withholding tax by 100 percent on certain transactions.

The measure has been taken to force persons making large transactions and paying withholding tax on such transactions but remained outside the tax net.

The sources said that after the implementation of the 10th Schedule the pace of return filing for Tax Year 2018 increased in order to avoid paying 100 percent higher rate of withholding tax.

According to ATL updated October 21, 2019 the number of return filers were increased to 2.64 million for tax year 2018 as compared with 1.84 million returns received for tax year 2017.

October 24, 2019
Method for determination of input sales tax

KARACHI: Sales tax rules have defined method for determination of input tax claimed by registered persons.

According to rule 25 of Sales Tax Rules 2006, input tax paid on raw materials relating wholly to the taxable supplies shall be admissible under the law.

Input tax paid on raw materials relating wholly to exempt supplies shall not be admissible.

The amount of input tax incurred for making both exempt and taxable supplies shall be apportioned according to the following formula, namely:–

Residual input tax credit on taxable supplies =

Value of taxable supplies
—————————————————- x Residual input tax
(Value of taxable + exempt supplies)

Monthly adjustment of input tax claimed by a registered person under this Chapter shall be treated as provisional adjustment and at the end of each financial year, the registered person shall make final adjustment on the basis of taxable and exempt supplies made during the course of that year.

Any input tax adjustment claimed wrongfully on account of incorrect application of formula set out in sub-rule (3) shall be punishable under the respective provisions of law irrespective of the fact that the claim was provisional.

Federal Board of Revenue (FBR) said that this shall apply to the registered persons who make taxable and exempt supplies simultaneously.

October 23, 2019
Post refund divisions to be set up at RTOs/LTUs to audit claims

ISLAMABAD: Federal Board of Revenue (FBR) has decided to audit sales tax refunds by establishing ‘refund division’ at all Regional Tax Offices (RTOs) and Large Taxpayers Units (LTUs).

According to amended Sales Tax Rules, 2006 issued by the FBR the Rule 27 has been amended to establish Centralized Sales Tax Refund Office (CSTRO), Refund Division and posting of officers.

The FBR said that a CSTRO would be established under the Board for centralized payment of all refund amounts as due under the Act.

Further a Refund Division will be established, which will be headed by an officer, not below the rank of Assistant Commissioner, herein after referred to as officer-in-charge, duly supported by audit staff referred to as processing officers, to examine, process and settle the refund claims filed under these rules.

Further Post Refund Division in each RTO or LTU shall be established, which will be headed by an officer not below the rank of an Assistant Commissioner to audit the refund claims processed and sanctioned by the Refund Division.

The FBR said that that scrutiny of the refund claims processed or sanctioned after the June 30, 2014 shall be carried out on the basis of risk-based selection through computerized Post Refund Scrutiny (PRS):

Provided that where the Commissioner Inland Revenue has reasons to believe that a registered person, whose refund claim was processed or sanctioned, has been paid refund which was not admissible to him, he may direct through order in writing to conduct computerized Post Refund Scrutiny (PRS) of such claim.

Post refund audit of refund claims process through RMS will be the responsibility of the audit Divisions of respective RTO/LTU.

The registered person claiming refund under these rules shall maintain and keep all the paper documents relating to the refund claim, such as invoices, credit notes, debit notes, goods declarations, bank credit advice, etc. in his office.

October 23, 2019
FBR grants performance allowance to officials of MCC Preventive Peshawar

ISLAMABAD: Federal Board of Revenue (FBR) has granted performance allowance equivalent to 100 percent of minimum of basic pay to Customs officials posted at Model Customs Collectorate (Preventive) Peshawar.

In a notification issued on Tuesday, the FBR granted following inspectors of BS-16 of MCC Preventive Peshawar, who have been selected through the process of internal job posting, performance allowance equal to 100 percent of minimum of their basic pay (in pay scale 2011) with effect from October 07, 2019:

01. Ilyas Iqbal

02. Shahroz Khaliq

03. Shah Fahad Khan

04. Zia-ur-Rehman

Grant of Performance Allowance will be governed through the terms and conditions laid down vide Circular No. 6(96)S(BIC)/2013-14 dated 06.03.2015 to be read with Para-10 of Finance Division’s O.M.No.1(3)/Imp/2015-360 dated 07.07.2015. The allowance will be discontinued in case prescribed terms and conditions are not fulfilled within one month from the date of issuance of this notification.

October 22, 2019
Wealth Statement Form: mandatory for filing along with annual return

KARACHI: Filing of wealth statement is mandatory for making annual return form valid. Taxpayers are required to file asset declaration under Section 116 of Income Tax Ordinance, 2001.
(more…)

October 22, 2019
Sale tax refunds to be released on declared stock statement: FBR

ISLAMABAD: Federal Board of Revenue (FBR) on Monday said that refunds will be issued only on stock statement declared by sales tax registered persons.

The FBR issued Sales Tax Circular No. 04 of 2019 to explain the issuance of refund payment under FASTER refund module.

The FBR said that refund will be processed on the basis of entries in Annex-H.

Annexure H is a stock statement declared by a registered taxpayer through his return.

According to the FBR this annexure is mandatory for refund claimants and they may submit this statement within 120 days from due date of return filing of particular tax period; other registered persons are encouraged to provide these details.

The system will show and fill the relevant columns of those items whose closing balance will be greater than zero in proceeding return, but the registered person may add the new items and provide their data manually. The column wise filing details are as follows:

This annexure will be mandatory for refund claimants who will claim any amount of refund at serial 30 of main return and they may submit this statement within 120 days from due date of return filing of particular tax period.

In the latest circular No. 4, the FBR said that in wake of rescission of SRO 1125(I)/2011, it had committed with the exporters of the export oriented sectors i.e. textiles, leather, carpets, sports goods and surgical goods, that refunds shall be paid within 72 hours of filing of refund claim.

For this purpose, FASTER refund module has been developed, which will process claims of exporters of five export-oriented sectors for the tax period July, 2019, and onwards.

FBR has earlier clarified that submission of Annex-H, which is a form in the monthly sales tax return, shall be treated as submission of refund claim.

It is added that the number of refund claims received is not significant. The exporters are facing some difficulties in filing of their tax refund claims (Annex-H) under FASTER. Many claimants have approached the Board with request that they may be allowed revision of their return on the ground that the entries made in Annex-F do not match with those in Annex-H.

It is accordingly clarified that refund is processed on the basis of entries in Annex-H. The entries in Annex-F have no bearing on refund claim except that carry forward of value addition tax is excluded from refund amount.

Accordingly, the claimants are advised not to revise the returns on the ground that entries in Annex-F do not match with those in Annex-H.

They should submit Annex-H, if not already submitted so that their claims can be processed.

Further, field formations are advised not to draw an adverse inference if the Annex-F does not match with Annex-H in case of monthly returns already submitted.

October 21, 2019
Tax collected on prize bond winning to be final

KARACHI: The withholding tax collected on winning of prize bond shall be final tax liability either it is collected from person appeared on Active Taxpayers List (ATL) or not.

Sources in Federal Board of Revenue (FBR) said that the withholding tax collected on winning of prize bonds may not be adjusted against the total tax liability of a taxpayer.

Similarly, the withholding tax deducted on winning from a raffle, lottery or winning a quiz, prize offered by companies will also not be adjustable.

The collection of tax has been made under Section 156 of Income Tax Ordinance, 2001. While from tax year 2020 the withholding tax under this section has been increased by 100 percent for those persons not appearing on ATL.

Section 156: Prizes and winnings

Sub-Section (1): Every person paying 10[prize on] a prize bond, or winnings from a raffle, lottery, prize on winning a quiz, prize offered by companies for promotion of sale, or cross-word puzzle shall deduct tax from the gross amount paid at the rate specified in Division VI of Part III of the First Schedule.

Sub-Section (2): Where a prize, referred to in sub-section (1), is not in cash, the person while giving the prize shall collect tax on the fair market value of the prize.

Sub-Section (3): The tax deductible under sub-section (1) or collected under sub-section (2) shall be final tax on the income from prizes or winnings referred to in the said sub-sections.

The tax rate as specified under Division VI of Part III of the First Schedule of Income Tax Ordinance, 2001, shall be:

(1) The rate of tax to be deducted under section 156 on a prize on prize bond or cross-word puzzle shall be 15 percent of the gross amount paid.

(2) The rate of tax to be deducted under section 156 on winnings from a raffle, lottery, prize on winning a quiz, prize offered by a company for promotion of sale, shall be 20 percent of the gross amount paid.

However, with the introduction of Tenth Schedule of Income Tax Ordinance, 2001 the tax rate to be collected on such winning will be increased by 100 percent from persons not appearing on the ATL.

Therefore the tax rate on winning prize bond from person not appearing on ATL will be 30 percent. Similarly, the rate of tax will be 40 percent from persons wining winnings from a raffle, lottery, prize on winning a quiz, prize offered by a company for promotion of sale.

October 21, 2019
No refund, input adjustment to be entertained on invoice issued prior or after of blacklisting

KARACHI: Federal Board of Revenue (FBR) said invoices issued by a person prior or after blacklisting for sales tax will not be entertained for refunds or input adjustment.

The FBR issued Sales Tax Act, 1990 updated till June 30, 2019 incorporating amendments brought through Finance Act, 2019.

Section 21 of the Act explained blacklisting and suspension of a taxpayer for sales tax.

Section 21: De-registration, blacklisting and suspension of registration

Sub-Section (1): The Board or any officer, authorized in this behalf, may subject to the rules, de-register a registered person or such class of registered persons not required to be registered under this Act.

Sub-Section (2): Notwithstanding anything contained in this Act, in cases where the Commissioner is satisfied that a registered person is found to have issued fake invoices or has otherwise committed tax fraud, he may blacklist such person or suspend his registration in accordance with such procedure as the Board may by notification in the official Gazette, prescribe.

Sub-Section (3): During the period of suspension of registration, the invoices issued by such person shall not be entertained for the purposes of sales tax refund or input tax credit, and once such person is black listed, the refund or input tax credit claimed against the invoices issued by him, whether prior or after such black listing, shall be rejected through a self-speaking appealable order and after affording an opportunity of being heard to such person.

Sub-Section (4): Notwithstanding anything contained in this Act, where the Board, the concerned Commissioner or any officer authorized by the Board in this behalf has reasons to believe that a registered person is engaged in issuing fake or flying invoices, claiming fraudulent input tax or refunds, does not physically exist or conduct actual business, or is committing any other fraudulent activity, the Board, concerned Commissioner or such Officer may after recording reasons in writing, block the refunds or input tax adjustments of such person and direct the concerned Commissioner having jurisdiction for further investigation and appropriate legal action.

October 21, 2019
Harsh penalties for pilferage of transshipped goods

KARACHI: Customs laws has defined harsh penalties for pilferage or replaced enroute of transshipment of goods without payment of duty.

Federal Board of Revenue (FBR) issued Customs Act, 1960 updated till June 30, 2019 incorporating changes brought through Finance Act, 2019.

According to the customs laws

If any goods which are loaded for transshipment, are pilfered, replaced en-route or failed to reach the port of destination, or any person transships goods not allowed to be transshipped;

Then such goods and the conveyance illegally carrying these goods shall be liable to confiscation and any person including the custodian involved in the offence and the bonded carrier shall be liable to a penalty not exceeding ten times the value of the goods and he shall further be liable, upon conviction by a Special Judge, to imprisonment for a term not exceeding seven years.

If any person contravenes any rule relating to transshipment other than mentioned above;

Then such person including the custodian and the inland carrier shall be liable to penalty not exceeding five hundred thousand rupees or three times the amount of duties and taxes involved.

Under Section 121 of the Act, the transshipment of goods without payment of duty has been allowed.

Section 121: Transshipment of goods without payment of duty

Sub-Section (1): Subject to the provisions of section 15 and the rules, the appropriate officer may, on application by the owner of any goods imported at any customs-station and specially and distinctly manifested at the time of importation as for transshipment to some other customs-station or foreign destination, grant leave to transship the same without payment of duty, if any, chargeable on such goods with or without any security or bond for the due arrival and entry of the goods at the customs-station of destination:

Provided that at customs-station where the Custom Computerized System, is operational, the system may automatically authorize transshipment to other customs-station subject to risk selectivity criteria.

Sub-Section (2): The Board may, subject to rules and such conditions as it may deem fit to impose, authorize certain carriers to transport goods under the multimodal, scheme. Goods transported under the multimodal scheme shall be specially and distinctly manifested at the time of importation as for transshipment to some other customs-station or foreign destination and shall not –

(a) require distinct permission for transshipment from the customs-station of first entry into the country to be transported to the customs-station of destination. The principal carrier issuing the multimodal bill of lading or air way bill will be responsible for the sanctity of the cargo during transportation between the customs-station of first entry into the country to the customs-station of destination; and

(b) be subject to the risk management system at the customs station of first entry.

Sub-Section (3): The Board may, subject to such conditions as it may deem fit, grant license to any carrier to carry goods under the multimodal scheme.

October 20, 2019