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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.

  • Withholding tax card 2019/2020: minimum Rs20,000 payable on wedding event in major cities

    Withholding tax card 2019/2020: minimum Rs20,000 payable on wedding event in major cities

    ISLAMABAD: Federal Board of Revenue (FBR) to collect minimum Rs20,000 as adjustable advance tax from a person, who makes payment for wedding event at a commercial hall or lawn in major cities of the country.

    According to updated withholding tax card for tax year 2019/2020 effective from July 01, 2019, the FBR said that under Section 236D of Income Tax Ordinance, 2001, prescribed persons / withholding agents shall collected the adjustable advance tax from person holding or arranging a function.

    Every prescribed person shall collect tax under Section 236D(1) on the total amount of bill paid by a person holding or arranging functions in a marriage hall, Marquee, Hotel, Restaurant, Commercial Lawn, Clubs, Community Place or any other place used for such purpose:

    tax rate for the function of marriage shall be:

    5 percent of the bill ad valorem or Rs. 20,000, whichever is higher for the following cities:

    Islamabad, Lahore, Multan, Faisalabad, Rawalpindi, Gujranwala, Bahawalpur, Sargodha, Sahiwal, Shekhupura, Dera Ghazi Khan, Karachi, Hyderabad, Sukkur, Thatta, Larkana, Mirpur Khas, Nawabshah, Peshawar, Mardan, Abbottabad, Kohat, Dera Ismail Khan,

    Quetta, Sibi, Loralai, Khuzdar, Dera Murad Jamali

    (ii) 5 percent of the bill ad valorem or Rs. 10,000/- whichever is higher for other cities.

    [New proviso]

    The rate for the function of marriage will be 5 percent of the bill ad valorem or Rs. 5,000/- whichever is higher :

    (a) In the case of a marriage hall, marquee or a community place, with total function area less 500 sq. yards; or

    (b) In case of a multi storied premises, with the largest total function area on one floor less than 500 sq. yards.

    The FBR said that under Section 236D(2) the tax rate for other functions shall be five percent on payment of food, service, or any other facility related to function and gathering.

  • FBR notifies last date of payment, sales tax return filing by electricity, gas companies

    FBR notifies last date of payment, sales tax return filing by electricity, gas companies

    ISLAMABAD: Federal Board of Revenue (FBR) has notified date for payment and filing monthly sales tax returns by electricity and gas distribution companies.

    The FBR amended Rule 18 of Sales Tax Rules, 2006 through SRO 918(I)/2019 dated August 07, 2019, under which registered persons are required to file monthly sales tax electronic returns.

    According to FBR, the due date of payment for electricity distribution companies is 18th of the month following the tax period in which the bill or invoice has been issued for the supplies made during the billing period. While the last date for filing returns electronically is 21sth day following the 18th day (for payment).

    For Independent Power Producers, the FBR said that the last date of payment is 22nd day of the month following the tax period of which sales tax invoice relates. The last date for electronic filing of sales tax return is 25th day following the 22nd day (for payment).

    In case of gas transmission and distribution companies, the last date of payment is 15th of the month following the tax period in which the bill or invoice has been issued for the supplies made during the billing period. The last date for electronically filing sales tax returns is 18th day following the 15th day (for payment).

    The FBR said that the last date of depositing sales tax collected on supplies by petroleum exploration and production companies is 18th of the month following the tax period in which supplies were made. While the last date for filing sales tax return is 21st day following the 18th day (for payment).

    The CNG dealers are required to make payment and file sales tax returns on quarterly basis. The FBR said that the last date of payment in case of CNG dealers is 15th day of the month following the end of quarter of the financia year. The last date for electronically filing sales tax return is 18th day following the 15th day (for payment).

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  • FBR excludes self-generated goodwill from intangibles

    FBR excludes self-generated goodwill from intangibles

    ISLAMABAD: Federal Board of Revenue (FBR) has said that self-generated goodwill or any adjustment arising on account of account treatment as may be prescribed in rules has been excluded from the definition of intangibles.

    Explaining the changes made to Income Tax Ordinance, 2001 through Finance Act, 2019, the FBR said that the term intangible has been defined in sub-section (11) of section 24.

    The Ordinance defines the intangible as: “any patent, invention, design or model, secret formula or process, copyright, trade mark, scientific or technical knowledge, computer software, motion picture film, export quotas, franchise, licence, intellectual property, or other like property or right, contractual rights and any expenditure that provides an advantage or benefit for a period of more than one year (other than expenditure incurred to acquire a depreciable asset or unimproved land).

    The FBR said that amortization deduction has been allowed under Section 24 for the cost of a person’s intangibles that have a normal useful life exceeding one year and that are wholly or partly used by the person in the tax year in deriving income from business chargeable to tax.

    Amortization deduction for a tax year is computed by dividing the cost of the intangible over normal useful life of the intangible in whole year.

    Prior to the Finance Act, 2019, sub-section (4) of Section 24 stated that where an intangible had a normal useful life of more than ten years or where its useful life was not ascertainable, it was treated to have a normal useful life of 10 years.

    Through the Finance Act, 2019, sub-section (4) of Section 24 has been substituted to the effect that an intangible shall now be amortized over its actual normal useful life which can extend beyond ten years also.

    Further, where the normal useful life is not ascertainable, the intangible shall be treated to have normal useful life of 25 years.

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  • FBR directs gas utilities to refuse commercial, industrial connections to non-ATL persons

    FBR directs gas utilities to refuse commercial, industrial connections to non-ATL persons

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday directed gas utilities not to provide connection to unregistered persons or not appeared on Active Taxpayers List (ATL).

    Chairman FBR Syed Shabbar Zaidi has sent letters to Managing Directors Sui Northern Gas Company Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) wherein he has requested that consumers not present on ATL under Section 181A of Income Tax Ordinance, 2001 may not be provided commercial and industrial gas connections.

    Section 181 AA states: “Notwithstanding anything contained in any law, for the time being in force, any application for commercial or industrial connection, of electricity or gas shall not be processed and such connection, shall not be provided unless the person applying for electricity or gas connection is registered under Section 181A.”

    Under this provision of law a person seeking gas connection should be on Active Taxpayers List of the FBR.

    The chairman has stated in the letter that many users of commercial and industrial gas connection do not fall within ATL of the FBR.

    The chairman has requested that the list of all persons using industrial and commercial gas connections be shared with FBR as soon as possible.

    Moreover, intimation may be issued by the company to the users of such connections to comply with the aforesaid conditions laid down under the Income Tax law.

    The chairman has suggested appointing a ‘focal person’ to coordinate with FBR for this purpose.

  • FBR urges consumers to provide sales tax deduction by unregistered persons

    FBR urges consumers to provide sales tax deduction by unregistered persons

    ISLAMABAD: Federal Board of Revenue (FBR) has urged consumers to provide invoices showing deduction of sales tax by unregistered persons.

    The FBR on Friday appealed the people to file complaints against charge of sales tax by unregistered businessmen.

    “The consumers’ are encouraged to send the images of such invoices or report the matter to FBR for action,” said a statement.

    It said that the FBR had issued a circular which has stated that general public has reported complaints against the businessmen who are charging sales tax from consumers without being registered with FBR under the Sales Tax Act, 1990.

    It is, therefore, clarified that sales tax registration number (STRN) (thirteen digits) is issued to every person who is registered for sales tax purpose and only that person is authorized to change sales tax on his taxable sales except where goods fall under third schedule to the Sales Tax Act, 1990.

    A business which is not registered for sales tax and does not have an STRN is not authorized to charge sales tax on the invoice.

    It is advised in the public interest that an invoice which does not bear a valid STRN should not include any sales tax amount and if any sales tax amount is indicated, the customer is entitled to demand a sales tax invoice with STRN printed on it.

    FBR has further clarified that mentioning of NTN is not a substitute for STRN. In order to facilitate the general public and providing a check on abuse of system, FBR has installed a special help line for this matter.

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  • FBR extends date for filing sales tax, federal excise return

    FBR extends date for filing sales tax, federal excise return

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday extended the date for filing sales tax and federal excise return for the month of July 2019.

    A notification issued by the FBR said that the annexures of sales and purchases, which are due on August 10, 2019 cab be submitted up to August 16, 2019.

    The FBR further said that payment of sales tax and federal excise duty, which is due on August 15, 2019 can be made up to August 19, 2019.

    Similarly, the date for submitting sales tax and federal excise return, which is due on August 18, 2019, has been extended up to August 21, 2019.

    The FBR said that the date has been extended considering the Eid holidays.

  • FBR reinstates 10 customs officials into service on FST order

    FBR reinstates 10 customs officials into service on FST order

    ISLAMABAD: Federal Board of Revenue (FBR) has re-instated 10 customs officials into service in compliance to order passed by Federal Service Tribunal (FST), Lahore.

    The FBR issued notifications on Thursday to re-instate the officials in pursuance of judgment passed by FST, Lahore on July 11, 2019.

    Following are the notifications:

    01.No. 2072-C-III/2019:- In pursuance of judgment dated 11.07.2019 passed by Federal Service Tribunal, Lahore in Appeal No.508(L)CS/2017, Zahid Raza Bukhari, Ex-Superintendent, Directorate of Intelligence & Investigation-Customs, Faisalabadwho was removed from service on 08.05.2017 and subsequently converted into compulsory retirement vide FBR’s Notification No.2513-C-III/2017 dated 11.09.2017, is hereby re-instated into service with effect from 08.05.2017 i.e. the date of his removal from service. The intervening period from 08.05.2017 to 21.03.2018 during which he remained out of service is treated as period spent on duty.2. He retired from service on 21.03.2018 (A.N.) on attaining the age of superannuation.

    02.No. 2070-C-III/2019:-In pursuance of judgment dated 11.07.2019 passed by Federal Service Tribunal, Lahore in Appeal No.510(L)CS/2017, Mansoor Alam, Ex-Inspector, Model Customs Collectorate, Faisalabad who was compulsorily retired from service vide FBR’s Notification No.1414-C-III/2017 dated 08.05.2017, is hereby re-instated into service with effect from 08.05.2017 i.e. the date of his Compulsory Retirement. The matter of back benefits for the intervening period from 08.05.2017 todate during which he remained out of service, shall depend upon final outcome of denovo proceedings to be initiated against him in due course of time in the light of FST judgment.

    03.No. 2071-C-III/2019:-In pursuance of judgment dated 11.07.2019 passed by Federal Service Tribunal, Lahore in Appeal No.511(L)CS/2017, Amjad Iqbal Cheema, Ex-Inspector, Model Customs Collectorate, Faisalabad who was compulsorily retired from service vide FBR’s Notification No.1413-C-III/2017 dated 08.05.2017, is hereby re-instated into service with effect from 08.05.2017 i.e. the date of his Compulsory Retirement. The matter of back benefits for the intervening period from 08.05.2017 to date during which he remained out of service, shall depend upon final outcome of denovo proceedings to be initiated against him in due course of time in the light of FST judgment.

    04. No. 2069-C-III/2019:-In pursuance of judgment dated 11.07.2019 passed by Federal Service Tribunal, Lahore in Appeal No.509(L)CS/2017, Muhammad Ramzan, Ex-Inspector, Directorate of Intelligence & Investigation-Customs, Faisalabad who was removed from service on 08.05.2017 and subsequently converted into compulsory retirement vide FBR’s Notification No.2516-C-III/2017 dated 11.09.2017, is hereby re-instated into service with effect from 08.05.2017 i.e. the date of his removal from service. The matter of back benefits for the intervening period from 08.05.2017 to date during which he remained out of service, shall depend upon final outcome of denovo proceedings to be initiated against him in due course of time in the light of FST judgment

    05. No. 2068-C-III/2019:-In pursuance of judgment dated 11.07.2019 passed by Federal Service Tribunal, Lahore in Appeal No.507(L)CS/2017, Ali Zahid, Ex-Inspector, Model Customs Collectorate, Faisalabad who was removed from service on 08.05.2017 and subsequently converted into compulsory retirement vide FBR’s Notification No.2515-C-III/2017 dated 11.09.2017, is hereby re-instated into service with effect from 08.05.2017 i.e. the date of his removal from service. The matter of back benefits for the intervening period from 08.05.2017 to date during which he remained out of service, shall depend upon final outcome of denovo proceedings to be initiated against him in due course of time in the light of FST judgment

    06. No. 2063-C-III/2019:-In pursuance of judgment dated 11.07.2019 passed by Federal Service Tribunal, Lahore in Appeal No.496(L)CS/2017, Asad Mahmood, Ex-Inspector, Model Customs Collectorate, Sialkot who was compulsorily retired from service vide FBR’s Notification No.1428-C-III/2017 dated 08.05.2017, is hereby re-instated into service with effect from 08.05.2017 i.e. the date of his Compulsory Retirement. The matter of back benefits for the intervening period from 08.05.2017 to date during which he remained out of service, shall depend upon final outcome of denovo proceedings to be initiated against him in due course of time in the light of FST judgment.

    07. No. 2066-C-III/2019:- In pursuance of judgment dated 11.07.2019 passed by Federal Service Tribunal, Lahore in Appeal No.498(L)CS/2017, Syed Akmal Hussain Shah, Ex-Inspector, Model Customs Collectorate, Sialkot who was compulsorily retired from service vide FBR’s Notification No.1430-C-III/2017 dated 08.05.2017, is hereby re-instated into service with effect from 08.05.2017 i.e. the date of his Compulsory Retirement. The matter of back benefits for the intervening period from 08.05.2017 to date during which he remained out of service, shall depend upon final outcome of denovo proceedings to be initiated against him in due course of time in the light of FST judgment

    08. No. 2060-C-III/2019:- In pursuance of judgment dated 11.07.2019 passed by Federal Service Tribunal, Lahore in Appeal No.495(L)CS/2017, Shafqat-uz-Zaman Cheema, Ex-Inspector, Model Customs Collectorate, Sialkot who was compulsorily retired from service vide FBR’s Notification No.1429-C-III/2017 dated 08.05.2017, is hereby re-instated into service with effect from 08.05.2017 i.e. the date of his Compulsory Retirement. The matter of back benefits for the intervening period from 08.05.2017 to date during which he remained out of service, shall depend upon final outcome of denovo proceedings to be initiated against him in due course of time in the light of FST judgment.

    09. No. 2064-C-III/2019:- In pursuance of judgment dated 11.07.2019 passed by Federal Service Tribunal, Lahore in Appeal No.497(L)CS/2017, Mirza Muhammad Imran Baig, Ex-Inspector, Model Customs Collectorate, Sialkot who was compulsorily retired from service vide FBR’s Notification No.1432-C-III/2017 dated 08.05.2017, is hereby re-instated into service with effect from 08.05.2017 i.e. the date of his Compulsory Retirement. The matter of back benefits for the intervening period from 08.05.2017 to date during which he remained out of service, shall depend upon final outcome of denovo proceedings to be initiated against him in due course of time in the light of FST judgment.

    10. No.2059-C-III/2019: – In pursuance of judgment dated 11.07.2019 passed by Federal Service Tribunal, Lahore in Appeal No.494(L)CS/2017, Mr. Muhammad Javed, Ex-Inspector, Model Customs Collectorate, Sialkot who was removed from service on 08.05.2017 and subsequently converted into compulsory retirement vide FBR’s Notification No.2298-C-III/2017 dated 22.08.2017, is hereby re-instated into service with effect from 08.05.2017 i.e. the date of his removal from service. The matter of back benefits for the intervening period from 08.05.2017 to date during which he remained out of service, shall depend upon final outcome of denovo proceedings to be initiated against him in due course of time in the light of FST judgment.

  • FBR defers action against traders till September 30

    FBR defers action against traders till September 30

    ISLAMABAD: Federal Board of Revenue (FBR) has decided not to take any adverse action under tax laws against traders till September 30, 2019 regarding information obtained through Computerized National Identity Card (CNIC).

    FBR Chairman Shabbar Zaidi held a meeting with all groups of traders of Pakistan on Thursday at FBR and discussed various issues about the traders.

    It has been agreed with consensus that no adverse action under the Income Tax Ordinance 2001 and Sales Tax Act, 1990 will be undertaken against the traders merely on the basis of information emanating from providing of CNIC under the Sales Tax Act, 1990 as required under the Finance Act, 2019 for traders till September 30, 2019.

    There will be discussion between the associations and bodies of the traders for the finalization of Scheme for small shopkeepers for which drafts have been furnished by various trade bodies which will be taken into consideration by the FBR.

    The condition of obtaining CNIC number for unregistered persons at the time of supplies by registered person was to applicable from August 01, 2019.

    The condition has been proposed to be applicable from July 01, 2019 through Finance Bill 2019.

    However, through Finance Act, 2019 this condition was to applicable from August 2019.

    An amendment has been introduced through Finance Bill 2019 to Section 23 of Sales Tax Act, 1990 under which it was now required specifically to mention particulars on invoices in Urdu or English language.

    Tax Invoice is also required to reflect CNIC Number of recipient in case supplies are made to unregistered person.

    The Finance Bill 2019 also proposed to require a supplier of textile yarn and fabric to mention count, denier and construction, in addition to description, on tax invoice at the time of making taxable supply.

  • Procedure issued to sanction sales tax refund claims of importers

    Procedure issued to sanction sales tax refund claims of importers

    ISLAMABAD: Federal Board of Revenue (FBR) issued procedure for sanctioning refund claims on sales tax collected against imported goods.

    The FBR issued SRO 918(I)/2019 on Thursday to amend Sales Tax Rules, 2006.

    A new rule 34A is inserted related to sanction of refund claims of import-related sales tax by the collectorates of customs.

    The FBR said that sales tax refund filed by an importer for import-related sales tax paid in excess due to inadvertence, error or misconception, or as result of a competent adjudication or appellate authority, claimed within the period as prescribed under section 66 of the Act, may be decided and allowed by the concerned officer of Customs, not below the rank of an Assistant Collector subject to sub-rules (2) and (3) below.

    (2) In the case of registered person while applying for refund to the concerned Customs Collectorate, the applicant must endorse a copy of the refund application to the Refund Division of the concerned RTO or LTU. The concerned Collectorate of Customs shall not process the claim unless a confirmation from suchInland Revenue office, that no adjustment or payment of the amount claimed in refund has been made, has been received.

    The concerned RTO or LTU on receipt of a reference from Collectorate of Customs shallcommunicate such confirmation, or otherwise, within thirty days of receipt of the reference.

    (3) In case of an unregistered importer, the refund shall be processed by the concerned Customs Collectoratewithout prior reference to RTO or LTU.

    (4) The sales tax refund files after issuance of refund payment order by the relevant Customs officer shall be sent through proper channel, in the case of registered person to the RTO or LTU concerned, and in the case of unregistered person to the nearest RTO where the customs station is located. The refund sanctioning authority of the Customs Collectorate shall mention the number and date, etc. of RTO’s or LTU’s confirmation of regarding non-adjustment of tax involved or non-payment of refund, if applicable, in his sanction order.

    (5) On receipt of such sanction order from Customs Collectorate by the concerned officer-in-charge in RTO or LTU, he shall make the entry of the sanction order in the Computerized System, and after obtaining permission of the Commissioner concerned, generate RPO of the sanctioned amount for electronic transmission to CSTRO. The amount of such sales tax refund shall be debited from the head of sales tax (on imports).

  • FBR issues procedure for zero-rated supplies to Duty Free Shops

    FBR issues procedure for zero-rated supplies to Duty Free Shops

    ISLAMABAD: Federal Board of Revenue (FBR) has issued procedure for zero-rated sales tax supply to duty free shops.

    The FBR on Thursday said that a duty free shop (DFS), duly licensed by the Customs authorities, and entitled to receive zero-rated supplies under serial No. 3 of the Fifth Schedule to the Act, for the purpose of making supplies to the passengers in terms of Customs baggage rules, may observe the following procedure for making zero-rated purchases:−

    (a) The DFS shall get itself registered under the Act, furnish monthly returns and maintain records as stipulated under the Act.

    (b) The DFS will apply to the respective Commissioner Inland Revenue for grant of authorization for taking sales tax free delivery of the goods intended to be purchased from a specified registered manufacturer. In the application DFS will exactly specify the description and quantity of goods besides particulars including sales tax registration number of the manufacturer-cum-supplier.

    Only such goods shall be included in the application as DFS intends to sell against duty free allowances under different baggage concessions.

    (c) At the time of filling application under (a) above, DFS will furnish an indemnity bond in a proper form to the effect that in case goods intended to be purchased free of sales tax are used for the purpose other than the purpose of supplying the same against duty free allowance under different baggage concessions, DFS shall pay the amount of sales tax invoiced in such goods besides additional tax payable under section 34 of Sales Tax Act, 1990.

    Original indemnity bond shall be retained under safe custody in the concerned RTO or LTU and two attested photocopies of the accepted indemnity bond shall be given to DFS and DFS shall give one copy to the concerned manufacturer.

    (d) on the basis of authorization given by the Commissioner Inland Revenue, after acceptance of the indemnity bond furnished by DFS as aforesaid, the manufacturer shall deliver the goods against a zero-rated invoice issued in the name of DFS and quote the reference number and date of authorization issued by the Commissioner Inland Revenue.

    The zero-rated invoice shall show the value of goods in rupees as well as in US dollar. The goods shall be delivered to DFS only after affixing irremovable sticker containing a caution to the effect that it is meant exclusively for supply to and sales by DFS under customs baggage rules.

    (e) DFS shall pay price of the goods in foreign currency (US dollars) which shall be surrendered by the manufacturer to the State Bank of Pakistan and manufacturer shall receive the payment in Pak rupees as per the prevailing State Bank of Pakistan’s procedures and foreign exchange regulations.

    (f) on receipt of goods DFS shall issue a certificate of receipt indicating the reference number and date of the aforesaid authorization and serial number and date of zero-rated invoice.

    This certificate shall be duly attested by the customs staff posted at duty free shops. A copy of this certificate shall be sent each to the manufacturer as well as to the Commissioner Inland Revenue.

    (g) DFS shall maintain proper separate records of the zero-rated purchases and sales of goods purchased under this rule. Full particulars of the passengers buying these goods under baggage rules shall be invariably mentioned in the records. Similarly, the manufacturer shall maintain proper record relating to the supplies made to DFS without payment of sales tax. Both DFS and the manufacturer shall present these records to the sales tax staff for inspection or audit as and when required.

    (h) the said documents shall be furnished in original with a set of photocopies and returned to the manufacturer after tallying an endorsement of verification on the photocopies by the officer-incharge of Refund Division of the Regional Tax Office (RTO).

    Refund shall be processed and sanctioned in accordance with chapter V of the Sales Tax Rules, 2006 treating the claimant as manufacturer-cum-exporter.

    (i) DFS shall procure goods under this order to meet its requirements for a period not exceeding three months and shall ensure that these goods do not find way in the local market. DFS shall be responsible to pay sales tax and additional tax in case any such goods are found being sold in the local market.

    (j) the indemnity bond furnished by DFS shall be released by the Commissioner Inland Revenue only after satisfying himself either through audit or otherwise that goods have been sold by DFS only against duty free allowances under the relevant baggage concessions.