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.

Finance Act 2019: Tax slabs for AOPs, business individuals

ISLAMABAD: Federal Board of Revenue (FBR) has notified tax rates on income derived by Association of Persons (AOPs) and business individuals during fiscal year 2019/2020.

According to the Finance Act, 2019 following are the tax slabs to be applicable on the income of AOPs and business individuals for the tax year 2020:

S. No	Taxable Income	Rate of Tax
(1)	(2)	(3)
1.	Where taxable income does not exceed Rs. 400,000	0%
2.	Where taxable income exceeds Rs. 400,000 but does not exceed Rs. 600,000	5% of the amount exceeding Rs. 400,000
3.	Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000	Rs. 10,000 plus 10% of the amount exceeding Rs. 600,000
4.	Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000	Rs. 70,000 plus 15% of the amount exceeding Rs. 1,200,000
5	Where taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000	Rs. 250,000 plus 20% of the amount exceeding Rs. 2,400,000
6	Where taxable income exceeds Rs. 3,000,000 but does not exceed Rs. 4,000,000	Rs. 370,000 plus 25% of the amount exceeding Rs. 3,000,000
7.	Where taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 6,000,000	Rs. 620,000 plus 30% of the amount exceeding Rs. 4,000,000
8.	Where taxable income exceeds Rs. 6,000,000	Rs. 1,220,000 plus 35% of the amount exceeding Rs. 6,000,000

July 2, 2019

Karachi Chamber urges FBR to adjust refunds of previous amnesty’s refunds

KARACHI: President Karachi Chamber of Commerce and Industry (KCCI) Junaid Esmail Makda, while referring to his conversation with Minster of State for Revenue Hammad Azhar and Member IR – FBR Dr. Hamid Ateeq Sarwar during meetings in Islamabad, stated that after listening to the grievances being faced by those individuals whose asset declaration cases were stuck up due to some IT glitches on last day of Amnesty Scheme 2018, the State Minister and Member IR suggested that five percent tax paid against the assets declared by such individuals can be refunded so that they could re-declare their assets in this year’s Asset Declaration Scheme.

In a statement issued on Tuesday, President KCCI pointed out that KCCI received numerous complaints about unprocessed cases of last year’s amnesty scheme in which although the individuals submitted their taxes well in time within the last date of the amnesty scheme but their cases were not processed in FBR’s portal and to date, the fate of all such cases has not be decided.

“KCCI has written numerous letters from time to time so that the issue could be resolved and the policymakers have been assuring to look into this issue but no relief has been provided so far”, he added.

He said that as the government was making all out efforts to make this year’s Asset Declaration Scheme successful, they must look into the possibility of providing relief to such individuals whose cases were not processed in last year’s Amnesty Scheme due to congestion in FBR’s portal or any other IT-related glitch.

Junaid Makda suggested that FBR should come up with a relevant notification in this regard in which they must announce refunds to such cases so that these individuals could quickly avail this year’s amnesty scheme.

He was fairly optimistic that keeping in view the government’s seriousness towards the Ease of Doing Business, the FBR would look into this matter and accordingly announce relief for such individuals as per commitment which would encourage many others to come forward to participate in this year’s Asset Declaration Scheme.

He was of the opinion that although the last date for Asset Declaration Scheme has been extended for three more days but it was not suffice and the government must extend it for at least 30 more days so that maximum number of people could avail this scheme which would prove beneficial for the national exchequer. “The business community remained heavily engaged in identifying budget anomalies, leaving a very little time to examine and look into the possibility of benefitting from Asset Declaration Scheme whose deadline has to be extended”, he added.

July 2, 2019
FBR grants general relaxation to file tax year 2018 income returns up to August 02

ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday extended the date for filing income tax returns and wealth statement for tax year 2018 up to August 02, 2019 for all persons required to file their returns under Income Tax Ordinance, 2001.

The FBR issued Circular No. 07 dated July 02, 2019 to grant extension for filing income tax returns

A day earlier the FBR issued Circular No. 06 and allowed persons, who own immovable properties and motor vehicles above engine capacity 1000CC to file their income tax returns up to August 02, 2019.

The FBR said that in continuation of Circular 06/2019 dated 01.07.2019, the other individuals/ AOPs and companies who were required to file their income tax returns/ statements for the Tax Year 2018 but have not filed, may avail the opportunity of filing of income tax return/ statement for the tax year 2018. Similarly, the individuals/ AOPs and companies who intend to revise the income tax return for the tax year 2018, may file revised income tax return/ statements till 02.08.2019.

Accordingly, in exercise of the powers conferred under Section 214A of the Income Tax Ordinance, 2001, the Federal Board of Revenue is pleased to further extend the date of filing of Income Tax Returns/ Statements for the Tax Year 2018 for individuals/ AOPs and companies up to August 02, 2019.

July 2, 2019
FBR allows immovable property, motor vehicle owners to file tax year 2018 returns up to August 02

ISLAMABAD: Federal Board of Revenue (FBR) on Monday extended the date for filing income tax return and wealth statement for tax year 2018 up to August 2, 2019 for taxpayers, who own immovable properties and motor vehicles.

The FBR issued Income Tax Circular No. 06 dated July 01, 2019 for extension in date of filing of income tax returns/ statements for tax year 2018.

The FBR said that following persons are required to furnish a return of income for tax year in terms of Section 114(1)(b)(iii) to (vi) of the Income Tax Ordinance, 2001:

(iii) Owns immovable properties with land area of two hundred and fifty square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory.

(iv) Owns immovable property with a land area of five hundred square yards or more located in a rating area;

(v) Owns a flat having covered area of two thousand square feet or more located in a rating area;

(vi) Owns a motor vehicle having engine capacity above 1000CC;

The FBR said that it is observed that some taxpayers falling under above conditions have not filed their income tax return/statement for the tax year 2018. “In order to facilitate the taxpayers falling under the above categories , they are hereby given an opportunity to file their income tax return/ statements.”

The FBR further said that in order to facilitate it has been decided to extend the date of filing of income tax return/statements for the tax year 2018 up to August 02, 2019 for taxpayers of above mentioned categories.

July 2, 2019
Baggage Rules amended: passengers arriving, departing required to file customs declaration

ISLAMABAD: Federal Board of Revenue (FBR) on Monday made mandatory the requirement of filing customs declaration for passengers, in case of accompanied baggage, at the time of arrival or departure.

The FBR issued SRO 689 (I)/2019 to implement the amendments in Baggage Rules, 2006, which have been previously published through SRO 653(I)/2019 dated June 22, 2019.

In the Baggage Rules, 2006 a new Rule 7A has been inserted, which stated: “In case of accompanied baggage, the passengers at the time of arrival or departure, shall file a customs declaration form as set out I n Appendix-C.”

Under the Appendix-C, a passenger is required to provide particulars, included: name, gender, date of birth, passport number, nationality, country coming from/going to, country going to (if in transit), names of countries visited during last seven days, purpose of visit (persona, official, business, tourism), contact person/sponsor contact number in Pakistan and address in Pakistan.

The passenger is required to make following declaration:

Are you carrying any of the following goods?
a. Prohibited / restricted goods such as Narcotics, Psychotropic substance, firearms, weapons, satellite phones etc?

b. Gold jewelry, precious / semi-precious stones

c. Foreign currency in US $ or equivalent

d. Any other declaration to be made to Customs

Passengers have been advised to inform to customs officers at the Red Channel if any of the above answer is in ‘Yes’.

July 1, 2019
FBR notifies new chapter for sales tax withholding rules

ISLAMABAD: Federal Board of Revenue (FBR) has notified a new chapter for deduction and deposit of sales tax withholding on taxable goods and services.

The rules shall apply from today or July 01, 2019.

The FBR issued SRO 698(I)/2019 to amend Sales Tax Rules, 2006 to include Chapter XIV-D regarding withholding of sales tax by recipient of supply.

Following is the text of rules notified by the FBR through the SRO.

“150ZZH. Application.— (1) This chapter shall apply to taxable goods and services as are supplied to the withholding agents as specified in the Eleventh Schedule to the Act, for the purpose of deduction and deposit of sales tax persons registered as exporters.

(2) This chapter shall also apply to services on which federal excise duty is payable in sales tax mode, and the ones specified in the Schedule to the Islamabad Capital Territory (Tax on Services) Ordinance, 2001 (XLII of 2001).

(3) Withholding agent, in case of supplies to Federal or Provincial Government departments, includes the accounting office which is responsible for making payment against the purchases made by a government department.

150ZZI. Responsibility of a withholding agent.--(1) The withholding agent, intending to make purchases of taxable goods, shall indicate in an advertisement or notice for this purpose that the sales tax to the extent as provided in this Chapter shall be deducted from the payment to be made to the supplier.

(2) A withholding agent, other than a recipient of advertisement services, shall deduct an amount as specified in the Eleventh Schedule to the Act and make payment of the balance amount to him as per illustration given below,–

ILLUSTRATION (in case 1/5th of sales tax amount is to be deducted)

Value of taxable supplies excluding sales tax: Rs. 1000

Sales tax chargeable @ 17%: Rs. 170

Sales tax to be deducted by the withholding Agent: Rs. 34 (i.e. Rs. 170 / 5)

Sales tax payable by the withholding agent to the supplier: Rs. 136 (i.e. Rs. 170-Rs.34)

Balance amount payable to the supplier by the withholding agent: Rs. 1136 (i.e. Rs. 1000 + Rs.136)

Provided that the withholding agent shall not be entitled to reclaim or deduct the amount of tax withheld from such persons as input tax.

(3) A person who receives advertisement services, in case the sales tax amount is not indicated on the invoice received, he shall deduct sales tax at the applicable rate of the value of taxable services from the payment due to the service provider.

(4) Where the purchases are made by a government department, the following procedure shall be observed, namely:–

(a) the Drawing and Disbursing Officer (DDO) preparing the bill for the accounting office shall indicate the amount of sales tax withheld as illustrated above. The accounting office shall adopt the procedure as indicated below:

(i) in case of purchases made by a department under the Federal Government, the office of the Accountant General of Pakistan Revenue shall account for the amount deducted at source during a month under the Head of Account “B02341-Sales Tax” and send an intimation to the Chief Commissioner, Regional Tax Office, Islamabad, by the 15th of the following month;

(ii) in case of purchases by departments under provincial or district governments, the Accountant General of the province or the District Accounts Officer, as the case may be, shall credit the amount deducted at source during a month to the head of account “GI2777-Sales Tax Deductions at Source under rule 40 & 40A of Chapter Miscellaneous of Sales Tax (Withholding) Rules, 2007”. Cheque for the amount will be prepared by the Accountant General or the District Accounts Officer, as the case may be, in the name of Commissioner having jurisdiction by debit to the aforesaid head of account and sent to the Commissioner by the 15th of the following month; and

(iii) where the purchases are made by the departments falling in purview of Military Accountant General, the MAG shall account for the amount deducted at source during a month under the Head of Account “B0234l-Sales Tax” and send intimation to the Chief Commissioner, Regional Tax Office, Rawalpindi, by the 15th of the following month. The amount so deducted at source shall be reported by MAG office to AGPR through civil exchange accounts; and

(b) the concerned Drawing and Disbursement Officer shall prepare the return in the form as set out in STR-28 for each month and forward the same to the Commissioner having jurisdiction by the 15th of the following month.

(5) In case of purchases, not covered by sub-rule (4) or sub-rule (6), the sales tax deducted at source shall be deposited by the withholding agent in the designated branch of National Bank of Pakistan under relevant head of account on sales tax return-cum-payment challan by 15th of the month following the month during which the purchase has been made. The return-cum-payment challan shall be prepared and deposited with the bank in triplicate and the bank shall send the original to the Commissioner of Sales Tax having jurisdiction, return the duplicate to the depositor and retain the triplicate for its own record:

Provided that a single return-cum-challan can be filed in respect of all purchases for which the payment has been made in a month.

(6) In case the withholding agent is also registered under the Sales Tax Act, 1990, or the Federal Excise Act, 2005, he shall deposit the withheld amount of sales tax along with return filed for the month in which the purchase was made in the manner as provided in Chapter II, along with other tax liability:

Provided that in case the withholding agent is not registered for sales tax or federal excise duty but holds a national tax number assigned under the Income Tax Ordinance, 2001 (XLIX of 2001), he shall file the return, as set out in STR-28, electronically and deposit the amount deducted at source in the manner as provided for persons filing returns electronically under rule 18:

Provided further that any other withholding agent may also opt to file the prescribed return electronically and deposit the deducted amount in the manner as provided in this sub-rule.

(7) The withholding agent shall furnish to the Commissioner of Sales Tax having jurisdiction all such information or data as may be requested by him for carrying out the purposes of these rules.

(8) A certificate showing deduction of sales tax shall be issued to the supplier by the withholding agent duly specifying the name and registration number of supplier, description of goods and the amount of sales tax deducted.

150ZZJ. Responsibility of the registered supplier.— (I) The registered supplier shall issue sales tax invoice as stipulated in section 23 of the Sales Tax Act, 1990, in respect of every taxable supply made to a withholding agent.

(2) The registered supplier shall file monthly return as prescribed in Chapter II, taking due credit of the sales tax deducted by the withholding agent, in the manner as prescribed in the return.

150ZZK. Responsibility of the Commissioner.—(1) The Commissioner shall keep a list of all withholding agents falling in his jurisdiction and monitor payment of tax deducted by withholding agents falling in his jurisdiction and shall also ensure that the return prescribed under these rules is filed.

(2) The Commissioner shall ensure that the return received from the bank is duly fed in the computerized system as referred to in clause (5AA) of section 2 of the Sales Tax Act, 1990.

(3) The Commissioner shall periodically ensure that the suppliers mentioned in the return filed by the withholding agents, as fall under his jurisdiction, are filing returns under Chapter II, and are duly declaring the supplies made to withholding agents.

150ZZL. Exclusions.-The provisions of this Chapter shall not apply to the supplies
of the following goods and services if made by a registered person, namely:-

(i) electrical energy;

(ii) natural gas;

(iii) petroleum products as supplied by petroleum production and exploration companies, oil refineries, oil marketing companies and dealers of motor spirit and high speed diesel];

(iv) telecommunication services;

(v) goods specified in the Third Schedule to the Sales Tax Act, 1990 (VII of 1990), and the goods on which federal excise duty is payable in sales tax mode on the basis of retail price;

(vi) supplies made by commercial importers who paid value addition tax on such goods at the time of import as prescribed under Twelfth Schedule to the Act, and

(vii) Supplies made by an active taxpayer as defined in the Sales Tax Act, 1990 to another registered person with the exception of advertisement services.”

This Notification shall take effect on and from the 1st day of July, 2019.

July 1, 2019
FBR amends sales tax rules to implement automated registration system

ISLAMABAD: Federal Board of Revenue (FBR) has amended Sales Tax Rules 2006 to implement automated sales tax registration system.

The FBR issued SRO 698(I)/2019 to amend Rule 5 of Sales Tax Rules, 2016. The amendment has been made in Rule 5 for sub-rule (2) to (9), the following shall be substituted, namely:

“(2) The applicant having NTN or income tax registration shall, using his login credentials, upload following information and documents-

(a) bank account certificate issued by the bank in the name of the business;

(b) registration or consumer number with the gas and electricity supplier;

(c) particulars of all branches in case of multiple branches at various locations;

(d) GPS-tagged photographs of the business premises; and

(e) in case of manufacturer, also the GPS-tagged photographs of machinery and industrial electricity or gas meter installed.

(3) On furnishing above documents, the system shall register the applicant for sales tax.

(4) After registration, the applicant or his authorized person shall visit e-Sahulat Centre of NADRA within a month for bio-metric verification. In case of failure to visit or failure of verification, the registered person’s name shall be taken off the sales tax Active Taxpayer List.

(5) In case of manufacturer, the Board may require post-verification through field offices or a third party authorized by the Board.

In case, the field office, during scrutiny after the registration, finds that any document provided is non-genuine or fake or wrong, it may request through the system, to provide the missing document, in fifteen days, failing which the registered person shall be taken off from the sales Active Taxpayer List, subject to approval of the Member (IR-Operations), FBR.”

The automated sales tax registration will be applicable from July 01, 2019.

June 30, 2019
IR officers posted to initiate proceedings in Benami cases

ISLAMABAD: Federal Board of Revenue (FBR) has notified the names of members for adjudicating authorities under Benami law and posted officers of Inland Revenue to initiated proceedings in Benami cases.

The following officers have been notified for the adjudicating authority under Benami Transactions (Prohibition) Act, 2017.

1. Jamil Ahmad (Retired PAS/BS-22), Chairperson

2. Muhammad Tanvir Akhtar (Retired IRS/BS-21), Member

3. Khaqan Murtaza (PAS/BS-21), Member

The FBR also transferred and posted following officer of Inland Revenue Service (IRS) to Benami Zones (I, II & III) established under Benami Transactions (Prohibition Act) 2017 are made with immediate effect and until further orders:

1. Hassan Zulfiqar (IRS/BS-20) has been transferred from the post of Commissioner-IR (Appeals-I), Islamabad and posted as Commissioner-IR/ Approving Authority (Benami Zone-I)

2. Muhammad Fiaz Hussain (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR, RTO, Islamabad and posted as Deputy Commissioner-IR/ Initiating Officer (Benami Zone-I)

3. Hasham Khalid Malik (IRS/BS-17) has been transferred from the post of Assistant Commissioner-IR RTO, Islamabad and posted as Assistant Commissioner-IR/ Administrator (Benami Zone-I)

4. Khalid Khan (IRS/BS-20) has been transferred from the post of Commissioner-IR (Zone-I), Corporate RTO, Lahore and posted as Commissioner-IR/ Approving Authority (Benami Zone-II)

5. Salman Naveed (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR (BTB Zone), RTO-II, Lahore and posted as Deputy Commissioner-IR/ Initiating Officer (Benami Zone-II)

6. Asim Raza (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR (BTB Zone), RTO-II, Lahore and posted as Deputy Commissioner-IR/ Initiating Officer (Benami Zone-II)

7. Rudar Amjad (IRS/BS-17) has been transferred from the post of Assistant Commissioner-IR, Corporate RTO, Lahore and posted as Assistant Commissioner-IR/ Administrator (Benami Zone-II)

8. Syed Shakil Ahmad (IRS/BS-20) has been transferred from the post of Commissioner-IR (Zone-II), LTU-II, Karachi and posted as Commissioner-IR/ Approving Authority (Benami Zone-III)

9. Syed Bilal Mahmood Jafri (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR (BTB Zone), RTO-II, Karachi and posted as Deputy Commissioner-IR/ Initiating Officer (Benami Zone-III)

10. Syed Mashkoor Ali (IRS/BS-18) has been transferred from the post of Deputy Commissioner-IR (BTB Zone), RTO-II, Karachi and posted as Deputy Commissioner-IR/
Initiating Officer (Benami Zone-III)

11. Razi Ul Haq Qureshi (IRS/BS-17) has been transferred from the post of Assistant Commissioner-IR, RTO-III, Karachi and posted as Assistant Commissioner-IR/Administrator (Benami Zone-III)

The FBR said that the officers, who are drawing performance allowance prior to the issuance of this notification, shall continue to draw the said allowance on their upgraded posts.

Related Stories

FBR notifies adjudicating authorities for Benami cases

June 30, 2019
FBR issues uniform 17pc sales tax rates for petroleum products

ISLAMABAD: Federal Board of Revenue (FBR) on Sunday issued uniformed sales tax rates for petroleum products effective from July 01, 2019.

To implement the sales tax rates for petroleum products from July 01, 2019 the FBR issued SRO 700(I)/2019 on Sunday.

In the earlier SRO 602(I)/2019 dated May 31, 2019, the FBR fixed the sales tax rate included: petrol 13 percent; high speed diesel oil, 13 percent; kerosene oil 17 percent; and light diesel oil at 17 percent.

The FBR sources said that the sales tax rates have been increased on the two major products including petrol and high speed diesel oil, which are main revenue spinner.

The FBR has been given Rs5,550 billion target for fiscal year 2019/2020, which is apparently an impossible target on the back of weak economic conditions and lower manufacturing output.

June 30, 2019
FBR notifies adjudicating authorities for Benami cases

ISLAMABAD: Federal Board of Revenue (FBR) has notified adjudication authorities for Benami cases with immediate effect. The adjudication authorities have been set up at Karachi, Lahore and Islamabad.

The FBR issued a notification on Saturday stating that consequent upon approval of the federal government and in pursuance of Section 6 of Benami Transactions (Prohibition Act) 2017, adjudication authorities are hereby established and notified at Karachi, Lahore and Islamabad with immediate effect.

Section 6 of the Benami Transactions (Prohibition Act) 2017 explained the adjudicating authority as:

01. The federal government shall, by notification, in the official gazette, appoint one or more adjudicating authorities to exercise jurisdiction, powers and authority conferred by or under this Act.

02. Adjudicating authority shall consist of a chairperson and at least two other members.

03. A person shall not be qualified for appointment as the chairperson or a member of the adjudicating authority, unless that person:

a. is or has been a member of the Inland Revenue Service and has held the post of Chief Commissioner Inland Revenue or equivalent post in that service; or

b. is or has been a member of any federal service and has held the post of additional secretary or equivalent post in that service.

The chairperson and the other members of the adjudicating authority shall be appointed by the federal government in such a manner as may be prescribed.

The federal government shall appoint the senior most member to be the chairperson of the adjudicating authority.

June 30, 2019