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 issues rules for ADR in sales tax, federal excise cases

ISLAMABAD: Federal Board of Revenue (FBR) on Thursday notified rules to make Alternate Dispute Resolution Committee (ADRC) functional for cases in sales tax and federal excise.

The FBR issued SROs 488 and 489 (I)/2019 to notify the rules. The ADRC is required to decide a case within 120 days and the decision will have binding effect on both taxpayers and tax officials.

Under the rules any person interested for resolution of any dispute shall make a written application for alternative dispute resolution to the FBR.

The FBR, after examination of contents of the application and facts stated therein and on satisfaction that the application may be referred to a Committee for the resolution of the hardship or dispute, shall appoint and notify a Committee, within a period of sixty days from receipt of the application.

A retired judge not below the rank of District and Sessions Judge, appointed in a manner as aforesaid, shall be Chairperson of the Committee.

After notification of the Committee, the applicant or the Commissioner or both, as the case may be, shall withdraw appeal pending before any court of law or an appellate authority relating to the hardship or dispute stated in the application.

The Committee shall commence proceedings after receipt of order of withdrawal of appeal from the FBR.

The chairperson of the Committee shall be responsible for deciding the procedure to be followed by the Committee which may, inter-alia, include the following, namely:-

(a) to decide about the place of sitting of the Committee, in consultation with the Chief Commissioner having jurisdiction over the applicant;

(b) to specify date and time for conducting proceedings by the Committee;

(c) to supervise the proceedings of the Committee;

(d) to issue notices by courier or registered post or electronic mail to the applicant;

(e) to requisition and produce relevant records or witnesses from the Commissioner or other concerned quarters;

(f) to ensure attendance of the applicant for hearing either in person or through an advocate, representative or a tax consultant;

(g) to consolidate decision of the Committee and communicate it to the Board, the Commissioner and the applicant; and

(h) for any other matter covered under these rules.

The Committee may conduct inquiry, seek expert opinion, direct any officer of Inland Revenue or any other person to conduct an audit and make recommendations to the Committee in respect of dispute or hardship.

The Committee may determine the issue and may thereafter seek further information or data or expert opinion or make or cause to be made such inquiries or audit as it may deem fit, to decide the matter.

The Committee shall decide the dispute within one hundred and twenty days from the date of receipt of order of withdrawal from the FBR.

Decision of majority members of the Committee shall be construed decision of the Committee which shall be communicated by the Committee to the FBR, the Commissioner having jurisdiction and the applicant.

The decision of the Committee shall be binding on the Commissioner and the aggrieved person.

On receipt of the Committee’s decision, the applicant shall make payment of sales tax and other taxes as specified by the Committee in its decision and the Commissioner shall modify order as per decision of the Committee.

April 26, 2019
Tax amnesty scheme to be introduced in three phases, to continue by December 2019

ISLAMABAD: Federal Board of Revenue (FBR) has recommended three phases for new tax amnesty scheme for undeclared assets.

The FBR recommended three phases for the amnesty scheme for period ended June 30, 2019, September 30, 2019 and December 31, 2019. The rate of tax for undeclared assets (other than domestic real estate/undisclosed income has been recommended at five percent, 10 percent and 20 percent for first, second and third phase, respectively,

The amnesty scheme has been proposed to cover real estate sector at one percent, two percent and four percent for three phases at fair market value (not less than value prescribed by the FBR under section 68 of Income Tax Ordinance, 2001), as declared by the declarant.

Dr. Abdul Hafeez Shaikh, Adviser to Prime Minister on Finance, Revenue and Economic Affairs recently directed the FBR to review the proposed amnesty scheme and submit a new draft.

According to the draft the amnesty scheme would be launched through promulgation of presidential ordinance.

According to the draft the undisclosed sales shall be chargeable to tax at the rate of three percent (3 percent) of such sales in lieu of sales tax and federal excise duty.

It is proposed that any foreign asset declared under this Ordinance shall be required to be repatriated to Pakistan or invested in Pakistan Banao Certificate before filing of declaration in the manner prescribed by the State Bank of Pakistan. This condition shall not be applicable on such foreign asset which represents foreign real estate.

April 25, 2019
Withholding tax rates on imports updated through Finance Supplementary (Second Amendment) Act 2019

KARACHI: Federal Board of Revenue (FBR) issued withholding tax rates on imports for tax year 2019 updated as per Finance Supplementary (Second Amendment) Act, 2019.

The withholding tax rates updated up to March 09, 2019 on import under Section 148 of Income Tax Ordinance, 2001 as follow:

The collector of customs shall collect withholding tax from every import of goods on the value of goods at the rate of one percent from filers of the import value increased by customs – duty, sales tax and federal excise duty and at 1.5 percent from non-filers of the import value as increased by customs-duty, sales tax and federal excise duty on the value of goods, included:

1 (i) Industrial undertaking importing remeltable steel (PCT Heading 72.04) and directly reduced iron for its own use;

(ii) Persons importing potassic of Economic Coordination Committee of the Cabinet’s decision No. ECC-155/12/2004 dated the 9th December, 2004

(iii) Persons importing Urea;

(iv) Manufactures covered under Notification No. S.R.O 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O 1125(I)/2011 dated 31st December, 2011.

(v) Persons importing Gold; and

(vi) Persons importing Cotton

(vii) Persons importing LNG

— Industrial undertaking importing Plastic raw material (PCT Heading 39.01 to 39.12) for its own use.

Filer: 1.75 percent of the import value as increased by Custom-duty, sales tax and federal excise duty

2. Persons Importing Pulses

Filer: 2 percent of the import value as increased by Custom-duty, sales tax and federal excise duty

Non-filer: 3 percent of the import value as increased by custom-duty, sales tax and federal excise duty.

3. Commercial importers covered under Notification No. S.R.O 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O 1125(I)/2011 dated the 31st December, 2011

Filer: 3 percent of the import value as increased by custom-duty sales tax and federal excise duty.

Non-filer: 4.5 percent of the import value as increased by custom-duty , sales tax and federal excise duty

Commercial Importer importing Plastic raw material (PCT Heading 39.01 to 39.12) for its own use

Filer: 4.5 percent of the import value as increased by Custom-duty, sales tax and federal excise duty

3A. Persons importing coal

Filer: 4 percent

Non-filer:6 percent

4. Ship breakers on import of ship

Filer: 4.5 percent

Non-filer: 6.5 percent

5. Industrial undertakings not covered under S.No 1 to 4

Filer: 5.5 percent

Non-filer: 8 percent

6. Companies not covered under S. Nos 1 to 5

Filer: 5.5 percent

Non-filer: 8 percent

7. Persons not covered Under S.Nos 1 to 6

Filer: 6 percent

Non-filer: 9 percent

New proviso introduced through Finance Supplementary (Second Amendment) Act, 2019

On Import of Mobile Phones by any Person (individual, AOP, Company) :

C&F Value of Mobile Phone (in USD ($) ) Tax (in Rs)

1. Up to $30: Rs70

2.Exceeding $30 & up to $100: Rs. 730

3.Exceeding $100 & up to $200: Rs. 930

4.Exceeding $200 & up to $350: Rs. 970

5.Exceeding $350 & up to $500: Rs. 3,000

6.Exceeding $500: Rs. 5,200

The tax shall be final for all other than those excluded under S. 148(7)&(8)

The tax shall be adjustable for a tax year under S. 148(7) in respect of :-

a. Raw material, plant, equipment & parts by an industrial undertaking for its own use;

b. motor vehicle in CBU condition by manufacturer of motor vehicle.

c. Large import houses as defined / explained in 148(7)(d)

d. A foreign produced film imported for the purposes of screening and viewing.

April 25, 2019
Sales Tax Act 1990: One year jail for unauthorized access to FBR computerized system

KARACHI: Any persons attempted to gain unauthorized access to computerized system of Federal Board of Revenue (FBR) is liable to penalty and imprisonment up to one year.

According to updated Sales Tax Act, 1990 issued by the FBR, the person trying to get unlawful access to computerized system would face harsh action.

The law explained:

Any person who,-

(a) knowingly and without lawful authority gains access to or attempts to gain access to the computerized system; or

(b) unauthorizedly uses or discloses or publishes or otherwise disseminates information obtained from the computerized system; or

(c) falsifies any record or information stored in the computerized system; or

(d) knowingly or dishonestly damages or impairs the computerized system; or

(e) knowingly or dishonestly damages or impairs any duplicate tape or disc or other medium on which any information obtained from the computerized system is kept or stored; or

(f) unauthorizedly uses unique user identifier of any other registered user to authenticate a transmission of information to the computerized system; or

(g) fails to comply with or contravenes any of the conditions prescribed for security of unique user identifier.

“Such person shall pay a penalty of twenty-five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher.”

“He shall, further be liable, upon conviction by the Special Judge, to imprisonment for a term which may extend to one year, or with fine which may extend to an amount equal to the loss of tax involved, or with both.”

April 25, 2019
Withholding tax rate on telephone cards

KARACHI: The decision of Supreme Court of Pakistan has paved way for Federal Board of Revenue (FBR) to collect withholding tax on telephone usages under Section 236 of Income Tax Ordinance, 2001.

The apex court on Wednesday restored taxes on pay cards to use mobile phone services. The court suspended the levy of taxes on phones in June 2018.

Following are the applicable withholding tax rates on phone usages updated after Finance Supplementary (Second Amendment) Act, 2019:

a. Telephone subscribers and internet will pay zero tax on monthly bill up to Rs1,000.

However, Telephone subscribers and internet will pay 10 percent withholding tax on monthly bill up exceeding Rs1,000.

b. In the case of subscriber of internet, mobile telephone and prepaid internet or telephone card, the FBR will collect 12.50 percent of the amount of bill or sales price of internet pre-paid card of pre-paid telephone card or sale of unit through any electronic medium or what ever form.

The tax will be collected by person preparing telephone / Internet bill or issuing / selling prepared card for mobile phones / Internet from:

— Telephone Subscribers, Internet subscriber, purchaser of Internet Prepaid Cards,

— Telephone subscriber and purchaser of prepaid telephone cards

Along with payment of telephone bill or at the time of issuance of or sales of prepared cards.

April 24, 2019
FBR starts collecting withholding tax on cell phones after apex court decision

ISLAMABAD, September 14, 2024 – The Federal Board of Revenue (FBR) and provincial revenue authorities are set to resume the collection of withholding tax on mobile phone top-ups following a decision by the Supreme Court of Pakistan (SCP) on Wednesday.
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April 24, 2019
FBR suspends two customs intelligence officers

KARACHI: Federal Board of Revenue (FBR) on Wednesday suspended two officers of Customs Intelligence with immediate effect.

The following Intelligence Officers of Directorate of Intelligence & Investigation – FBR, Regional Office, Karachi have been placed under suspension in terms of Article 194 of CSR with immediate effect.

i. Mehmood Akbar.

ii. Parvaiz Ahmed Zardari

April 24, 2019
Amnesty scheme may be introduced for two months; may conclude before IMF program

ISLAMABAD: The government is reportedly planning to roll out a much-anticipated tax amnesty scheme during the last two months of the current fiscal year, with a conclusion targeted before the initiation of the International Monetary Fund (IMF) loan program.
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April 24, 2019
Sales Tax Act 1990: 5-year jail for obstructing IR officers to business premises

KARACHI: A person may be penalized up to five year imprisonment for obstructing or denying access any officer of Inland Revenue to the business premises or records.

The updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR) explained offenses and penalties.

As per Section 33 of the Sales Tax Act, 1990 following are offenses and penalties:

Any person who denies or obstructs the access of an authorized officer to the business premises, registered office or to any other place where records are kept, or otherwise refuses access to the stocks, accounts or records or fails to present the same when required under section 25, 38 38A or 40B.

Such person shall pay a penalty of twenty five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher.

“He shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to five years, or with fine which may extend to an amount equal to the loss of tax involved, or with both.”

Any person who, –

(a) submits a false or forged document to any officer of Inland revenue; or

(b) destroys, alters, mutilates or falsifies the records including a sales tax invoice; or

(c) Knowingly or fraudulently makes false statement, false declaration, false representation, false personification, gives any false information or issues or uses a document which is forged or false.

Such person shall pay a penalty of twenty five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher.

“He shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to three years, or with fine which may extend to an amount equal to the amount of tax involved, or with both.”

Any person who commits, causes to commit or attempts to commit the tax fraud, or abets or connives in commissioning of tax fraud.

Such person shall pay a penalty of twenty five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher.

“He shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to five years, or with fine which may extend to an amount equal to the loss of tax involved, or with both.”

Where any person violates any embargo placed on removal of goods in connection with recovery of tax.

Such person shall pay a penalty of twenty five thousand rupees or ten per cent of the amount of the tax involved, whichever is higher.

“He shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to one year, or with fine which may extend to amount equal to the amount of tax involved, or with both.”

April 24, 2019
Procedure to claim income tax refund

Karachi, Pakistan: The Federal Board of Revenue (FBR) has taken a significant step to streamline the process of claiming income tax refunds. In a recent announcement, the FBR has issued detailed guidelines that outline the procedures for individuals and businesses to seek refunds for excess taxes paid.
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April 24, 2019