The federal government has appointed Shabbar Zaidi as the Chairman of the Federal Board of Revenue (FBR). This significant announcement, made by Prime Minister Imran Khan during a media interaction on Monday, marks a departure from tradition as Zaidi becomes the first chairman selected from the private sector.
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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.
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Withholding tax rates on payment for goods and services during Tax Year 2019
KARACHI: Federal Board of Revenue (FBR) has updated withholding tax card for tax year 2019 amendment through Finance Supplementary (Second Amendment) Act, 2019.
Following are the withholding tax rates applicable on payment for goods and services under Section 153 of Income Tax Ordinance, 2001.
Under this section every withholding agent prescribed under the ordinance shall collect withholding tax from resident person, and permanent establishment in Pakistan of a non-resident at the time the amount is actually paid.
The withholding tax rates under Section 153(I)(a):
For sale of rice, cotton seed oil and edible oil the tax rate shall be 1.5 percent of gross amount.
Supply made by distributors of fast moving consumer goods shall be 2 percent of gross amount in case of company and 2.5 percent of gross amount in case of other than company.
For sale of any other goods:
(i) in the case of company the filer of income tax return shall pay 4 percent and the rate of withholding tax shall be 8 percent for non-filer.
(ii) In the case of other than companies the tax rate for filer shall be 4.5 percent and 9 percent for non-filer.
The FBR said that no deduction of tax where payment is less than Rs75,000 in aggregate during a financial year.
The withholding tax rate for transport services under Section 153(1)(b) shall be two percent.
All others under the section shall be:
(i) in the case of companies the filer shall pay 8 percent and 14.5 percent for non-filer.
(ii) in all other than company taxpayers the withholding tax shall be 10 percent for filer and 17.5 percent for non-filer.
(iii) Person making payment to electronic and print media for advertising services: filer shall pay 1.5 percent; non-filer shall pay 12 percent; and non-filer other than company shall pay 15 percent.
The FBR said that no deduction of tax where payment is less than Rs30,000 in aggregated during a financial year.
The rate of withholding tax on execution of contracts under Section 153(1)(c) shall be:
(i) in case of sportsperson the rate shall be 10 percent
(ii) in the case of companies the withholding tax rate for filers shall be 7 percent and 14 percent for non-filers.
(iii) In the case of other than companies the rte of withholding tax shall be 7.5 percent for filers and 15 percent for non-filers.
Every exporters or export house shall deduct tax on payments in respect of services of stitching, dying, printing etc. received or provided under Section 153(2) the withholding tax rate shall be one percent. -
Sales Tax Act 1990: No suit shall lie against government servant
KARACHI: The sales tax law had explained that no suit, prosecution or other legal proceeding shall lie against the federal government or against any public servant in respect of any order passed in good faith.
The updated Sales Tax Act, 1990 issued by the Federal Board of Revenue (FBR) explained the bar of suits, prosecution and other legal proceedings under this act.
Section 51: Bar of suits, prosecution and other legal proceedings
Sub-Section (1): No suit shall be brought in any Civil Court to set aside or modify any order passed, any assessment made, any tax levied, any penalty imposed or collection of any tax made under this Act.
Sub-Section (2): No suit, prosecution or other legal proceeding shall lie against the Federal Government or against any public servant in respect of any order passed in good faith under this Act.
Sub-Section (3): Notwithstanding anything in any other law for the time being in force, no investigation or inquiry shall be undertaken or initiated by any governmental agency against any officer or official for anything done in his official capacity under this Act, rules, instructions or direction made or issued thereunder without the prior approval of the Board.
Section 52: Appearance by authorized representative
A registered person required to appear before the Appellate Tribunal or an officer of 2[Inland Revenue] in connection with any proceedings under this Act may, in writing, authorize any person having such qualification as may be prescribed to represent him or appear on his behalf.
Section 52A: e-intermediaries to be appointed
Sub-Section (1): Subject to such conditions, limitations and restrictions, the Board may, by a notification in the official Gazette, appoint a person to electronically file return under Chapter V and such other documents electronically, as may be prescribed from time to time, on behalf of a person registered under section 14.
Sub-Section (2): A person registered under section 14 may authorize an e-intermediary to electronically file return or any other documents, as specified in sub-section (1).
Sub-Section (3): The return or such other documents filed by an e-intermediary on behalf of a registered person shall be deemed to have been filed by that registered person.
Sub-Section (4): Where this Act requires anything to be done by the registered person and if such thing is done by an e-intermediary authorized by the registered person under sub-section (2), unless the contrary is proved, shall be deemed to have been done with the knowledge and consent of such registered person so that in any proceedings under this Act, the registered person shall be liable as if the thing has been done by him.
Sub-Section (5): Where an e-intermediary, authorized by a registered person under sub-section (2) to act on his behalf, knowingly or willfully submits a false or incorrect information or document or declaration with an intent to avoid payment of tax due or any part thereof or claiming a tax credit or a refund that is not due to the registered person, such e-intermediary shall be jointly and severally responsible for recovery of the amount of tax short paid or the amount refunded in excess as a result of such incorrect or false information or document or declaration, without prejudice to any other action that may be taken against him under the relevant provisions of the law.
Sub-Section (6): The Board may, by notification in the official Gazette, prescribe rules for the conduct and transaction of business of e- intermediaries, including their appointment, suspension and cancellation of appointment, subject to such conditions as specified therein.
Section 53: Estate of deceased person
The tax liability of a deceased registered person under the Act shall be the first charge on his estate in the hands of his successors.
Section 54: Estate in bankruptcy
Sub-Section (1): If a registered person is declared bankrupt, the tax liability under this Act shall pass on to the estate in bankruptcy if it continues to operate the business.
Sub-Section (2): If tax liability is incurred by an estate in bankruptcy, the tax is deemed to be a current expenditure in the operations of the estate in bankruptcy and shall be paid before the claims preferred by other creditors are settled.
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FBR provisionally revokes sales tax registration suspension of Hascol Petroleum
KARACHI: Federal Board of Revenue (FBR) has provisionally revoked the suspension of sales tax registration of M/s. Hascol Petroleum Limited on directives issued by Sindh High Court.
A communication sent to Pakistan Stock Exchange (PSX) said that the company had filed a constitution petition before the Sindh High Court against the FBR challenging the order issued by Large Taxpayers Unit (LTU) Karachi for suspension of sales tax registration of the company.
“Upon directors of the Sindh High Court, the commissioner Inland Revenue, FBR has by order May 03, 2019 provisionally revoked the suspension of the sales tax registration of the company with immediate effect,” the company said, adding that consequently the sales tax registration of the company is operative and effective as of date.
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Sales Tax Act 1990: ownership transfer of taxable activity
KARACHI: The sales tax law has explained application of sales tax on taxable activity or transfer of ownership.
According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR) the law explained the sales of taxable activity or transfer of ownership.
Section 49: Sales of taxable activity or transfer of ownership
Sub-Section (1): In case of termination of taxable activity or part thereof or its sale or transfer of ownership to a non-registered person, the possession of taxable goods or part thereof by the registered person shall be deemed to be a taxable supply and the registered person shall be required to account for and pay the tax on the taxable goods held by him:
Provided that if the tax payable by such registered person remains unpaid, the amount of unpaid tax shall be the first charge on the assets of the business and shall be payable by the transferee of business.
(2) In the case of sale or transfer of ownership of a taxable activity or part thereof to another registered person as an ongoing concern, the taxable goods or part thereof shall be transferred to the new owner through a zero-rated invoice and the sales tax chargeable thereon shall be accounted for and paid by the registered person to whom such taxable activity or part thereof is transferred.
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FBR notifies sales tax rates on petroleum products for May 2019
ISLAMABAD: Federal Board of Revenue (FBR) on Saturday notified sales tax rates for petroleum products for the month of May 2019.
The FBR issued SRO 507(I)/2019 on May 04, 2019 to amend the rates issued on April 30 and also amend the SRO 57(I)/2016 dated January 29, 2016.
Following sales tax rates on petroleum products will be applicable for the month of May 2019:
Petrol 12 percent ad valorem
High Speed Diesel oil 17 percent ad valorem
Kerosene 17 percent ad valorem
Light Diesel Oil 17 percent ad valorem
Earlier, the FBR issued SRO 499(I)/2019 issued on April 30, 2019 and reduced temporarily till May 05 at the rates: petrol 2 percent, HSD 13 percent, kerosene 8 percent and light diesel oil 9 percent.
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Withholding tax rates on purchase, registration of motor vehicle for Tax Year 2019
KARACHI: Federal Board of Revenue (FBR) has issued updated withholding tax rates on purchase and registration of motor vehicles.
The withholding tax rates have been updated through Finance Supplementary (Second Amendment) Act, 2019 as on March 09, 2019.
The withholding tax rate on registration of motor vehicle to be collected by excise and taxation department of provincial government under Sub-Section 1 of Section 231B of Income Tax Ordinance, 2001:
Registration of Motor Vehicle Filer Non-Filer Up to 850CC Rs7,500 Rs15,000 851CC to 1000CC Rs15,000 Rs37,500 1001CC to 1300CC Rs25,000 Rs60,000 1301CC to 1600CC Rs50,000 Rs150,000 1601CC to 1800CC Rs75,000 Rs225,000 1801CC to 2000CC Rs100,000 Rs300,000 2001CC to 2500CC Rs150,000 Rs450,000 2501CC to 3000CC Rs200,000 Rs600,000 Above 3000CC Rs250,000 Rs675,000
Every leasing company or a scheduled bank or a non-banking financial institution or an investment bank or a modaraba or a development finance institution, whether shariah compliant or under conventional mode, at the time of leasing of a motor vehicle to a non-filer, either through ijara or otherwise, shall collect advance tax at the rate of four per cent of the value of the motor vehicle under Sub-Section 1A of Section 231B of Income Tax Ordinance.Every motor vehicle registering authority of Excise and Taxation Department shall collect advance tax at the time of transfer of registration or ownership of a private motor vehicle, at the following rates under Sub-Section 2 Section 231B of Income Tax Ordinance, 2001:
Engine Capacity Tax for Filer Tax for Non-Filer Up to 850CC Rs 0 Rs5,000 851CC to 1000CC Rs5,000 Rs15,000 1001CC to 1300CC Rs7,500 Rs25,000 1301CC to 1600CC Rs12,500 Rs65,000 1601CC to 1800CC Rs18,750 Rs100,000 1801CC to 2000CC Rs25,000 Rs135,000 2001CC to 2500CC Rs37,500 Rs200,000 2501CC to 3000CC Rs50,000 Rs270,000 Above 3000CC Rs62,500 Rs300,000
Provided that no collection of advance tax under this sub-section shall be made on transfer of vehicle after five year from the date of first registration in Pakistan.Every manufacturer of a motor vehicle shall collect, at the time of sale of a motor car or jeep, advance tax at the following rates under Sub-Section 3 of Section 231B of Income Tax Ordinance, 2001 from the person to whom such sale is made:
Engine Capacity Tax for Filer Tax for Non-filer Up to 850CC Rs7,500 Rs15,000 851CC to 1000CC Rs15,000 Rs37,500 1001CC to 1300CC Rs25,000 Rs60,000 1301CC to 1600CC Rs50,000 Rs150,000 1601CC to 1800CC Rs75,000 Rs225,000 1801CC to 2000CC Rs100,000 Rs300,000 2001CC to 2500CC Rs150,000 Rs450,000 2501CC to 3000CC Rs200,000 Rs600,000 Above 3000CC Rs250,000 Rs675,000 -
FBR imposes ban on transfers and postings
ISLAMABAD: Federal Board of Revenue (FBR) on Friday imposed ban on postings and transfers with immediate effect till June 30, 2019.
The FBR said that the revenue collection had entered the last quarter of the current fiscal year and preparation of federal budget for the year 2019/2020 was in full swing.
Therefore, it has been decided that no further transfer/posting of officers/officials in the field formation of FBR would be made till June 30, 2019.
The FBR further said that in the cases of hardship or of extreme necessity, the concerned heads of the field formations would be requested to seek board’s prior approval for such transfers/postings.
The notification has been sent to all heads of field formations of Inland Revenue Service and Pakistan Customs Service.
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FBR updates procedure for mobile device registration
ISLAMABAD: Device Identification Registration and Blocking System (DIRBS) is a system designed to identify non-compliant devices operating on local mobile networks.
It automatically registers compliant devices operating on the mobile networks and eventually blocks non-compliant devices, according to Federal Board of Revenue (FBR).
DIRBS has been launched from December, 2018.
International passengers and Importers are requested to view the following information to confirm the correct procedure for registration of mobile devices.
The FBR said that for further information on the matter kindly visit: Device Verification System – PTA
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FBR penalizes two BS-18 officers for inefficiency, misconduct
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday imposed penalty upon two officers of Inland Revenue Service (IRS) for inefficiency and misconduct.
In two different notices issued by the FBR the penalty has been imposed on the officers of BS-18.
Case 01:
Disciplinary proceedings were initiated against Asad Munir Malik (IRS/BS-18), on recommendations of CCIR, LTU, Lahore vide letter dated 30.03.2016 on account of his unauthorized absence from duty w.e.f. 07.08.2015.
In the meanwhile, Asad Munir Malik (IRS/BS-18) was transferred from LTU, Lahore to RTO-II, Lahore vide Board’s Notification No.0056-IR-I/2016 dated 08.01.2016.
Vide Board’s letter dated 28.04.2016, CCIR, RTO-II, Lahore was requested to inform whether the officer joined his new place of posting or otherwise. CCIR, RTO-II, Lahore vide letter dated 26.04.2016 informed that the officer has not joined duty at RTO-II, Lahore and requested for initiation of disciplinary action against the officer.
The officer was issued Charge Sheet and Statement of Allegations vide letter dated 20.05.2016 and Jehangir Ahmad, the then Commissioner-IR, RTO-II, Lahore was appointed as Inquiry Officer to conduct inquiry on account of acts of omission and commission by the accused officer constituting “Misconduct”.
Whereas, the inquiry officer submitted inquiry report on 18.09.2018, according to which the charge of “Misconduct” was established against the accused officer.
On the basis of inquiry report, the accused officer was issued Show Cause Notice on 26.02.2019. In response to Show Cause Notice, the accused officer vide letter dated 13.03.2019 requested for opportunity of personal hearing before the Authorized Officer i.e. Member (Admn) which was granted for personal hearing on 23.04.2019.
Having gone through the relevant record, report of inquiry officer and verbal explanation during the course of personal hearing of the accused officer, the Authorized Officer opined that although the charges of “Misconduct” leveled against Asad Munir Malik (IRS/BS-18) stood established and found the officer guilty of the said charge.
However, taking into consideration the domestic issues that officer was facing due to illness of his son and could not attend office and because of indecision by LTU, Lahore on the leave application of the officer, the Authorized Officer, therefore, imposed minor penalty of “Withholding of One (01) Annual Increment without cumulative effect falling on December, 2019” as laid down in Rule 4(1)(a)(ii) of the Government Servant (E&D) Rules, 1973 upon Asad Munir Malik (IRS/BS-18), DCIR, RTO-II, Lahore.
Performance Allowance in respect of Asad Munir Malik (IRS/BS-18) shall be stopped for six months from the date of award of the above minor penalty as provided in Para 7(ii) of the Performance Allowance Guidelines, 2015 and he shall have to appear afresh for restoration of the same.
On conclusion of the proceedings, period of unauthorized absence from duty w.e.f. 07.08.2015 to 02.05.2019 shall be treated as leave of kind due as admissible under the rules.
Asad Munir Malik (IRS/BS-18), Deputy Commissioner-IR, Regional Tax Office-II, Lahore shall have the right to appeal to the Appellate Authority under Civil Servants (Appeals) Rules, 1977 as provided under the relevant Rules.
Case 02:
Disciplinary proceedings were initiated against Muhammad Faisal Chaudhary (IRS/BS-18) on account of “Inefficiency”, “Misconduct” and “Corruption” vide Charge Sheet and Statement of Allegations dated 22.04.2016 and Naveed Ahmed Nawab, the then Commissioner-IR, CRTO, Lahore was appointed as Inquiry Officer to conduct inquiry on account of acts of omission and commission by the accused officer constituting “Inefficiency”, “Misconduct” and “Corruption”.
Whereas, the inquiry officer submitted inquiry report on 20.10.2016. Later on fresh allegations against the officer, on account of unauthorized absence from duty w.e.f 01.10.2016 to 31.10.2016, were raised by the then Chief Commissioner-IR, RTO, Faisalabad vide letter dated 03.11.2016. Therefore, Denovo Inquiry was initiated vide Charge Sheet and Statement of Allegations dated 06.02.2017 and Mr. Muhammad Akram Khan, the then, Chief Commissioner-IR, RTO, Faisalabad was appointed as Inquiry Officer. The inquiry officer submitted inquiry report on 20.09.2017.
Member (Administration), being Authorized Officer perused the record and found that Inquiry Officer placed reliance upon the first inquiry dated 16.02.2015 and notification dated 15.07.2015 and ignored the fact that in first inquiry period of absence was different than the period of absence mentioned in Inquiry dated 22.04.2016 and Denovo Inquiry dated 06.02.2017.
Therefore, the accused officer was issued Show Cause Notice on 14.03.2019. In response, the accused officer submitted his reply to the Show Cause Notice vide letter dated 27.03.2019.
The opportunity of personal hearing before the Authorized Officer i.e. Member (Admn) was granted to the accused officer on 29.04.2019.
Having gone through the relevant record, report of inquiry officer and verbal explanation during the course of personal hearing of the accused officer, the Authorized Officer opined that the charges of “Inefficiency” & “Misconduct” leveled against Muhammad Faisal Chaudhary (IRS/BS-18) stand established on account of unauthorized absence w.e.f 01.10.2016 to 31.10.2016 whereas, the charge of corruption was not proved vide inquiry report dated 20.10.2016 and Denovo inquiry report taking a lenient view of the situation, the Authorized Officer imposed minor penalty of “Censure” as laid down in Rule 4(1)(a)(i) of the Government Servant (E&D) Rules, 1973 upon Muhammad Faisal Chaudhary (IRS/BS-18), Deputy Commissioner-IR, Regional Tax Office-II, Lahore.
Performance Allowance in respect of Muhammad Faisal Chaudhary (IRS/BS-18), shall be stopped for six months from the date of award of the above minor penalty as provided in Para 7(ii) of the Performance Allowance Guidelines, 2015 and he shall have to appear afresh for restoration of the same. On conclusion of the proceedings, period of unauthorized absence from duty w.e.f 01.10.2016 to 31.10.2016 shall be treated as leave of kind due as admissible under the rules.
Muhammad Faisal Chaudhary (IRS/BS-18), Deputy Commissioner-IR, Regional Tax Office-II, Lahore shall have the right to appeal to the Appellate Authority under Civil Servants (Appeals) Rules, 1977 as provided under the relevant Rules.