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Tag: Finance (Supplementary) Act 2022

  • FBR explains amendments to Customs Act 1969

    FBR explains amendments to Customs Act 1969

    ISLAMABAD: The Federal Board of Revenue (FBR) has issued explanation of amendments in the Customs Act, 1969 made through Finance (Supplementary) Act, 2022.

    The FBR issued Customs Circular No. 01 of 2022 to explain the changes.

    Power to determine the customs value:

    Under Section 25A of the Customs Act, 1969, both the Collector of Customs and the Director Valuation were authorized to determine the Customs Value of imported or exported goods on his own motion or on a reference made to him by any person after following the methods laid down in Section 25 of the Customs Act 1969. However, in order to being uniformity, the role of Collector of Customs has been omitted and now the powers under section 25A have been entrusted with the respective Director of Customs Valuation to bring standardization in the process of fixation of values of goods.

    READ MORE: PTBA demands date extension for filing sales tax return

    Review of the value determined:

    The post of Member Customs (Policy) and the Director General of Customs Valuation are both administrative in nature. Therefore, on the principle of natural justice, amendment has been made in section 25D so that appeal against the decision of DG valuation should not lie before the Member Customs (Policy) and should be taken up at judicial fora to redress the grievances.

    READ MORE: All shopkeepers to install POS machines: CTO Chief

    Checking of goods declaration by the Customs:

    Limiting the checking of goods declaration within three years of its clearance under Sub-section (1) of Section 83 of the Customs Act, 1969 is uncalled for as the time limit aspect has already been dealt under Section 32 of the Customs Act, 1969. Accordingly, section 80 has been amended.

    Provisional determination of liability:

    Corporate guarantee is the instrument in which the guarantor is the entity or the individual submitting the guarantee whereas in case of bank guarantee or pay order the issuing bank is the guarantor. In order to secure government revenue “Corporate Guarantee” has been omitted from section 81 of the Customs Act, 1969, retaining only bank guarantee and pay order for the purpose.

    READ MORE: FBR notifies transfers of BS-17-19 customs officers

    Appeals to the Appellate Tribunal:

    The powers of Member (Customs Policy) with regard to hearing of appeals against the decision/order of DG valuation has been withdrawn. Now, instead of filing appeal before the Member Customs (Policy) against the order/decision of DG Valuation, Section 194A has been amended so that the aggrieved party may file appeal before the Appellate Tribunal.

    Reference to High Court

    The amendment in this section 196 is the consequential effect of the amendment proposed in Section 25D of the Customs Act, 1969, whereby the powers of Member (Customs Policy) with regard to hearing of appeals against the decision/order of DG valuation have been omitted/withdrawn.

    READ MORE: FBR posts 30% growth to collect Rs3.35 trillion

  • DG Customs Valuation powers strengthened

    DG Customs Valuation powers strengthened

    ISLAMABAD: The powers of Director General Customs Valuation have been strengthened through amendments made through Finance (Supplementary) Act, 2022.

    The powers of Customs Collector to determine customs valuation have been withdrawn through Finance (Supplementary) Act, 2022.

    Sources in Federal Board of Revenue (FBR) on Tuesday said that through the Finance (Supplementary) Act, 2022 amendment had been made in Section 25A of the Customs Act, 1969.

    READ MORE: Tax imposed to protect domestic entertainment industry

    Prior to the amendment the power to determine the customs value was with the collector of customs and the director of customs valuation.

    The collector of customs was given power to determine the valuation through Finance Act, 2021. However, after only six months the legislators had abolished the power of customs collector.

    Following the latest amendment the power to determine the customs valuation is now with the Director General of Valuation.

    READ MORE: FBR slaps sales tax at 17% on supply of food stuff

    Another important amendment has been made to Section 25D of the Customs Act, 1969 through Finance (Supplementary) Act, 2022. Prior to the amendment, the Section 25D allowed an aggrieved person to file an appeal before the Member Customs (Policy) against the value determine by the Director General Valuation.

    READ MORE; FBR enhances tax rates on motor vehicle registration

    Through the Finance (Supplementary) Act, 2022, the proviso in the Section 25D has been omitted so that appeal against the decision of Director General Valuation should not be filed before the Member Customs (Policy) and should be taken up at an appropriate judicial forum to redress the grievances.

    The supplementary act further provided that an order passed in revision by the Director General Customs Valuation under section 25D, provided that such appeal shall be heard by a special bench consisting of one technical member and one judicial member.

    READ MORE: FBR increases income tax to 15% on cellular services

  • Tax imposed to protect domestic entertainment industry

    Tax imposed to protect domestic entertainment industry

    The Federal Board of Revenue (FBR) has introduced taxes on foreign-produced TV dramas and advertisements as part of its efforts to safeguard and promote the domestic media industry.

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  • FBR slaps sales tax at 17% on supply of food stuff

    FBR slaps sales tax at 17% on supply of food stuff

    The Federal Board of Revenue (FBR) has instituted a significant change in the tax structure for the supply of food items by restaurants, bakeries, caterers, and sweetmeat shops, imposing a 17% sales tax.

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  • FBR increases income tax to 15% on cellular services

    FBR increases income tax to 15% on cellular services

    ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday said the advance income tax on cellular services has been increased to 15 per cent from 10 per cent.

    The FBR issued Circular No. 12 of 2022 to explain amendments to Income Tax Ordinance, 2001 made through Finance (Supplementary) Act, 2022.

    The increase in advance tax rate on cellular service would generate additional 4.5 billion for the FBR.

    READ MORE: FBR issues new FED rates on motor vehicles

    The changes in the withholding tax regime on usage of internet and mobile phones services were introduced through the Finance (Supplementary) Bill, 2021, which was later approved by the national assembly.

    The FBR said that through the Finance Act, 2021 federal excise duty (FED) was levied on telecom services. However, telecom companies challenged the duty and got a favourable decision.

    “A marginal increase in adjustable advance tax has been proposed from 10 per cent to 15 per cent to make up for revenue loss from telecos,” the FBR added.

    READ MORE: Banks to share business account details to FBR

    The FBR collects the advance tax on telephone and internet users under Section 236 of Income Tax Ordinance, 2001.

    According to the ordinance:

    “Telephone and internet users.- (1) Advance tax at the rates specified in Division V Part IV of the First Schedule shall be collected on the amount of – (a) telephone bill of a subscriber; (b) prepaid cards for telephones; (c) sale of units through any electronic medium or whatever form ; and (d) internet bill of a subscriber; and (e) prepaid cards for internet.

    (2) The person preparing the telephone or internet bill shall charge advance tax under sub-section (1) in the manner telephone or internet charges are charged.

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    (3) The person issuing or selling prepaid cards for telephones or the internet shall collect advance tax under sub-section (1) from the purchasers at the time of issuance or sale of cards.

    (3A) The person issuing or selling units through any electronic medium or whatever form shall collect advance tax under sub-section (1) from the purchaser at the time of issuance of sale of units.

    (4) Advance tax under this section shall not be collected from the Government, a foreign diplomat, a diplomatic mission in Pakistan, or a person who produces a certificate from the Commissioner that his income during the tax year is exempt from tax.”

    READ MORE: FBR slashes sales tax rates on petrol, HSD

  • Banks to share business account details to FBR

    Banks to share business account details to FBR

    KARACHI: It has been made mandatory for banks to provide details of business accounts every month to the Federal Board of Revenue (FBR), official sources said on Wednesday.

    This is the additional information to be submitted by the banks along with details already mandatory for the financial institutions.

    READ MORE: Digital payments defined through Finance Supplementary Act 2022

    To make the requirement mandatory, Section 165A of the Income Tax Ordinance, 2001 has amended through Finance (Supplementary) Act, 2022.

    A new clause (f) has been inserted to the Section 165A under which the banks shall provide a list of persons containing particulars of their business accounts opened or re-designated during each preceding calendar month.

    READ MORE: Digital tax monitoring yields Rs32.43bn from sugar sector

    The Section 165A of the Income Tax Ordinance, 2001 deals with furnishing of information by banks:

    “(1) Notwithstanding anything contained in any law for the time being in force including but not limited to the Banking Companies Ordinance, 1962 (LVII of 1962), the Protection of Economic Reforms Act, 1992 (XII of 1992), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject every banking company shall make arrangements to provide to the Board in the prescribed form and manner,—

    READ MORE: Finance (Supplementary) Bill gets presidential approval

    (a) a list of persons containing particulars of cash withdrawals exceeding fifty thousand Rupees in a day and tax deductions thereon, aggregating to Rupees one million or more during each preceding calendar month;

    (b) a list containing particulars of deposits aggregating rupees ten million or more made during the preceding calendar month;

    (c) a list of payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to rupees two hundred thousand or more during the preceding calendar month;

    (d) a list of persons receiving profit on debt and tax deductions thereon during preceding financial year.

    (e) omitted

    (2) Each banking company shall also make arrangements to nominate a senior officer at the head office to coordinate with the Board for provision of any information and documents in addition to those listed in sub-section (1), as may be required by the Board.

    (3) The banking companies and their officers shall not be liable to any civil, criminal or disciplinary proceedings against them for furnishing information required under this Ordinance.

    READ MORE: Supplementary bill aimed at documenting economy: Tarin

    (4) Subject to section 216, all information received under this section shall be used only for tax purposes and kept confidential.

    Tax experts at PwC A. F. Ferguson & Co. said that the change is in-line with the requirement for declaration of the business bank account under the provisions of section 114A introduced through the Finance Act, 2021 and is a step towards documentation of the economy.

  • Digital payments defined through Finance Supplementary Act 2022

    Digital payments defined through Finance Supplementary Act 2022

    In an effort to provide clarity and streamline the taxation of digital payments, recent amendments have been made to the Income Tax Ordinance, 2001, through the Finance (Supplementary) Act, 2022.

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