Tag: Finance Supplementary (Second Amendment) Bill 2019

  • Withholding tax rates on imports updated through Finance Supplementary (Second Amendment) Act 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.

  • FBR outlines sales tax amendments through second supplementary finance act

    FBR outlines sales tax amendments through second supplementary finance act

    ISLAMABAD: Federal Board of Revenue (FBR) has summarized amendments to sales tax regime through Finance Supplementary (Second Amendment) Act, 2019 and directed the officials of Inland Revenue to take necessary action for implementation.

    The FBR said that to liquidate huge amount claimed by taxpayers in refunds which have been accumulated over a long time, the government has decided to pay the same through sales tax refund bonds, which shall have a maturity period of three years.

    Simple profit at 10 percent per annum is also proposed to be paid. The claimants shall also be able to raise the much needed cash by selling these notes in the security market.

    A new Section 67A has been inserted in the Sales Tax Act, 1990 to include enabling provisions for payment of refunds in this manner and also to provide for regulatory mechanism relating to issuance, transfer, redemption and other related matters.

    The FBR said that in the Sixth Schedule, the exemption of sales tax already available in relation to plant, machinery and equipment required for power generation from renewable sources of energy has been guaranteed up to June 30, 2023, to provide for certainty and confidence to investors. Same protection has been ensured on the import side of the similar equipment as covered under the Sixth Schedule.

    The FBR said that keeping in view the difficulties being faced by cancer patients and also on the orders of the Supreme Court, items related to ostomy procedures for treatment of cancer patients, which were not expressly and exhaustively mentioned in Sixth Schedule to Sales Tax Act, 1990, have now been so covered by substituting Serial Number 117 and relating it to heading 99.25 in the First Schedule to the Customs Act.

    The FBR said that presently sales tax exemption on plant and machinery is available only to specified sectors. Others sectors have to pay sales tax on import of plant and machinery.

    This sales tax is adjustable against future output tax but such adjustment takes place after a long time when the industry starts selling its product. This serves as an impediment to investment by increasing initial costs.

    In order to encourage green field investment and industrialization, exemption from payment of sales tax on imported plant and machinery to be used for setting up new industry for production of taxable goods has been provided by amending Sixth Schedule to the Sales Tax Act, 1990, as imported by the persons registered on or after 1st July, 2019 through Sr No 150 in Table 1 of Sixth Schedule to the Sales Tax Act, 1990.

    The FBR said that the new rates on the import of cellular mobile phones have been introduced by substitution in the Ninth Schedule to the Sales Tax Act, 1990.

  • FBR explains FED on motor vehicles under Second Amendment Act

    FBR explains FED on motor vehicles under Second Amendment Act

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday explained the amendment of Federal Excise Duty (FED) on imported and locally manufactured vehicles through Finance Supplementary (Second Amendment) Act, 2019.

    The FBR said that Serial Number of Table 1 of the First Schedule to the FED Act, 2005 had been amended and duty of the imported motor vehicles of 1800 cc to 3000cc had been enhanced to 25 percent ad valorem.

    Further, a new Serial Number 55A has been inserted whereby rate of federal excise duty has been enhanced to 30 percent ad valorem on import of motor cars, SUVs and other motor vehicles of cylinder capacity of 3000cc of above (other than those vehicles as designed for the transport of 10 or more persons.

    The FBR said that federal excise duty on locally manufactured cars SUVs etc. of engine capacity exceeding 1700CC and above at 10 percent ad valorem had also been introduced.

  • Income Tax Ordinance 2001: amended advance tax rates on marriages, functions

    Income Tax Ordinance 2001: amended advance tax rates on marriages, functions

    KARACHI: Federal Board of Revenue (FBR) has updated advance tax rates on marriages and functions through latest amendment to Income Tax Ordinance, 2001.
    The national assembly recently approved Finance Supplementary (Second Amendment) Act, 2019 and advance tax rate for functions and gathering has been updated.
    The advance tax is collected under following section of the Ordinance.
    Section 236D: Advance tax on functions and gatherings
    Sub-Section (1): Every prescribed person shall collect advance tax at the rate specified in Division XI of Part IV of the First Schedule on the total amount of the bill from a person arranging or holding a function in a marriage hall, marquee, hotel, restaurant, commercial lawn, club, a community place or any other place used for such purpose.
    Sub-Section (2): Where the food, service or any other facility is provided by any other person, the prescribed person shall also collect advance tax on the payment for such food, service or facility at the rate specified in Division XI of Part IV of the First Schedule from the person arranging or holding the function.
    Sub-Section (3): The advance tax collected under sub-section (1) and sub-section (2) shall be adjustable.
    Sub-Section (4): In this section,—
    (a) “function” includes any wedding related event, a seminar, a workshop, a session, an exhibition, a concert, a show, a party or any other gathering held for such purpose; and
    (b) “prescribed person” includes the owner, a lease-holder, an operator or a manager of a marriage hall, marquee, hotel, restaurant, commercial lawn, club, a community place or any other place used for such purpose.
    The rate of tax to be collected under each sub-sections (1) and (2) of section 236D shall be 5%;
    Provided that the rate for the function of marriage in a marriage hall, marquee, hotel, restaurant, commercial lawn, club, a community place or any other place used for such purpose shall be as set out in the Table below:─

    S. No.Rate of tax 
    015% of the bill ad valorem or Rs20,000 per function, whichever is higherFor Islamabad, Lahore, Multan,Faisalabad, Rawalpindi, Gujranwala, Bahawalpur, Sargodha, Sahiwal, Shekhurpura, 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 and Turbat.
     
    025% of the bill ad valorem or Rs10,000 per function, whichever is higherFor cities other than those mentioned above.

    Through Finance Supplementary (Second Amendment) Act, 2019, the following amendment has been inserted:
    “Provided further that the rate for the function of marriage in a marriage hall, marquee or a community place with the total function area less than 500 square yards or, in case of a multi-stories premises, with the largest total function area on one floor less than 500 square yards, shall be 5 percent of the bill ad valorem or Rs5,000 function whichever is higher.”
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  • Non-filers allowed locally assembled motor vehicle of any engine capacity

    Non-filers allowed locally assembled motor vehicle of any engine capacity

    ISLAMABAD: The federal government has allowed non-filers of income tax returns to purchase of locally assembled motor vehicles of any engine capacity.

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  • Bill focuses very low on revenue collection: former FBR Member

    Bill focuses very low on revenue collection: former FBR Member

    KARACHI: The Finance Supplementary (Second Amendment) Bill, 2019, presented by the PTI government, is perceived to have a nominal impact on revenue collection, with a predominant focus on stimulating industrial growth.

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  • Income tax returns, sales tax procedure to be simplified: Asad Umar

    Income tax returns, sales tax procedure to be simplified: Asad Umar

    KARACHI: Finance Minister Asad Umar has expressed his resolve to simplify income tax return forms and sales tax procedure to facilitate business community.

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  • Finance Supplementary (Second Amendment) Bill 2019: Key points of income tax proposals

    Finance Supplementary (Second Amendment) Bill 2019: Key points of income tax proposals

    KARACHI: A chartered accountant firm has highlighted proposed amendments to Income Tax Ordinance, 2001 through Finance Supplementary (Second Amendment) Bill, 2019.

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  • Reform package exempts withholding tax for rupee accounts receiving foreign remittances

    Reform package exempts withholding tax for rupee accounts receiving foreign remittances

    KARACHI: The new reform package has allowed exemption from collection of withholding tax on cash withdrawals from a bank account maintained in local currency where deposits are made through foreign remittances.

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  • Bill proposes valuation in US Dollar for imported mobile phones to collect smart phone levy

    Bill proposes valuation in US Dollar for imported mobile phones to collect smart phone levy

    KARACHI – The Finance Supplementary (Second Amendment), 2019 has introduced a proposed overhaul in the valuation and levy structure for imported mobile phones, shifting from Pakistani Rupees to US Dollars.

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